Comprehensive Study on Expanding the Business Internationally

INTERNATIONAL BUSINESS

COMPREHENSIVE STUDY ON EXPANDING THE BUSINESS INTERNATIONALLY

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Introduction

International business development is a subject which deals with developing the strategies and activities that company should undertake to take the business in the international business. There is various benefit of taking the market on a global platform in this competitive world. International business refers to exchange of goods, services and investment across the national boundaries (Klarin et al.,2021). Which includes import and export of goods and services. For any economy the business flourishing on global stages is bringing profits fostering economic growth of the country.

International business and its expansion are important for various reason which includes it provides the opportunity for the businesses to expand in different market and interact with different customer segments. It also provides a competitive advantage to the company, most importantly the new market new employee and new places offer the opportunity of innovation and creativity. For any business to have a long-term presence should expand international to be the part of interconnected global economy (Ghauri et al.,2021). International business development involves strategic planning implementation of activities which all aims at expanding the organisation operation. There are various components that incudes market analysis, cultural adaption, risk management.

The project aims at exploring the different dynamics of international business development, examining key strategies, challenges and opportunity that the organisation may faces while entering into the dynamic market.

Introduction of ASOS

ASOS is a British fashion and cosmetic online store which was established in 2000 by Nick Robertson and Quentin Griffiths. The company in this case focuses on the sale of fashionable and cheap clothing products for the youths in the global market. This abbreviation stands for “As Seen on Screen,” since the company started as an apparel and accessories brand inspired by the outfits in films and by celebrities. Many years later, it evolved into a catalogue company that sells more than 85000 products for women and men, apparel and shoes, accessories and beauty products from different brands and its exclusive brands.

Launched in 2000 and currently based in London, the company focuses solely on the online business and has its outlets in over 200 countries with the localized websites for different markets differentiating between the UK, US and Australia. It has evolved into fast fashion, where companies can provide customers with new and cheap trends within a short period. ASOS also targets diverse and multiple audiences from around the globe, with equality and environment being among its priorities. Currently, the company has implemented various sustainability campaigns, one of the events is known as the ASOS Responsible Edit, a collection of products that have been produced using sustainable methods.

Figure: Logo of ASOS

Source: (Skeldon, 2017)

ASOS has a unique selling preposition (USP) of serving wide variety of product to its customers not just in clothes but also in accessories and beauty products. It is trying to cater the customers of all the age group and with different economic background as it offers the product which is affordable but also trendy at the same time (ASOS, 2024). It builds the customer centric policies which including minding the needs of customer such as sustainability, inclusivity.

ASOS earns its revenues in the fashion retailing business, in addition to its premium membership known as ASOS Premier that delivers items within the coming day. Technological aspects like virtual try-ons and the use of mobile applications during the purchasing process adds value to the company’s services. However, its major threats and concerns involve the ability to sustain rapid growth and its manoeuvres to cope with a complex global environment. However, these difficulties were not able to bring ASOS down as it remains one of the most popular fast-growing online fashion retailers. (Parker and Alexander, 2022).

International presence of ASOS

Reasons for international expansion for ASOS, UK

ASOS has huge potential it is already ruling on the hearts of the UK customers the international expansion of such business can lead to their long erm success and sustainable market competition in the future (Ghauri et al.,2021). Let us understands various parameter for the fashion outlet to have internation presence.

• Market diversification: the expansion provides new opportunity to explore the new market when it is about going international it provides opportunity for exploring the goods and spread the market risk which would mitigate the risk of recession or any other market downfall.

• Higher revenue potential: ASOS is an example of a successful revenue model it is experienced and can use similar strategies to open stores or show online presence in other countries like India, Russia or China. It will not only provide a new customer base but will also ensure higher growth rates.

• Competitive advantages: there is huge competition specially for the fashion industry having good market within UK are all planning to diversify in other countries within and outside the continent because in the competitive world it has become a task to cover the costs of the company.

• Brand reputation: the brands which are working in more than one country all together have a good reputation compared to other domestic brands and the customer who are brand conscious will also prefer the fashion company (Singh et al., 2024).

• Adaption to the global trend: in the global market there are numerous changes every now and then but one the company would adapt this market behaviour it would always lead in the market.

• Leverage the trade agreement: there are various international agreement with in different countries that are able to benefit their business through that partnership so the business residing into any of the country which are not partnered they can get their international presence in those countries for better relation with the international market and its stakeholder. For example, is not an apart of BRICS so the fashion company can establish their business in any of this country it will give it the advantages of strategic partnership.

BRICS

Alike other fashion company ASOS should also expand to the international markets specially to the BRICS countries as there is a very competitive market and a huge customer base. The international organisation called BRICS comprises of Brazil, Russia, India and south Africa it accounts to worlds 40% of Population and 25% of the global GDP (BRICS, 2024). The main motive of the group is to have economic cooperation, it provides investment opportunity to the partnered country. These countries are the ones which have either recently got the status of a developed country or is developing at a good pace the economic condition is also feasible for the fashion businesses in these countries it can also benefit the trade in 2 different geographies for example India and China do not have good internal relation but the partnership awards the opportunity to trade within these countries as well. There is a growing middle class with increasing purchasing power. The countries are also having flourishing resources specially countries like Russia and Brazil which will at as raw material for established businesses to expand even further. Countries like India and China has huge labour force that is available in the low cost that can directly impact the operational cost. BRICS has strategic partnership which is an added advantage for any organisation as they can have well established channel or market, the partnership can also lead to exchange of new technologies and new ideas, for example BRICS has its own bank called National Development bank established in 2014 to fund the infrastructure, sustainable development projects for the member countries BRICS has one more advantage that is it ha diverse cultural having unique attributes. It can enrich the organisations product offering (New Development Bank, 2024).

Expanding in one of the BRICS countries can reduce the risk of mitigation as multiple market within country on a single economy reduce the risk of economic downfall. BRICS nations are experiencing rapid economic growth specially country like India and China which is having hug middle class population and with higher disposable income to spend on fashion and expenditure. These countries have young demographics eager for trend ad affordable fashion.

Recommended country: INDIA

For ASOS, the BRICS can provide significant growth opportunity, the careful market research and understanding of the customer fashion can lead to success for the company. It should begin with the country like INDIA, India has a vibrant and a diverse fashion market. The fashion goods include the mix of contemporary and traditional fashion. There I am huge growth potential for Indian fashion market with the customer interested big international brands. The key segment of clothing in India includes ethnic wear, western wear and athleisure. there are several other reasons of choosing India for a fashion company expansion

• Huge market demand: As per various assumption India is now the most populous country leaving behind India on the other hand it has also became a 5^th largest economy overtaking UK as per WEF (Armstrong, 2022). the facts shows that the country has a growing market and it demand is also increasing. The country comprises of middle-class population which are trying to improve their own lifestyle the factors are the positive signs for derived demand. The online fashion company can contribute to the huge share of their clothing and cosmetic options.

• Diverse consumer presence: the country has a very unique and diverse culture allows for diversity of the taste and preference in the country like India the rich cultural difference can benefit the outside companies as there will be some or the other customer linking their product, this can also ensure the sustainability for the new comer.

• Potential for new product: considering the UK customer base there is wide variety of fashion products that ASOS is selling which can be brought to India as the country is also a home for so many fashionable goods, so such goods can help in capturing the market.

• Supportive government policies: there government policies of India for the UK based companies are positive. Indian government encourages investment in fashion and cosmetic goods.

• Strategic partnership: as the Indian market is still expand there are many retailers and shops wiling to collaborate with the international brands so that they can outsource their clothes from outside.

• Untapped market: the Indian market is less explored by the big fashion industry of all over the world capturing such growing and untapped market can lead to huge success for the company.

• Availability of resources: there are wide range of craftsmen, artisan who are having good skill and knowledge of making the fashionable goods but they are not getting the right opportunity to showcase their talent.

Some of India’s prominent e-tailers are Myntra, Flipkart Fashion, and Ajio who are quite comparable to ASOS having many similar products in their online stores at similar affordable price points. Myntra, a Flipkart entity, boasts of its largest portfolio of Indian and international brands, while Ajio in the Reliance Industries stable specialises in ethnic and fusion wear (Tandon, 2021). Apart from the challenge of large competition then recent trend also shows that the cutworms are choosing sustainable products which are ecofriendly over the fashionable goods. With the growth in the online shopping the sellers are integrating the AI and other technologies such as augmented reality to enhance the shopping experience of the buyers. However, ASOS is way ahead of these competitors in terms of operations, vast product range, and exclusive fashion trends. Also, the company emphasizes sustainability, size options, and delivery services, making ASOS more competitive than Indian fashion merchants in global markets. The Indian fashion market present is a great opportunity for the retailers wiling to expand and adapt the changing needs of the customer, Asos has a very strong online presence leveraging the investment in this BRICS country can lead to its success in international expansion.

Typical barrier in expansion

There is various barrier also in opening the outlet in the country like India. There are various barriers which are listed below:

• Regulatory compliance: the country has various safety regulations there are various complex laws and need to get a license in some condition. The products which are to be imported or exported from far off places like UK may need to pay the trade duties, there will also be some sort of restriction different products if they do not meet the standards of the country (Texmin.nic.in, 2024)

• Supply chain challenge: The presence of the company in Indian market can be a challenge, as ASOS will need to establish itself online or have to open a store for making it known in the Indian market. Additionally, the diverse geography of the country can also cause the problems such as the infrastructure barrier or timing issues.

• Operation cost: though ASOS has good revenue model but new place would require huge investment specially in the cities like Bangalore, Delhi which already has presence of competitor.

• Cultural difference: the country has wide culture and it acts like both an advantage and disadvantages the country has so many others online websites alternative or brands alternative which supply best of materials and fabrics. The business would need time to adequately adapt the preferences of the customers.

• Pricing target: the barriers such as supply chain, competition and other factors contributes to a higher cost at least in the initial phase of setting up the company store in India. It can create the problem of costing specially because of the brands or stores having known name for fitting into middle class pockets in India.

• Brand awareness: India has a growing market but still have has various international brands ruling the fashion market so it will be another task to establish the brand name in a new country far off from United Kingdom. Brand awareness is larger process which also includes the marketing of the goods and informing the consumer segment about the product it can be done through consistent branding of the product even before the full fletched brand launch in the country as the bringing is a slower process compared to other barriers (Ryan et al., 2022)

• Higher competition: there is a huge competition in Indian market has a huge demand for clothes serving varieties ad also causing the problem as there are not just domestic retailers but many internation brands such as Zara, Gucci are already having their market segment in India. The calculated risk and a cautious decision relevant for Indian fashion market competitor can help the brand to stand out

Relevant implementation approach for international expansion

The international expansion of a UK fashion industry needs to have proper market research which is necessary before hand to open the outlet, the market research includes studying the preference, taste, product launch details and the competitive liking of the country. Market research should be the prerequisite for any business trying to expand. For the initial phase taking the help of local partnership can avoid the market dynamics to some extent and can help sourcing various legal and material resources. The marketing strategy so prepared by the ASOS company should also resonate with the Indian landscape, it includes inculcating their cultural practices, using the social media platforms wisely so that customer can adopt the new name in the midst of the competition (Katsikeas et al.,2020). To gauge the market ASOS can take the help of local people who can use the product as a sample so that it can provide the right value which has always been the USP for the brands it is also known as pilot tasting. For a clothing brand one needs to take care of the efficient warehousing so that there should be regional distribution centre to reduce the shipping time and cost of the product. Inventory management is also important for local demand forecasting.

Another important part which is related to management is the training and development of the of the staff which is going to handle the Indian market they should be able to provide the quality experience to all customer. There should be multilingual support to offer the customer service. Effective communication can enhance the customer experience. Proper training and fashion antiquate should be the part of their strategy for easy adaption. The rightful management will also ensure the easy brand localisation which is one of the priorities for an established fashion company.

Methods and strategies for expansion in international business

There are various strategies which can be implement by any brand try to expand on international level. ASOS can also use one of the or a combination some to cater the customers of India (Welch et al.,2020). Let us discuss some relevant and successful models

• Franchising model: the franchising model works on the basis of creating the local partners who understands the market and have the full knowledge of the market but are not selling the goods ASOS is trying to offer, such partnership can lead to lesser capital investment and a lesser risk, it would also give the opportunity to the local brand to experiment with the customer to set the right full of the product

• Joint venture model: the model works in a manner of collaborating with an established fashion company and sharing the market for the initial phase for instance with Reliance. There could be shared risk, resources and higher understanding of the customer for a long-term benefit.

• Ecommerce and delivery platform model: the benefit of growth of these platforms offers a new market opportunity for the brands which doesn’t want to do high capital investment. The fast fashion website company can establish its store in India in an established metro city and sale products online transporting from a location to others.

• Direct investment model: the model which allows ASOS to open the store in prime location with direct management of the operations (Alazzam et al.,2023)

• Hybrid model: the model deals with having the direct investment in some cities and having online or franchising system in the smaller cities. The hybrid model also include operation in both online and offline mode wherein the offline store would cater the target customers nd there will be inventories at various smaller place t avail he goods online for the customer in rest of the part of the cities.

• Strategic partnership: collaborating the local brands or local designers to know the market trend or establishing the relationship with the local manufacturers to streamline operation in the appropriate supply chain.

APPROPRAITE METHOD FOR ASOS, UK

ASOS has its established market in UK and targeting the BRICS country for international expansion. Considering the market condition of India ASOS should use more than one model to have calculated risk, resource planning and to maintain the brand name it aimed to establish since many decades now. It can utilise the franchise mode for capturing the market, this model will reduce the time cost required to research the new market, this model will also help to meet the regulatory compliance which are required to enter into the new country it should also utilises the ecommerce business model as the tret audience include higher middle to class to rich class of the society so having an online presence with the benefits of the payment system, delivery system and online ordering system can help ASOS. It will also ensure the transparency and a direct offering opportunity to the fast fashion company where they will be able to connect with the customer directly (Kumar et al., 2024). The combination of the two can be considered as an appropriate model or the initial phase of establishing the business in India. After choosing the right method it is important to implant it in a linear format and for long term sustainability, adaptive strategies should be applied for the growth. the performance can be measured using Key performance index analytics an continues feedback for analysis.

International process for setting up the business for target market

In UK ASOS has specific target market that incudes people of all age groups. Mainly it has the family-oriented customer base. The students who are less than 18 years of age are also considered as the huge part of the market. Other than these stakeholders, ASOS has direct contacts with the local suppliers, influencers and celebrities to cater the new people every time the visit UK. The goodwill which is captured by ASOS is huge and there is equal need of maintaining this in Indian market, it is taken place with using right social media for broadcasting information, the promotional activities at times like festivals or new year also bring new customers for the company. ASOS is also known for its quality of materials and other products it tends to provide an unforgettable in store or online experience which creates loyal customer for it.

For establishing its business in India for its target market it should follow a well structure process for the sake a long-term sustainability in the market. It starts from analysing the different places and customer preference it can be said as the market research. It can also perform the SWOT analysis for analysing the competition. The business models so chosen should engage before the entry of the brand into the market (Paul et al.,2020). For a long-term success, the company should go through all the regulatory compliance require to be provided for entering the market. Once the brands enter into the met successfully there is a further need to develop the local value and set the prices for the products which ensure revenue for the company and should also be acceptable to the customer. The company also work on regular feedback and adaption for regular refining of the product.

The target market of the company often includes the children and youths and the families. From any event to any kind of celebration one needs fashion accessories and in the country like India celebrations are part of every household. ASOS can serve the accurate clothing and cosmetics products to capture the market as the market is easily capturable because it has a wide range of targeted market.

Conclusion

In conclusion setting up an online or in-store presence of ASOS in one of the BRICS countries is a very strategic step that is offering the opportunity of growth of the business because of international development of any business is aligned with the growing demands. ASOS is having the potential to sell its premium product and carry forward the legacy of England to rest of the world. This opportunity can be proved highly advantageous for leading ahead of the competition (Shooshtari et al.,2021). With a focus on quality innovation and customer experience, the fast fashion business has the potential to thrive and expand further in this dynamic and diverse market, ultimately contributing to its global brand growth.

Choosing the country like India to create a new market is also a new experience as generally middle east countries are famous for fashion product consumption other that Europe but trying and setting up the market in one of the fastest growing economies that is in India can be very fruitful to aid competition in the short term and to sustain in a long term. There is a need to establish a well-considered strategy to entering into the market. As it will allow optimal market penetration and additionally fostering local partnerships and ensuring compliance with regulatory standards will be crucial for a smooth operational setup. The culture aspect of the country can help in reaching the target audience.

International business development model is the key component for any business to consider for international expansion. ASOS can apply these strategies for a reliable growth in the market as expansion is very important for any business to survive into this competitive world. With the right sense of globalisation and by leveraging the new technology one can enter not the global market for the long-term profits. Many successful fashion companies such as Myntra, Ajio, are setting new targets for providing great accessories and clothing goods. ASOS can also lead in this industry as it is having strong command in developing a style, being consistent and by offering the class in product and hospitality the right market. Market research and accurate international business model and strategies can ensure a long-term success with a strategic advantage to the country for its own future.

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