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Lauren Paull Q10907998

RESEARCH PROPOSAL - AE 1

Lauren Paull
2/8/2016

2/8/2016

Contents
Introduction .................................................................................................................................................... 2
Selection of international market- New York, USA ........................................................................................ 2
Core Benefit to Select Market .................................................................................................................... 2
National Culture Dimensions ...................................................................................................................... 2
Power Distance Index ............................................................................................................................. 2
Individualism Vs Collectivism.................................................................................................................. 2
Masculinity Vs Femininity ....................................................................................................................... 2
Uncertainty Avoidance Index ................................................................................................................. 3
PESTEL......................................................................................................................................................... 3
Selection of organization- new look group..................................................................................................... 4
Background of New Look ............................................................................................................................ 4
Industry and Product Type ......................................................................................................................... 4
Organizational Culture ................................................................................................................................ 4
Customer Type ........................................................................................................................................... 5
Prospective Competitors ............................................................................................................................ 5
SWOT .......................................................................................................................................................... 5
Selection of a key international marketing approach .................................................................................... 6
Identification of the approach .................................................................................................................... 6
Ansoffs Matrix ....................................................................................................................................... 6
Porters Value Chain ............................................................................................................................... 6
Why is it critical for success? ...................................................................................................................... 7
Conclusion ...................................................................................................................................................... 7
Appendix......................................................................................................................................................... 8
References ...................................................................................................................................................... 9

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INTRODUCTION
This report is a proposal which will justify why New Look should expand its business into the USA, in
particular New York. The report will identify factors which imply that New Look launching in New York
would be successful, and will outline why further research should be conducted in order to complete a full
report.

SELECTION OF INTERNATIONAL MARKET- NEW YORK, USA


Core Benefit to Select Market
Vogue (2014), state that New York was voted the most fashionable city in the world (www.vogue.co.uk).
At the forefront of fashion, innovation and glamour, New York is currently where everything is happening
first. The city is not short of world class media exposure with magazines such as Vogue, GQ and Womens
Wear Daily, who are critical for success (www.nycedc.com). New Look are already one of the UKs leading
fashion brands, who introduce hundreds of new products each week (www.newlookgroup.com).
Therefore with the correct strategic planning, New Look could launch into the fashion capital to increase
brand exposure and their sales and revenue.

National Culture Dimensions


In terms of culture dimensions the UK and United States score similarly, this can be seen in Appendix,
Figure 1. This would be a benefit for New Look because they would not have to make any drastic changes
to the company as British and American consumers are very alike.

Power Distance Index


Power distance index is the extent to which members of a particular culture accept and expect that power
is unequally distributed in society (Browaeys and Price, 2015). The USA has a fairly low score of 40 in this
dimension meaning that Americans believe that they have equality (geert-hofstede.com).

Individualism Vs Collectivism
Browaeys and Price (2015), describes this dimension as dealing with the relationship between the
individual and a group. It studies the extent to which members of society want to be part of a group. The
USA scores 91 in this dimension which makes them one of the most individualist countries in the world. In
an individualist society people tend to look after themselves and direct family. Combining the USAs low
power distance index score and high individualism score suggests the following:

Americans believe in liberty and justice for all, which is evidenced by the emphasis on equal
rights in all aspects of American society and Government.
Within American organizations, hierarchy is established for convenience.
Both managers and employees expect to be consulted and information shared freely.
Americans are accustomed to doing business with strangers and consequently are not shy about
approaching others for information (geert-hofstede.com).

Masculinity Vs Femininity
Hofstede developed the masculinity Vs femininity dimension so that societies can be characterized as
being both assertive and competitive or more caring (Browaeys and Price, 2015). In this dimension the

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USA has a score of 62, making them a masculine society. This can be seen in their typical behavioral
patterns such as:

In school and work Americans share the same values that people should strive to be the best
they can be and that winners take all. As a result of this Americans tend to display and talk
freely about their successes.
Setting targets in order to log achievements (geert-hofstede.com).
Living to work so that they can obtain momentary awards and consequently attain a higher
status.

Uncertainty Avoidance Index


Uncertainty avoidance index measures the extent to which societies avoid uncertainty (Browaeys and
Price, 2015).Uncertainty is known to bring anxiety, and different cultures learn to deal with it in different
ways (geert-hofstede.com). In this dimension the USA have a below average score of 46. Consequently,
the perceived contexts in which Americans find themselves will determine their uncertainty avoidance
index, more than if the culture had scored higher or lower. Therefore, the cultural pattern reflected is as
follows:

There is a fair degree of acceptance of new ideas, innovation and trying new things, whether to
do with technology, business practice or food. Americans tend to be tolerant of others ideas and
opinions and encourage freedom of speech.
At the same time, the 9/11 terrorist attack put a lot of fear into American society (which could be
why the USA scores higher than the UK), where the government monitors everybody through the
NSA and other security organizations (geert-hofstede.com).

PESTEL
PESTEL can be used in order to assess the Macro Environment. Masterson and Pickton (2010), define the
macro environment as the broad, external influences that affect an organization. A PESTEL analysis has
been used to define political, environmental, social, technological and economic factors that will affect
New Look launching its first store in America.

Figure 2- PESTEL Analysis


Political

Environmental

Social

Technological

Currently the total sales and Tax rate in New York City is 8.875%. There is no sales tax
on an item of clothing or footwear that costs less than $110 (www1.nyc.gov). Sales and
Tax rates are subsequent to change, so New Look would have to keep abiding by them.
Currently New York has large waste disposal problem, where the government are
trying to find economically viable and sustainable ways to dispose of an estimated
50,000 tons of residential and commercial waste everyday (www.theguardian.com).
New Look would have to consider that the NYC government (2016), state that
commercial businesses have to arrange private waste collectors and pay a fee for this
(www1.nyc.gov). A way that New Look can be economically efficient would be to use
paper bags instead of plastic bags, as well as recycle all waste efficiently.
Recently, The New York City population reached a record-breaking 8.3 million
residents, therefore increasing the demand for retailers (www.nycedc.com). New Look
is a fashionable yet affordable business, so there would be room for the business to
expand to New York.
With advanced technology emerging every day, retailers are having to become more

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Economic

Legal

innovative. For, example in New York, the store Levis will have touchscreen devises in
the fitting rooms where customers can ask for different sizes or styles by pressing a
button and alerting a sales assistant. CBS New York, predict that by the end of 2016 this
technology will be in most stores (newyork.cbslocal.com). New Look would have to
consider installing new technologies whilst building the store in order to keep
innovating and improving the customer experience.
Since the Great Recession, The New York City retail market has had a strong recovery
(www.nycedc.com). Industry Trends and Insights (2013), suggest (according to figures)
that with the current retail sales, employment, number of rising establishments, and
millions of un-used square feet of retail estate, there is a strong foundation for lasting
growth in the retail sector. New Look could use this to their advantage to increase sales
and revenue.
The legal laws for retail establishments in New York are similar of that in the UK. For
example one legislation is that a business must provide truth in advertising and cannot
mislead customers (www.hg.org). New Look already does this in the UK, therefore they
would just have to carry on doing so in New York.

SELECTION OF ORGANIZATION- NEW LOOK GROUP


Background of New Look
New Look was founded in 1969 as a single fashion store in the UK, the first store to open was in Taunton.
Since then, New Look has grown into a leading fast-fashion brand, with 569 stores in the UK with 3.5
million customers subscribing to their email alerts. In 1988, New Look opened their first international
store in France, leading to over 200 stores opening across Europe, China and Asia. In 2007 New Look
began selling their products online, the transactional website now ships to 120 countries worldwide which
generates 14% of their revenues. New Look has a significant social media presence with over 3 million
Facebook fans, 269,000 Twitter followers and 741,000 Instagram followers (www.newlookgroup.com).

Industry and Product Type


New Look is part of the clothing retailing industry. Mintel (2015), suggests that the clothing industry is a
highly resilient category, however it is also stated that it is a very mature sector that is becoming
increasingly over crowded. Recent studies show that consumer expectations surrounding shopping
experiences are rising, this means that clothing brands such as New Look need to focus on main issues
that concern customers when buying items of clothing; such as fit and availability in their size. In order to
be a successful retailer in this industry it is crucial to keep expanding and innovating
(academic.mintel.com).
In terms of product New Look offers a broad range of womens fashion (including maternity and petite),
an expanding mens range, a teen fashion range and footwear and fashion accessories. New Look claim to
keep their products diverse by introducing hundreds of new products every week, both in store and
online. In January 2015, New Look also launched a womans active wear range in 150 of their stores. Also,
New Look is introducing fragrances and cosmetics to most of its UK stores and some European stores
(academic.mintel.com).

Organizational Culture
Masterson and Pickton (2010), loosely describes organizational culture as the way a company does
things. The culture of a company is often set by the chief executive(s) or founder(s). Their lead tends to

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influence the behavior of other members of the organization. New Look describes themselves as being
customer orientated, stating that customers are at the heart of everything we do. New Looks vision is to
become the chosen brand for an inspiring accessible fashion experience (www.newlookgroup.com).

Customer Type
New Looks general target market are females aged 16-45. However, recently one of the key priorities of
the brand is to increase menswear sales (academic.mintel.com).

Prospective Competitors
New look will have a number of key prospective competitors when they launch into New York. New Look
will find stores they are already competing with in the UK such as Topshop, Mango and H&M.

Figure 3- Prospective Competitors


Topshop

H&M

Mango

Topshop launched its first store in the New York in 2009 and since then has been
a great success. Topshops CEO Phillip Green said that a number of British
retailers have attempted to conquer America and failed, therefore he learnt from
their mistakes (news.bbc.co.uk). Topshop was described as being young, fun and
edgy compared to other stores in the US (www.theguardian.com). New Look has
similar clothes to Topshop and is also a British brand so should take tips from
their launch. However, these two stores would be tight competition.
H&M was founded in Sweden in 1947, and in 1976 they opened their first
international store into the UK. Since then, H&M has continued to launch stores
internationally and opened their first US store in 2000 (about.hm.com). As H&M
are already competitors to New Look in the UK, they will most certainly be
prospective competitors in the US.
Mango are a worldwide company with 2,415 stores in 107 countries
(shop.mango.com). They currently have three stores in New York
(www.retale.com). For their Spring 2016 campaign, Mango have used the famous
model/socialite Kendall Jenner who has millions of followers on social media
(www.popsugar.com). Mango will be tough competitor as they have an
impressionable celebrity in their campaign who will entice customers.

SWOT
The SWOT analysis is a general management tool used for basic market planning, in order to assess the
micro environment (Masterson and Pickton, 2010). Figure 4 addresses New Looks strengths, weaknesses,
opportunities and Threats, which have been adopted from the PESTEL and organization information. This
will help justify a launch into New York.

Figure 4- SWOT Analysis of New Look launching into New York


Strengths

Weaknesses

Threats

One of the leading fashion brands in the UK


Huge digital footprint (over 3 million Facebook fans, 269,000 Twitter
followers and 741,000 Instagram followers)
Stores across the UK, Europe and Asia (www.newlookgroup.com).
New Look and Topshop sell quite similar fashions, therefore New Look
would have to find a way to differentiate.
New Look is not well known in the USA (A launch into New York would
have to involve a large and costly marketing campaign).
New York is described as one of the most cut throat fashion markets

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Opportunities

where British retailers such as Marks and Spencer have failed


(news.bbc.co.uk)
High Street stores who are already competition in the UK, such as
Topshop, H&M and Mango are also competitors in the New York.
Topshop use the fashion icon Kate Moss to promote their brand to
Americans (www.theguardian.com).
As identified in the PESTEL Industry Trends and Insights (2013), suggests
(according to figures) that there is a strong foundation for lasting growth
in the retail sector, which will make a New York launch a long term
investment.
If placed the right location (for example, SoHo, Manhattan), there will be
a large footfall past the store.
Brand Awareness.
A larger customer base.

SELECTION OF A KEY INTERNATIONAL MARKETING APPROACH


Identification of the approach
Ansoffs Matrix
In terms of approach New Look should use Ansoffs Matrix Model as seen in Appendix, Figure 5. This tool
helps to determine strategic direction by compromising four possible growth strategies (Masterson and
Pickton 2010). In this instance New Look would have to use quadrant 3 of the tool because they will be
launching their existing product into New York. Using Quadrant 3 will involve slightly adapting the product
and marketing activities to make the brand suitable for consumers in New York. Although, The Guardian
(2015), found that American girls like the edgy British fashion so the products will not have to be
changed drastically.

Porters Value Chain


The Economic Times (2016), describes Porters value chain as the whole series of activities used by a
company in order to build value for the business (economictimes.indiatimes.com). An example of the
Porters Value Chain Model can be found in Appendix, Figure 6. Each section of the model is crucial for
success, operations and sales and marketing are discussed in Figure 7.

Figure 7- Porters Value Chain


Operations

Sales and Marketing

New Look currently ship products from 860 factories in 28 different countries
(www.newlookgroup.com), so to start with New Look should ship their goods to
America. However, if the launch in America is successful, New Look should
consider making a Foreign Direct Investment. If there was a depot in America,
New Look could efficiently transport goods to the store.
As discussed in prospective competitors, New Look should acknowledge the
impact of celebrity endorsements. If New Look were able to do this, they would
gain worldwide exposure. A successful marketing campaign would be crucial to
attract consumers in the New York retail market.

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Why is it critical for success?


Using strategic approaches such as Hofstede, Ansoffs Matrix and Porters Value Chain are critical for
success when launching internationally. Ansoffs Matrix defines what growth strategy a company will use
to increase sales and opportunities, in this case quadrant 3 is the most effective. Using Ansoffs Matrix in
conjunction with Hofstede enables a business to understand a segmented consumer market such as New
York. By combining both geographic and demographic variables, it gives New Look a deeper
understanding of what their prospective consumers want in terms of services and products. Lastly,
Porters Value Chain builds value for a business, so if New Look carefully plan operations, services,
inbound logistics, outbound logistics and sales and marketing to suit the New York market, they will be
making the business efficient as possible.

CONCLUSION
New Look is a young, fashionable and affordable brand and through social media are able to post stylized
images, therefore successfully promoting desirable fashion trends that customers want to buy
(internetretailing.net). New Look has already become an international success by launching stores in
places such as Europe, China and the Middle East. With British competitor Topshop already having a
successful launch in America, it seems this should be the next step for New Look. A recommendation for
New Look would be to hire a celebrity endorsement for their launch, as it is working well for stores such
as Topshop and Mango.

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APPENDIX
Figure 1- United States and UK Cultural Dimensions Comparison

Figure 5- Ansoffs Matrix

Figure 6- Porters Value Chain

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REFERENCES
BBC NEWS. 2009. Topshop takes American Plunge [Viewed 15th February 2016] Available from:
http://news.bbc.co.uk/1/hi/business/7978055.stm
BROWAEYS, M, J., R PRICE, 2015. Understanding Cross-Cultural Management. 3rd ed. London: Pearson
Education Ltd
BUSINESS FREE, 2015. Porters value chain [Viewed 12th February 2016] [Image].Available from:
http://www.businesssetfree.com/porters-value-chain/
CBS NEW YORK, 2016. Retailers using robots to improve in-store shopping experience [Viewed 15th
February 2016] Available from: http://newyork.cbslocal.com/2016/01/27/retail-shopping-technology/
ELLA ALEXANDER, 2014. New York is The Worlds Top Fashion Capital [Viewed 25th February 25, 2016]
Available from: http://www.vogue.co.uk/news/2014/02/05-/new-york-is-crowned-fashion-global-capital
H&M, 2016. History [Viewed 21st February, 2016] Available from: http://about.hm.com/en/About/factsabout-hm/people-and-history/history.html#cm-menu
HG LEGAL RESOURCES, 2016. Retail Law [Viewed 15th February 2016] Available from:
http://www.hg.org/retail-law.html
INTERNET RETAILING, 2014. Retail Review: New Look [Viewed 25th February 2016] Available from:
http://internetretailing.net/issue/internetretailing-magazine-november-2014-volume-9-issue-1/retailreview-new-look/
ITIM INTERNATIONAL, 2016. The Hofstede Centre [Viewed 15th February 2016] Available from:
http://geert-hofstede.com/united-states.html
MANGO, 2016. The Company [Viewed 21st February 2016] Available from:
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MASTERSON, R., D PICKTON, 2010. Marketing an introduction. 2nd ed. London: SAGE Publications Ltd
MINTEL, 2016. Clothing Retailing-UK-October 2015 [Viewed 15th February 2016] Available from:
http://academic.mintel.com/display/716211/#
NEW LOOK GROUP, 2015. Ethical Trading [Viewed 25th February 2016] Available from:
http://www.newlookgroup.com/sustainability/ethical-trading

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NEW LOOK GROUP, 2016. Our Customers [Viewed 15th February 2016] Available from:
http://www.newlookgroup.com/who-we-are/our-customers
NEW LOOK GROUP, 2016. Our People [Viewed 15th February 2016] Available from:
http://www.newlookgroup.com/who-we-are/our-people
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NYC, 2016. Commercial waste disposal [Viewed 15th February 2016] Available from:
http://www1.nyc.gov/nyc-resources/service/1425/commercial-waste-disposal
NYCEDC, 2013. Retail in New York City [Viewed 15th February 2016] Available from:
http://www.nycedc.com/sites/default/files/filemanager/Resources/Economic_Data/industry_trends/Indu
stry_Trends_Retail_OPT.pdf
RETALE, 2016. Mango in New York [Viewed 21st February 2016] Available from:
http://www.retale.com/stores/New-York-NY/Mango/v-r334
THE ECONOMIC TIMES, 2015. Definition of value chain [Viewed 12th November 2015] Available from:
http://economictimes.indiatimes.com/definition/value-chain
THE GUARDIAN, 2009. Topshop New Yorks cutting-edge fashion is a Broadway smash [Viewed 15th
February 2016] Available from: http://www.theguardian.com/lifeandstyle/2009/apr/02/topshop-newyork-launch-kate-moss

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