The case basically shows us the fast improvement in Indian economy, and therefore, great opportunities in targeting this country for business. India has been among developing countries and recently it has been improving more quickly. Why India?
According to National Portal of India, based on Purchase Power Parity (PPP) India has the fourth largest economy of the world. Today India is an attractive country for investment and business opportunities because of a huge manpower base, natural resources and macro-economic fundamentals. Since 1991 some economic reforms have been occurred in this country, which as result, have been providing friendlier environment for investors through a liberalized policy framework spanning the whole economy. http://business.gov.in/indian_economy/index.php
According to Hindu magazine, for international luxury brands, “India is no longer a mere testing ground, but a lucrative market. Estimates suggest that India has more consumers for luxury goods than the adult population of several countries.” Based on the World Wealth Report 2005-06, published by Merrill Lynch and Cap Gemini, India has the world’s second fastest growth at 19.3 per cent in the number of high net-worth individuals in 2005. Every year 25 million people are getting added to the Indian middle class population. Therefore, companies and brands across the world, especially luxury brands cannot take their eyes off this fact, since it is a great opportunity for them.
Industry estimates suggest that more than 200 international luxury brands are trying to make into the Indian luxury market, worth $444 million (according to the “India Luxury Trends 2006” report by KSA Technopak), growing at 30-32 per cent. According to the Synovate PAX media survey 2006, the ownership of luxury goods has grown from 15 per cent to 19 per cent since last year. Those owning luxury jewellery ($500 and more) now account for 17 per cent of affluent India. Spurred by this growth in the purchasing power of young India, these brands are actively looking to either launch themselves there or scale up their existing presence. http://www.hindu.com/mag/2007/06/03/stories/2007060350090400.htm
Harry Rosen expanding to India
Harry Rosen is a privately owned Canadian luxury menswear retail chain. The company was established in 1954 by Harry Rosen, the founder and executive chairman of Harry Rosen Inc. The company’s headquarter is located at Toronto and it owns 15 stores across Canada. Harry Rosen accounts for 40 percent of the Canadian market in high-end menswear. For Harry Rosen, as a luxury company, there are many good reasons and great business opportunities to expand into Indian luxury market. SWOT Analysis:
* 57 years of experience and expertise in its business
* High quality products and brands with reasonable prices * The company with large capital. The company is greatly capable of promoting its brand in new location Weaknesses
* Lack of enough knowledge about Indian culture
* No experience about Indian fashion and styles
* Harry Rosen brand has no worldwide recognition specially in India * The company has proven its success by having a large share in the clothing market in Canada. It is most likely that Harry Rosen will be able to successful in India too. Opportunities
* Large population with young average age of 25 years
* Indian people are becoming able to afford luxury products more and more every year * Lower costs, more profit. The company may be able to outsource some of its costs occurring in Canada to India and save money, because of the lower wages in India. Threats
* High government duties and taxes on luxury products
* Different fashion in compare to European and American fashion. * Too many different cultures and different tastes
* Existence of competition (other high end brands and stores) * Risk of not being...