Managing in a Global Economy

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UNIVERSITY OF LA VERNE
La Verne, California
Hollister Co. Business Feasibility Study
Bus 581 – Managing in a Global Economy
Dr. Omid E. Furutan

Group 2
Wenjia Li
Li Ji
Kun-Yi Lin
Hsiang-Yi Liu
Xing Long

October, 2012

Table of content
Hollister Co. Business Overview 4
Foreign market expanding motivation 4 Three countries study: Japan, Singapore and Hong Kong 6 Japan 6
Singapore 9
Hong Kong 14
Singapore 17
Marketing 17
Human Resource management 19
Human Resource Management Practice 19
Human Resource Management Style21
Hiring and Retention 22
Training and Advancement 22 Compensation 23
Ideal Human Resource Management23
Political and Legal Environment 24
Legal Environment 24
Table of content (con’t)
Political Environment 25
High Quality of Life 28
Economic and Financial Environment 29
Banking System 32
Accounting Standard 33
Cultural 34
Power Distance 35
Collectivism – Individualism 36
Masculinity 36
Uncertainty Avoidance 37
Long Term Orientation 37
Organization Structure 38
International Expansion Strategies 40
Recommendation 41
Appendix A 43
Reference 50

Brief Overview of the Company
Hollister Co. is an American lifestyle brand by Abercrombie & Fitch Co. The company was launched by July, 2000. It is headquarter at New Albany, Ohio. Till 2012, Hollister already has 571 stores in the world [Appendix 1]. Like its parent company, Hollister sells casual apparel which include knit layers, tanks , graphic tees, polo shirt, plaid, classic, sweaters, hoodies, outwear, jeans, pants & shorts, skirts, dresses, sweatpants, and yoga; and the accessories which include totes, belts, socks, and fragrance. The concept was originally designed to attract consumers aged 14–18, at a lower price than the parent brand through its California-style inspired image and casual wear. Goods are available in-store and through the company's online store. It was ranked as the second most preferred clothing brand of US teens on a long list of actual West Coast companies in 2008 by Piper Jaffray. (Hollister official website, 2012) According to Abercrombie & Fitch’s latest 10-k form, Hollister’s net sales in 2011 and 2010 are $2,022,002,000 and $1,552,814,000, separately. There is 30% increase of net sales from 2010 to 2011. Based on the data, we can figure out that Hollister’s net sales are almost two times to its parent company. Foreign Markets Expanding Motivation

The motivations for Hollister to expand in foreign markets will be defined as two categories. First of all, Abercrombie & Fitch wants to get rid of its lower sales in U.S market and earn profit from outside expansion. Abercrombie began to launch its expansion plan outside the USA since 2007, driven at least in part by a weakening of its domestic market. For the quarter ended July 28, Abercrombie reported a profit was dropped by nearly 52%. According to media reports, more than 135 of its American stores have been closed since 2010 and there will be 180 closures in the following year. However, based on Abercrombie & Fitch’s 10-k form, the net sales of international stores are increased steadily. The company therefore has high hopes for the European and Asian markets, where its expansion is being pushed forward. (WSJ, 2012) Hollister, as one of its subsidiaries, plays a crucial role in the expansion plan because it has good performance...
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