Q1. What screening criteria should Skagen Designs use in connection with its choice of new markets for its watch collection?
When Skagen Design chooses the new markets and use the connection with them, at first, they have to care about price. Competitive price is not only one of the essential of their brand, but also the easiest method to enter new markets, especially in developing markets. In watch markets, you can see which markets is developed or developing from the charts, after looking at those, you will see which strategies Skagen Design needs to enter into each market with. Somehow, competitive price is qualified advantage in any markets, of course, it is a lot more affecting to developing markets. So, Skagen Design need to keep the low price and proper quality, of course, with their characteristic design either.
Next, aside from price, they also have to separate market into developed & developing markets in watch markets as I mentioned already. By dividing them into two groups, they can decide which strategy they will adapt to, for instance, if the market is developed market, they have to upgrade their quality. It will charge more cost, so the price should be higher, but the customer in market doesn’t need normal one, so it is necessary. Meanwhile, if the market is still developing market, the best way to attract them is to keep low price with proper quality. Also, Skagen Design has simple design, it could make easy to adapt slight change from local needs.
Third, Skagen Design should check whether the market has any forces with international trade such as high tariff. It is basic step before getting into the market, since Skagen Design has not bigger brand power comparing to competitors such as Gap, Calvin Klein, it has to be emphasized with quality and low price. With high tariff, it ain’t possible to keep lower price than local brand, and not even other international brands which has good online markets. So, if the market has high tariff or regulation from its government, Skagen Design should operate their business in small step such as online supply. It is uncontrollable part for every watch companies to change the market situation, so it has to keep checked, since it is also possible to get first mover’s advantage if Skagen Design gets into new market with low regulation at first/
Last, no matter how the market is developed & developing or has different situation, Skagen Design has to keep their watch proper quality and design. It is essential for every business to keep them. Consumers never buy crappy product again, also the product from those brand images. Even though Skagen Design could offer lower price than others, their brand shouldn’t be same to local anonymous brand images, so they have to keep their brand characteristic, either. Quality & characteristic design are always the most important parts in every markets, and competitive advantages for business success.
Q2. Make a specific choice of new markets for Skagen Designs. Table 1 and Table 2 can be used to support your argument.
The characteristics of Skagen Designs are colours, shapes, and simplicity, etc. However, one of the most competitive characteristics is competitive price. Their high turnover has been kept for decades, and it’s originally started from competitive price, of course, its design either. To choose which markets Skagen Designs get into, they have to consider not only how much retail volume they have, but also how much they are afford to pay for watch. At least, they have advantage with their price comparing to competitors like Calvin Klein, Coach, Guess, Gucci, Swatch, Alfex and Jacob Jensen, etc, somehow it could make their product more successful in retail market.
About retail volume, we can confirm it from Table 1 and Table 2. From Table 1, retail volume in thousands of units can be estimated, for sure, USA market has been still the biggest market...