Market Entry Strategies

Research

Regardless of the same language as well as consumers with common shopping behaviours, the U.S. is still a unique marketplace. The United States perceives differently the brands which are privately labelled. The latter are always viewed as a down market, a collection of social values, and workplace culture in the U.S. Nonetheless, there still exists an excellent admiration deal in U.S. for the brands and lifestyle from Britain (Nayler et al., 2012). Carrying out extensive research and conducting an analysis on the U.S. market is an important factor for ASOS as a British retailer. An in-depth understanding of the consumer’s perception, competitive landscape as well as corporate values is crucial while forming a strategy for entering a market (Rath et al., 2014). However, preplanning does not guarantee a business’ success. The existing extensive research for the U.S. market such as the Tesco’s provides ASOS with better alternatives for strategic entrance in the U.S. market (Lea, 2013).

ASOS’s Brand awareness and on-the-ground team in U.S

The U.S. market is overpopulated by competitive brands and outperforming them is very difficult for various companies. ASOS has strategically created its brand’s sensitization and awareness (Dillon, 2011). Additionally, the effective tailoring of the brand’s website to suit the U.S. audience, and the strategic location of the physical stores are an added advantage for it to enter the U.S. market. Various brands from Britain to U.S. face challenges associated with awareness. The online sales especially can be of lower risk in terms of logistics. However, they pose increased risk from the perspective of a market since they lack a physical store for anchoring the brand. In the U.S market, ASOS would be able to successfully reinforce their brand’s messages by using public relation and the use of social media (Drew and Sinclair, 2014).

The provision of a local team that operates on the ground is an important strategy for ASOS brand to be successful in the U.S. marketplace. ASOS has opened the local fulfilment centre in the United States (Ohio) and as well partnered with various local delivery organizations. Even before the particular centres started working, ASOS had already engaged with the U.S.’s marketing team (Moore, 2012). The local employees that operate on-the-ground in U.S. can lead the digital marketing, editorial and advertising of the content, CRM as well as giving local insights to the London based global team.

The localization heuristics

ASOS can apply the heuristic evaluation methodologies during its expansion to the United States. Heuristics evaluation refers to the usability examinations which aids in problem identification in the design of a UI (Pouresmaeili et al., 2014). For instance, it can be used to format flexibility for dates, times, currency, phone numbers, and addresses. Launching a website in the U.S. does not require substantial translocation costs. The needs that may be incurred by this international business include converting weights, prices, sizes and product spelling and description for the U.S. clients. However, there is a need to review technological assumptions since devices conventions may clash with different format for instance, the keyboards, standards of printers and mobile technologies. Furthermore, there may be different users’ interaction expectations between Britain and the United States (McAdam et al., 2002). With regards to the U.S. market, ASOS will only need to consider the requirements of creating a customer service in all different time zones, differing vernacular and dissimilar holiday calendars for the U.S. clients.

The political factors affecting the ASOS business in the U.S

The two political factors that affect ASOS business in the United States are the government policies as well as the regulation of the retail industries (Christensen and Legraed, 2005). The regulatory laws as a result of politics have affected the industry’s profitability and revenue. The government polices affects the international supply chain of ASOS business in the U.S (Pastor, 1982). Political stability is always good for the business operations. However, political instability results in the disruption of sales and the supply chain of any business. Furthermore, political issues such as detrimental regulatory laws have hindered the efficient operation of ASOS business in the U.S. Both adverse regulatory laws and unfavourable government policies can make it difficult for the retail brands to gain profit in the international environment. For this case, therefore, political factors have been considered as the primary source of uncertainty for ASOS business in the United States.

Recommendations for the identified political factors affecting ASOS business in the U.S

The first recommendation is that ASOS needs to make the better use of technologies such as the artificial intelligence as well as the cognitive intelligence to operate their business within the set regulations. The brand should adherence to the country’s government policies for the enhancement of their quality standards. The second recommendation is that ASOS needs to enhance its efforts regarding the innovation of its products while addressing the issues of product regulations (Krehbiel, 2010). Taking the advantage of opportunities provided by the government policies is also an important recommendation for this retail brand. Finally, ASOS should expand its business towards the growing U.S. markets in order to maximize the company’s revenue.

Ethics

ASOS is committed to being the responsible retailers and where the supply chain of the employees are very much protected and respected. In the year 2017, the company launched a new ethical trade program that mainly concerns three critical pillars of practices, people, and partners (ASOS, 2014). With regards to the complexity and reach of the fashion industries’ modern supply chains, the fashion workers worldwide are always vulnerable. However, ASOS values the employees’ safety at work place, their financial security, and where managers respect them as well. The company operates strictly with its suppliers in the key sourcing regions to enhance their commitment and knowledge of how to upgrade the labour conditions for its workers.

Additionally, the company has developed four projects which are directed towards enhancing the working conditions of their employees. These projects are the factory safety and health which is aimed at operating with suppliers to make sure that there would be no companies in their supply chain failing to meet the sets standards of safety and health by 2016, during inspection by ASOS’s team of local auditors (Perry et al., 2014). The second project is dialogue with managers. The company’s primary purpose is to pilot the training projects in the important five factories by the year 2017, thus the effective implementation of the employees’ dialogue. The third project is the living wage. ASOS has directed this project towards piloting the living wage studies in three important companies by the year 2017.

The last project is the financial support. Its fundamental purpose was to improve the access of the Indian workers to the banking services by Geosansar (a private financial banking services provider). Alternatively, the company’s sourcing practices have various impacts on its employees and intern supports their objectives concerning the employees in the supply chain (Femie et al., 2015). With regards to this, the company has made the sourcing standards, policies and practices to set out the company’s expectations from partners and providing suppliers with aids to improve their services. The company has come up with the latest sourcing department which is operating with their factories, suppliers and the team of local auditors in order to make sure that efficient and responsible sourcing is the central part of their long term commercial developments.

This department for sourcing is mandated with regular reviewing of the ASOS sourcing practices to fulfil their objectives. The ethical trade team which was operating previously is also an important part of the sourcing department. The latter is mainly to ensure that the principles for ethical trading are embedded into ASOS’s commercial operations as well as the decisions regarding the supply chains (ASOS, 2014). On the other hand, ASOS considers suppliers to be at the centre of their program. They argue that achieving their ethical trade vision is only possible through working together and towards moral and commercial excellence. However, the suppliers can regularly face the different barriers and pressures to while sharing the ASOS’ vision. Nonetheless, they require their suppliers to be fully aware of their vision and to operate with them in enhancing the conditions of 79000 employees in the entire supply chain (ASOS, 2014).

They as well need to ensure that ASOS’s supply chain adheres to their standards. ASOS’s plan regarding the latter is by working together with their suppliers to understand their weaknesses and strengths in order to help them fulfil the standards required to develop commercially with ASOS. Furthermore, the company will provide targeted training for all the suppliers regarding the requirements of their ethical trade (ASOS, 2014). According to ASOS, its performance include launching their new ethical trade program, setting up four projects mainly to improve the employees’ welfare, developing an ethical purchasing practice module for their retail brilliance school for merchandisers and buyers and finally, they have visited 337 manufacturers’ sites to overlook the working conditions as well as to aid them in realizing their set standards.

Customers

ASOS being like any other business, they consider customers as their livelihood, and they have more than 8.8 million customers in 240 different nations. Many of these customers are in their twenties, and ASOS is working towards ensuring that all of them can appreciate themselves through fashion. ASOS wants to make good use of their influence among the young people who loves fashion to promote healthy and more responsible body images as opposed to other brands in the fashion industry (ASOS, 2014). As per now, ASOS has made websites and clothing ranges that promote and celebrate the customers’ diversity. It has participated in advisory panels of governments to provide answers concerning the issues of body confidence.

The company has made available the professional and experts to train the workers concerning health issues and body image. ASOS poses a Model Welfare guidelines and policies regarding digital manipulation to secure the clients and models. With regards to the customer care, the company wants to ensure that their clients gets authentic, helpful and honest experience which interacting with them as well as making available the required data to the customers (ASOS, 2014). They have invested in more advanced technology in order to provide the customers with instant online help. This has made it easy for the company to be in contact with the customers by any device, in actual time using most languages (Femie and Perry, 2011).

The primary services provided by ASOS include protecting the customers’ data. They use an automatic anti-fraud system that reviews single orders as well as selecting three percent to be manually reviewed by the profit protection team to ensure effective mitigation of threats. Finally, ASOS has physical and technical security controls that prevent access to the client’s data by unauthorized person. The latter include encryption of some of the client’s data, access restrictions, and the alert systems (Wong and Yazdanifard, 2014).

Environment

ASOS being an online business, it lacks any bricks and mortar store in many nations. However, they ship their products all over the 240 countries mainly from the UK’s warehouse. The offices are in the UK, Berlin, Shanghai, New York, Sydney, and Lille. The main environmental impact from the company’s activity is carbon emission from these deliveries, operation of the buildings, wastes as well as packing. ASOS has continuously grown especially with regards to the international market (ASOS, 2014). The latter has resulted in their carbon footprint to increase inevitably. Therefore, the company needs to identify as well as implement adequate systems to improve the conditions of the environment to conduct their activities. By the year 2013, the company’s overall carbon footprint escalated to 42914 tons of carbon (IV) oxide. 55% of this resulted from customer delivery emissions with 97% freight accounting of the latter figure (ASOS, 2014).

As per this result, therefore, the company is now considering the environmental criteria while selecting their carriers. ASOS has expanded the size of their Burnley warehouse by more than 25% implying that more stocks can be held in their central warehouse (Joyner and Payne, 2002). The stock amount required to hold offsite is reduced and the number of miles covered by vehicle as well reduced by 200000 in a single year. As per the energy efficiency is concerned, ASOS’s buildings produce around 34% of carbon footprint. They are purchasing energy through the use of green energy tariffs. On the other hand, they have installed many efficient lighting systems in all their buildings (such as the LED sensors which are rated ‘excellent’ by BREEAM at the Barnsley warehouse) (ASOS, 2014).

Currently, ASOS is reviewing chances of achieving ISO14001 environmental management certification at all of the company’s offices. On the other hand, ASOS conducted a detailed review in the same year regarding their packing with the primary aim of reducing the packaging volumes as well as reducing the ink amount used (embracing recyclability). Nonetheless, they still maintained good condition while delivering the products (Papahritou and Bilabis, 2016). They made sure that their UK’s packaging standards marched the international standards by adding the number of categories of products which can be sent in one bag instead of a box that made it possible for them to fit many parcels onto the cars.

According to the last year’s report by Ti regarding the European E-Commerce Logistics, the author categorized ASOS because of its unique understanding and approach of supply chain. Generally, the company has continued performing better regarding the supply management. The company has expanded to more than 240 countries and to support the particular expansion, technology and warehouses are its main areas of investment. It opened a location in China last year and is planning on opening a new facility in central European in 2014 (Cathy, 2014). The Ohio’s retail ware house can serve more than 20% of the U.S. orders. The company as well closely monitors the transportation management. For instance, All the port cargo Services has always been managed by ASOS’ international sea and air movements since the year 2012. They expanded it to encompass ASOS’ overland services from its major EMEA supplies in the entire 14 nations conducted daily. With regards to the customer’s attention, ASOS in partnership with DPD introduced the “Follow My Parcel Service” in 2016 (Cathy, 2014).

The service makes it possible for the real-time tracking low to a delivery window of fifteen minutes. ASOS customers were delivered a text and or an email message on the delivery date with a time slot of one hour delivery (Barnes and Lea, 2010). As a result, the clients can track their purchase through GPS as well as online mapping service using a mobile device or a web. The company, on the other hand, is testing the locker collection points in the United Kingdom. May be ASOS’ main success is as a result of the social media usage. It collects and examines data from many sites (Femie, 2014). The latter is then used for the prediction of both the demand as well as buying trends. Finally, the results are fed back into the company’s supply chain for running of smooth operation and the provision of strong satisfaction of the clients. Even though other companies are using the same systems and methods as ASOS, it seems that ASOS utilizes its findings in a very successful manner (Hammant and Brrainthwaite, 20017).

Strengths or weaknesses and how they contribute to the competitive advantage or disadvantage of ASOS

One of the best ways of examining the real issues regarding any company is through performing a SWOT analysis. It determines the strengths, weaknesses, opportunities, and threats for any given organization and aid the particular company to understand the areas for improvement (Pahl and Richter, 2007). The ASOS’ strengths include being the business for over ten years and making a business model which it adheres to. The company does not need to make huge changes. This implies that the company’s stakeholders set the things properly at the first instances. ASOS’ has constantly experienced increasing growth for the last previous months possibly indicating a higher financial level. It is highly famous in various nations and poses millions of its registered users (Koshy, 2006). On the other hand, ASOS’ weaknesses include selling only through the online environment, an indication that the company is missing opportunities of selling to a broader audience. Opening of the brick-and mortar stores could have been an added advantage as it offers employment opportunities for the local people thus boosting of the economies.

Retaining the exact business model for an extended period while other organizations have changed to match the recent trend and outperform the competitors is another ASOS’ weakness. With regards to the above illustrations, there are sectors in which ASOS is requiring an improvement as well as areas in which it is doing very well. The similar case applies to any organization. (Martin and Merissa, 2014). ASOS should not fail reconsidering its weaknesses or taking advantage of its strengths because it may find itself in a challenging situation which could have been avoided easily just by making minor changes.

In conclusion, ASOS has fewer problems than many companies. It has won many awards and is always focused on customer satisfaction than many retailers. However, a single online retailer in UK may not be the excellent long term choice. Thus the company needs to make the necessary trending changes. ASOS’ choice of moving into the U.S. market should be accompanied by expectation of eventualities so that it can survive the changes in the U.S marketplace.

References

Barnes, L. and Lea-Greenwood, G., 2010, “Fast fashion in the retail store environment” International Journal of Retail & Distribution Management, 38(10), pp.760-772. Christensen, T. and Legraed, P., 2005, “Trust in government: The relative importance of service satisfaction, political factors, and demography” Public Performance & Management Review, 28(4), pp.487-511.
Dillon, S., 2011, The fundamentals of fashion management, A&C Black. Drew, L. and Sinclair, R., 2014, “Fashion and the Fashion Industry” In Textiles and Fashion (pp. 635-647).
Fernie, J. and Perry, P., 2011, “The international fashion retail supply chain” In Fallstudien zum Internationalen Management (pp. 271-290). Gabler Verlag, Wiesbaden.
Fernie, J., 2014. 02, “Relationships in the supply chain” Logistics and retail management: Emerging issues and new challenges in the retail supply chain, p.35.
Fernie, J., Fernie, S. and Moore, C., 2015, Principles of retailing, Routledge.
Hammant, J. and Braithwaite, A., 2007. Supply chain agility-managing the consequences of increased vulnerability.
Hammant, J. and Braithwaite, A., 2007. Supply chain agility-managing the consequences of increased vulnerability.
Joyner, B.E. and Payne, D., 2002 “Evolution and implementation: A study of values, business ethics and corporate social responsibility “journal of Business Ethics, 41(4), pp.297-311.
Koshy, D.O., 2006. Garment exports: winning strategies, PHI Learning Pvt. Ltd.
Krehbiel, K., 2010. Pivotal politics: A theory of US law-making, University of Chicago Press. Lea-Greenwood, G., 2013. Fashion marketing communications, John Wiley & Sons. Martin Harrison and Marissa Gluck, 2014, “U.S. Retail Market”
McAdam, P.E., Gruttadauria, B.R. and Lazar, G.W., EMC Corp, 2002, Method for control and communication between computer systems linked through a network, U.S. Patent 6,480,882.
Moore, G., 2012, Basics Fashion Management 02: Fashion Promotion: Building a Brand through Marketing and Communication (Vol. 2), A&C Black.
Naylor, R.W., Lamberton, C.P. and West, P.M., 2012, “Beyond the “like” button: The impact of mere virtual presence on brand evaluations and purchase intentions in social media settings” Journal of Marketing, 76(6), pp.105-120.
Pahl, N. and Richter, A., 2007, “SWOT Analysis. Idea, Methodology and a Practical Approach”
Papahristou, E. and Bilalis, N., 2016, “A new sustainable product development model in apparel based on 3D technologies for virtual proper fit” In Sustainable Design and Manufacturing 2016 (pp. 85-95). Springer, Cham.
Pastor, R.A., 1982. Congress and the politics of US foreign economic policy, 1929-1976 (Vol. 5). Univ of California Press.
Perry, P., Fernie, J. and Wood, S., 201, “The international fashion supply chain and corporate social responsibility” Logistics and retail management: Emerging issues and new challenges, pp.77-100.
Pouresmaeili, H., Nezakati, H. and Mehdizadeh, A., 2010, “The Effects of Internet on International Marketing Communications” In Annual AGBAWor1d Congress.
Rath, P.M., Bay, S., Gill, P. and Petrizzi, R., 2014. The why of the buy: Consumer behaviour and fashion marketing, Bloomsbury Publishing.
Welters, L. and Lillethun, A. eds., 2011. The fashion reader, Berg Publishers.
Wong, K. and Yazdanifard, R., 2014, “How Fast-Fashion Apparel Stores are able to Operate Sustainably in New Global Economy" Journal of Research in Marketing, 3(2), pp.274-278.