Each of these strategies has advantages and drawbacks. The extent of those advantages and drawbacks is related to a number of factors involving transport costs, trade barriers, political risk, economic risk, business risk, costs as well as company s strategy. Young et al (1989) also emphasizes that control is one of the crucial factors influencing the success of a company in a new market.is a complicated process demanding preparation and adequate research in order to be successful. There are lots of frameworks and analysis making this process easier allowing companies to predict how much profit they can gain. Last but not least, entry market strategy is also crucial for the company s success therefore it is important to choose such a strategy that will be adequate to the conditions and the environment on particular market.
industry overview strategy industry market
In the past years Norway s apparel market recorded growth both in volume and value sales which both amounted to 2.4% on average providing a constant growth year by year (Appendix 1 and 2) (Euromonitor, 2013a). High level of GDP per capita standing at US $ 101,518 together with low unemployment rate totaling 3,5% in 2012 sustained the strong national economy and contributed to the positive development of the market inspiring consumers to increase their expenditure on apparel (Euromonitor, 2013a; Euromonitor , 2013b; Euromonitor, 2013c). In the following years up to 2017 the Norwegian economy is expected to continue its progress with growing real GDP on average by 2.4% (Appendix 3). Both volume and value sales are expected to grow each year by 1.7% and 1.6% respectively (Appendix 4 and 5) (Euromonitor, 2013a; Euromonitor, 2013h). Growing GDP per capita, stable low unemployment rate, rising disposable income and positive changes in volume and value sales terms will continue to provide constant development of the apparel industry indicating the optimistic and positive forecast performance for the following years (Euromonitor, 2013a; Euromonitor, 2013b; Euromonitor, 2013c) .to rising disposable income, Norwegian consumers have more money to buy clothing especially that apparel serves as a way of expressing their personality (Euromonitor, 2013a; Euromonitor 2013d). However, they are quite highly influenced by media and icons and this trend is expected to increase. Young consumers will remain the most sensitive segment to price changes (Euromonitor, 2013a) .based retailing remains its dominant position in apparel distribution channel with apparel specialist retailers being on top and contributing to 76.7% of apparel sales in +2012 (Appendix 6). However, increasing interest in using internet retailing is expected to continue taking shares from store-based retailing (Euromonitor, 2013a) .Norwegian apparel market is dominated by international brands among which H amp; M, Cubus, Kappahl and Dressmann are the main competitors holding altogether around 24% of total apparel market value (Appendix 7) (Euromonitor, 2013a) .the perspective of doing business, Norway is a highly attractive destination for capital investment being ranked 6 th for the Ease of Doing Business in 2013 with small but rich population (Euromonitor, 2013b; Invinor, 2013). The corporate tax rate amounts to 28% which is above the Europe average (Appendix 8). However, Norwegian corporate tax rate is a flat tax and is to be reduced to 27% in January +2014 (Invinor, 2013).
Porter s Five Forces framework
Porter s Five Forces has been used to further analyse the Norwegian apparel industry. The framework can help the company with better understanding of the structure of the industry and revealing the most important aspects of the competitive environment as well as industry s current profitability (Porter, 2008). In order to clearly define the following forces, the buyers will be taken as individual consumers while textile producers and workforce as the suppliers.
Summary
Although Norwegian apparel industry is quite fragmented, its moderate growth within past years helps to abate the intensity of rivalry. Due to the liberalization of international trade, suppliers power is weakened by the competition from producers in low-wage regions. In spite of the lack of switching costs, buyers power is weakened due to their susceptibility to branding and advertising. Since demand patterns change rapidly, companies, while attempting to maintain market share, aim to gain customers by utilizing brand positioning and running marketing campaigns. Low entry barriers together with moderate capital requirements creates high possibility for new entrants. Although there are no substitutes for garments, there are some alternatives to retail chain in the form of home-made, custom-made or second hand ...
