clothing. However, their threat is not significant to market players (Datamonitor Plc 2011) .more detail please see Appendix 9.
PESTLE analysis
With stable economy and politics combined with rare corruption, Norway is an attractive destination for new entrants (Hamre et al. 2010). The country respects almost all EU directives as a result of being a member of the European Economic Area (AMB Country Risk Report 2013). Between 2013-2020, growing per capita annual disposable income on average by 2.15% (Appendix 10) together with rising per capita consumer expenditure on clothing and footwear on average by 1.35% (Appendix 11) will allow Norwegian consumers to enjoy their discretional spending ( Euromonitor 2013a; Euromonitor, 2013f). The slowest growth in population will be seen in the 10-24 age group (Bershka s target group) and will amount to only 7.23% in 2010-2020 (Appendix 12) (Euromonitor 2013c). The fact that sport activities are supported by the government can boost expenditure on sport apparel, so as growing interest in sport activities and healthy lifestyle (Euromonitor 2013a, Euromonitor 2013d). Natural fabrics are gaining more interest (Euromonitor 2013a). Being aware of their higher quality, Norwegian customers are more willing to pay higher prices. The apparel sales via internet retailing is expected to continue its increase (Euromonitor 2013a). The fact that «internet retailing remains more popular amongst younger consumers» (Euromonitor 2013a) is likely to benefit Bershka. A foreign company that enters the Norwegian market using wholly owned unit does not need to apply for approval or concession when buying a property (uipi, nd). In June 2014, Norwegian government will be the first in Europe to introduce restriction prohibiting the use of perfluorooctanoic acid (PFOA) in consumer products, applied also to textiles, in the quantity higher than one microgram per square meter (ul 2013).
Competitors analysis
The Norwegian apparel market is fairly fragmented with international brands being the key players. Following companies H amp; M Hennes amp; Mauritz AB, Varner Gruppen AS (Cubus and Dressmann chains) and KappAhl AB hold the leading position accounting together for about 27% of market value share in +2012 (Appendix 15) (Datamonitor Plc 2011; Euromonitor 2013a). «The popularity of the companies positioned at the low end of the market is also supported by their wide and large portfolios» what «remain the important factors in the competition» (Euromonitor 2013a).
H amp; M Hennes amp; Mauritz
Hennes amp; Mauritz (H amp; M) is a Swedish clothing company offering its products for women, men, teenagers and children which opened its first overseas store in Norway in +1964 (MarketLine 2013b; visitvasteras.se 2013). In +2012 it had 111 stores in Norway (Appendix 16) holding 10.1% of market value (Appendix 15) and 2,776 stores around the world. In +2012 the turnover of the company, including VAT, amounted to around US $ 21,66 billion (about.hm 2013a).
Varner Gruppen
Varner Gruppen is a Norwegian clothing company owning, among other chains, Cubus and Dressmann (MarketLine 2013c). The company has 595 stores just in Norway while around 1,316 stores (Appendix 18) in 8 European countries (Euromonitor, 2013g). The profit earned in +2012 amounted to US $ 162,843 (Appendix 18). Together both chains account for 10.2% market value (Appendix 7) while the company overall accounts for 13.1% (Appendix 15) (Euromonitor, 2013a; Euromonitor, 2013g).
KappAhl is a Swedish company offering its clothes for women, men and children putting, however, the main focus on women aged 30-50 (Euromonitor, 2013e). The company opened its first store in Norway in 1988 and 14 years later it had 103 stores in Norway holding 4.1% of market value (Appendix 15) (kappahl 2013b; investors.kappahl 2013; Euromonitor, 2013e). Its turnover for 2011/2012 amounted to US $ 6,67 million (kappahl 2013a).
Key success factors of the industry
Quality of products and brand reputationNorwegian customers quality is important thus they are prone to pay more in order to maximize the clothing replacement cycle. Due to higher awareness of natural fabrics and their quality, organic garments are gaining more and more popularity. Brand reputation is also important, especially that Norwegian customers pay lots of attention to working conditions for employees in the production and perceive them as a necessary factor while producing high quality garments. Therefore, the domination of global brands will be dependent on the reputation the companies will present (Euromonitor 2013a).
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