University of Macau

Case 1 written report
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Internationalization of Koyo Jeans from Hong Kong

19/2/2016 A. Issue Identification
Since 2002, Cheung started up the Koyo brand and strived to enhance its brand image. His objective is to make Koyo become an international brand. We consider two issues in Cheung’s development strategy: 1. How does Koyo enter to the Chinese market? 2. How to balance Cheung’s own satisfaction and the profit of the company?

Cheung considered to concern more on the Chinese market. He could choose either to franchise or to own its proprietaries directly. Franchising helps to access to the market easily. More information and know-how can be acquired to solve the problems. Direct investment requires more capital and contains more risks but the company can obtain market responses and full control. Koyo William as a high-end fashion brand, the cities he chose to expend to will influence the sales and the brand image. The custom, geographical location, prosperity and climate of the areas should be considered.

Cheung is certainly successful as a local Hong Kong designer. Cheung has actively spent a lot on enhancing brand image and renovating the stores. As a result, the market has expanded to China and Europe in just a decade. To expand to the business Cheung requires a large amount of capital. We inferred that most reserves of the Koyo companies have used on expansion and it can be very risky.

B. Problem Analysis 1. Branding
Apparently, the general branding of Koyo Jeans is working quite smoothly in different aspects; the increased reputation, the larger customer base, and the improved brand management skill etc. Everything seems to have working just fine without much defects. But if things go deeper, in other words, if the expansion is continually done without any