Table of contents
1.0 Introduction
2.0 Situation analysis
3.0 Summary of key issues/challenges
4.0 Strategic Options and recommendations
5.0 Marketing Mix
6.0 Summary
7.0 References and bibliography
8.0 Appendices

Introduction
The global fashion industry is altering with higher end fashion stores opening and selling their goods on display in more international markets such as China. This report analyses and develops the foreign markets for high end fashion. A company has been set up is called Ted Maker Ltd. The company is looking into investing in overseas with its business. The company is already an established company which sells accessories in the UK. This report will seek to develop whether or not the company should open a store overseas. With competitors opening new stores and an increase in new store development, competition in the market is getting high. This indicates that how critical it is to the chain to expand its product lines and operations, in order to advance a competitive strategy to expand the financial attainment in the high fashion industry. The report will be seeking to identify important facts and figures around the business to recommend the best course of action to expand the chain. This report seeks to provide an analysis of the luxury accessories store by undertaking a strategic audit. The report will consider going on to any feasible strategic possibilities in worldwide expansion.

2.0 Situational analysis

2.1 Macro and Micro Environment
According to Bradley (2005), Pestle analysis is a measurement means to evaluate the environment surrounding the establishment (Bradley, 2005)

Political
Austerity in the UK has mainly impacted the UK low income market with low wages and fall in disposable income. The high taxes have hit the middle income market so the store will need to consider the consumer and visitor decline. The UK government has introduced tax breaks so the company has an opportunity to expand its business in the UK.
Economical
Rising unemployment in the world has caused consumers to carefully spend their money. Economic growth and rising prosperity in the Asian market with Indi and China showing the highest GDP growth forecasts. This provides Ted Maker Ltd the opportunity to grow and expand on to the Asia market. European recession and euro fluctuations can influence the consumer confidence. The Middle East’s recent events have resulted in economic troubles.
Social
The largest population continent is Asia with a population of 4.2 billion accounting for over 60% of the world’s population. The rapidly growing middle class in the Asia market where forecasts predicting over half the population will be middle class by 2025 and China’s middle class population will increase by over half in 2030. Luxury goods mainly attract middle class and the high class consumers where spending more money is not a problem. Consumers are changing its views. European population is ageing and the birth rates are decreasing. Increase in social media will mean that Ted Maker can make a very interactive website and can spread good reviews amongst customers.
Technology
Consumers are moving at a fast pace and consumers are changing its attitudes. Competitors are using more interactive websites to customise and buy new products from the high end retailers.
Legal
The laws in which countries are operating is very different and it may cause barriers for Ted Maker’s plans of progression. Employee and customers and labour policies. Health and safety laws. The changing in regulations and new tax laws can force Ted Maker Ltd to adjust and comply with new regulations.
Environmental
High end retailers use fur and animal skin to create certain product which taints their image.

The following findings were identified from the analysis
Europe and North America’s economic downturn which saw increased unemployment causing the buyers to spend more cautiously. The economic crisis has affected the GDP of main areas of the European Union such as the UK, Germany and France compared to its Asian counterparts which have seen high GDP increase such as China and India. Political factors such as harsher austerity measures have affected the low income sector of the countries. Asia has a very extraordinary population progression and the mounting salaries amongst the middle class have caused a rise in disposable income.

Five forces analysis
Porters five forces are used to asses micro environments and contain five forces in the theory. The forces include bargaining power of buyers, bargaining power of suppliers, threat of new entrants, threat of new substitute products and Competitive rivalry.

The threat of new entrants
Capital requirements because it has a very high break-even point. Consolidation of luxury brands achieve high economies of scale. The sector has high marketing and management costs, high rent to develop brand stores in very prestigious areas. High salaries for the craftsmen, high investment is needed for promotional activities. The threat of new entrants is quite high where a organisation with healthy financial capital can enter the market.
The threat of substitutes
There is a rise in popularity in middle price brands and worldwide shipping of counterfeit goods from china are also putting the business at risk. Increased internet accessibility allow luxury brands to sell its products online. The threat of substitution is moderate.
Buyers bargaining power
Increase in a number of wealthy households and the emergence of the Chinese middle class. The luxury stores rely heavily on the top tier of customers. The possibility of backward integration is very low. Buyers bargaining power is very low.

Suppliers Bargaining Power
There a limited amount of high skilled workers, retiring craftsmen and couture level embroiders dropped dramatically around the world. Some key components are outsourced e.g. leather. Highly specialised experts. The brands that are sold are very exclusive so have no choice to switch to another supplier. Supplier bargaining power is moderate.
Rivalry among existing competitors
The market structure is an oligopoly because there are very limited exclusive high end brands. Specialised assets may be difficult to sell. Rivalry amongst retailers is high.

3.0 Summary of Key issues and challenges
There is a range of varieties that can lead into the production of a store.

SWOT analysis
Strengths
The strengths of Ted Maker’s luxury store are the brand loyalty of the consumers because the store sells branded accessories that are well known and will attract the same kind of customers like any luxury branded accessories store. The store is established and can use its expertise in the market to develop the company’s entry strategy in to a new market because the suppliers will not change which shipping costs may vary depending on the location. The company has an effective supply chain management because stock that are running low are stocked up in advance. The store has customised and highly selective products for different consumers. The luxury store will have developed strong relationships with some exclusive designers.
Weaknesses
The company has a lack of knowledge and experience on expanding to emerging countries like China and India. The Chinese market is relatively new to big brand names so marketing the product may be hard. The luxury store will have less bargaining power with designers because of their individual popularity. The store sells expensive products which are hard to market. The luxury brands only appeal to one set of demographics which limits the scope of its sales. The market is hard to narrow down so the shops have to be in expensive affluent areas to reach its target market which can eat away its profits.

Opportunities
Luxury industry is growing rapidly in all the emerging markets which include countries like China and India which have around 2.5 billion population. Many innovative and new marketing strategies can be applied through its social media and website the company owns. The company can help certain designers set trends and provide a base platform for the particular designs. The company can use its powerful brands to target a specific consumer which can be the high class consumers. The products are all high quality and very popular which can be marketed to sell very well.
Threats
Increased competitions from rival luxury goods stores such as House of Fraser and Harvey Nichols which have established brand household names. The currency inn new markets can fluctuate up and down causing profit losses. In some countries the company may have problems with the logistics of the company which can take time and the company may lose money. Alternating countries have different crime rates and popularity amongst the luxury brand which can cause fraud and security problems. May be difficult to fit into a specific culture and variety of audiences.

4.0 Strategic Options
For Ted Maker to reach its potential consumers there a several strategic options the company has. The newest cities in China can be viable for growth with potential sales very high considering recent boom on brand sales.

Joint ventures
An international joint venture allows an organisation to establish and market a presence abroad with the help of a foreign partner that is local in the area. This approach is very useful to the China market where it eases government sanctions and policies to limits its monopoly in the country. Ted Maker can prior to the deal allocate resources, delegate operational responsibilities, consign the risks and assign potential rewards. The local partner can use its expert knowledge from the territory they are familiar in and help boost the companies’ sales.
Foreign acquisition
Ted Maker can directly invest in company abroad and strengthen its position because of the knowledge the company gains from the acquisition. This strategy is part of a long term strategy where the company will look to expand in the near future. Buying over 50% of the stakes the firm can essentially control the company and invest to regenerate the store. Nationalist consumer favour their countries, so it makes sense to use an established company to gain new customers. Foreign acquisition unusually require an abundance in resources something a smaller companies do not have.
Price
Price is a very big factor in the luxury industry even more so in foreign markets. The price is always high because if the specific target audience. Ted Maker has only branded products which do not allow the company to sell their product for cheaper price in other countries. This may prove hard to sell to countries such as china where the government recently reduced the value of the Yen making it harder for luxury brand to sell their goods because they become very expensive to the consumer. It is more important to establish the price experience and the environment in the store.

Targeting
A focus strategic approach will be applied by Ted Maker with a focus on high end consumers and middle income families. Considering the estimated growth of Chinas population such approach will be possible price increase at some point.

Positioning
The positioning of the company is recommended to be in the emerging cities of China where growth is exponential and population growing rapidly. The cash flow in the city can help Ted Maker to establish a name in the city and increase its profits.

6.0 Marketing Mix
Product
The famous brands that Ted Maker sells can are similar to other organisations which can boost its agenda because of the heavy marketing there is involved already by the famous individual brands. Ted Maker offers clients with new fashion wear through their monthly letter. As every product is already in the store the consumers will have a vast amount of choice about the products they recognise and love. The product are world renowned so shoppers feel more secure when buying them because of the quality.
Price
The price of the product is mid to high starting from accessories at £50 which then reach thousands. Alterations to the price are difficult to make because of the high supplier prices.
Promotion
The transition between the UK to China will be very difficult because of the laws and the tight control the government has over its population. But the famous brands are world renowned so Ted Maker will not struggle too much to find its feet in the position of the market.

Place
As the luxury retailer is established in the UK market it will not struggle to imitate its place.

7.0 Summary
In conclusion Ted Maker should invest heavily in the Chinese markets because of its unmissable advantages and its ever increasing wealth and advantages. Even though the Yen is very weak and forced by the government this does not mean it will stay like that. The market for luxury goods is still very healthy everywhere in the world. The fashion brands are powerful and do not need heavy marketing which can save vast amount of money.

8.0 References
. “Succeeding in China’s Multi-Layered Consumer Products Market”, L.E.K, VOLUME IX, ISSUE 2

“Value-Based Segmentationof Luxury ConsumptionBehavior”, Klaus-Peter Wiedmann, Nadine Hennigs, and Astrid Siebels

Alexander James Nicholls, (2002) "Strategic options in fair trade retailing", International Journal of Retail & Distribution Management, Vol. 30 Iss: 1, pp.6 – 17

Porter, M E (1996). “What is Strategy?” Harvard Business Review, 74(6), November-December, 61-78.

Barreyre, P Y (1988). “The Concept of Impartition Policies: A Different Approach to Vertical Integration Strategies,” Strategic Management, 9(5), September-October, 507-520. Coase, R H (