Essay on Analyse and evaluate Arcadia’s existing resource base, networks and relationships
Today, the apparel industry is vulnerable to consistent changes as the production facilities move from well-developed to developing countries. For instance, many renowned brands operating in Europe, the US and other well-developed countries shifted their production facilities to China, India and other countries, where the labour force is cheaper compared to develop countries as well as manufacturing facilities are located closer to suppliers. In this regard, the process of globalization facilitates the development of business internationally and many apparel companies based in well-developed countries tend to shift their production facilities to developing countries. In such a context, Arcadia Group Ltd., being one of the largest apparel companies of the UK, may consider the possibility of its business expansion internationally and focus on the Indian market specifically, where the company can develop its affiliates expanding its business to India. However, the company should consider carefully the potential of the local apparel industry and market and assess adequately its resources and potential to enter the Indian apparel market and industry successfully. Obviously, entering the Indian apparel market and industry opens new prospects in face of Arcadia Group Ltd. but, on the other hand, the company should come prepared to cope with possible challenges that may emerge as the company enters the Indian market and develops its business there.
II Arcadia’s Resource Base
1 Arcadia’s resource base, including both tangible and intangible resources
The company operates internationally. Arcadia Group Ltd. has an extensive experience of operations in the apparel retail, being one of the leaders in the UK apparel retain industry. At the same time, the company has to keep progressing to hold a leading position not only in the UK market but also internationally. International operations provide the company with a solid ground for the further market expansion. As the company operates internationally, Arcadia Group Ltd. can use its human resources and experience to enter new markets successfully.
The company has its high street stores in Europe, the UK, and some other countries at the moment. The company used the strategy of acquisitions to expand its business fast, especially in the 1990s. The company has extensive network in the UK and Europe but Arcadia Group Ltd. lacks stores outside the European market. Therefore, the company’s position outside Europe is relatively weak. In such a context, entering the Indian can allow Arcadia Group Ltd. to make a breakthrough in its business development and expand its business not only to India but also other countries. In this regard, the experience of developing business in Europe can be very helpful for the company.
However, the company is Europe-oriented mainly. In fact, the orientation of the company on the European market can raise the problem of the effective adaptation of the company to the non-European business environment. In this regard, the process of globalization and elimination of economic and cultural barriers between countries can facilitate the penetration of Arcadia Group Ltd. into new markets, such as the Indian one.
In addition, the company has experienced and well-qualified human resources. In the contemporary business environment, human resources play an extremely important part. For instance, Arcadia Group Ltd. focuses on innovations and it is human resources that generate innovations. Therefore, experienced and well-qualified human resources can generate new ideas, introduce innovations and contribute to the fast business development of Arcadia Group Ltd., but the company should take into consideration specificities of its target markets (Chenhall, 2003). For instance, Indian market is different from the UK market and local employees are different British employees.
Arcadia Group Ltd. has international network, although the company lacks experience of developing its business in India and Asia. The company can extrapolate its experience of business development on Asia but still the company needs to adapt to specificities of the Indian apparel market. Otherwise, the company will fail to enter the Indian market successfully.
At the same time, the company has suppliers from Asia. Asians suppliers can facilitate the penetration of the Indian market because the company can save on transportation and delivery of its products to customers. Moreover, Asian suppliers are closer to Indian customers in terms of mentality that will facilitate the adaptation of Arcadia Group Ltd. to local customers’ needs.
Brands of the company are intangible resources, which can also contribute to the successful business development in India. In actuality, brands of Arcadia Group Ltd. are renowned internationally. Even if Arcadia Group Ltd’s brands are relatively new for India but their reputation at the international level can facilitate the process of entering the Indian apparel market consistently (Dutt, 2001). Today, brands play an important part in business development and comprise important marketing assets of any company, especially in the apparel industry. The attitude of Indian consumers to British products is traditionally superior, for they believe that products of British companies are of the higher quality and more trendy compared to local products.
The operation of Arcadia Group Ltd. in the high street retail industry allows the company to enter the premium segment of the Indian market. The premium segment market is less vulnerable to the negative impact of the economic crisis. The company can offer customers exclusive products and, thus, gain a strong position in India.
2 Arcadia’s overall (horizontal and vertical) business network
The company has well-developed horizontal and vertical business networks but the company has to develop the new network in India, where Arcadia Group Ltd. has not operated before. Arcadia Group Ltd. has little experience of operation in Asia and India, although the company has suppliers in Asia. The company can use experience of its collaboration with Asian suppliers in India.
In fact, the company can find suppliers in India that will help the company to adapt to needs and expectations of local customers. Local suppliers can match better needs of local customers because they know them better. On the other hand, the company should supply its exclusive products too to show the uniqueness and different of the company’s products from those of rivals.
At the horizontal level, the company should provide Indian affiliates with larger autonomy to adapt to the local market and to respond fast to changes in the local business environment. The company has to develop its horizontal network in India. The cooperation with a local retailer can facilitate the business development of Arcadia Group Ltd. in India and this cooperation will meet the acquisition strategy conducted by the company since the 1990s. The collaboration with a local retailer allows the company to expand its network in India fast.
3 Arcadia’s vertical (supply network) collaboration
Arcadia Group Ltd. can use local suppliers. In such a way, the company will save costs on the delivery of its products. Saving costs will provide the company with financial resources to invest in its business development in India. In addition, saving costs on using local suppliers will allow Arcadia Group Ltd. to conduct flexible pricing policy and to set competitive prices (Hart, 2004). The company can attract other suppliers from Asian countries that will decrease costs and, therefore, prices of products sold by Arcadia Group Ltd. in India. The latter will make products more affordable to Indian consumers.
The company should adapt to the local market and consumer habits, but also the company should preserve its orientation on the premium segment market and its uniqueness. The uniqueness of the company’s product are crucial for the business success of Arcadia Group Ltd. in India as well as other markets.
4 Arcadia’s horizontal collaboration
The horizontal collaboration will focus on the close cooperation between the UK headquarter and Indian affiliates. The collaboration may be effective due to the development of effective communication grounded on the use of modern telecommunication systems, which can maintain permanent communication between headquarter in the UK and affiliates in India.
The company can appoint top executives from the UK departments of the company and train local professionals in the UK. In such a way, the company will be able to integrate its Indian affiliates fast. But Arcadia Group Ltd. should avoid cultural conflicts that may emerge between British managers and Indian employees. The appointed managers should be able to prevent conflicts with local employees. They should come prepared to cultural differences and the different management style Indian employees are accustomed to.
III The Indian apparel market and industry
1 India’s position in the Asian and global apparel market and industry
The Indian apparel market and industry are growing fast. The growth was particularly significant in the late-1990s – early 2000s but, in spite of certain slowdown in the late 2000s, the market keeps growing. Today, the Indian market tends to increase its share in the Asian and global markets (Peters, 2007). The Indian market has a considerable potential for the further growth due to the availability of resources and suppliers.
The Indian domestic market has a considerable potential to become one of the largest in the world, although, at the moment, the Indian market remains under-developed because of the economic backwardness of the country. However, as the Indian economy grows, the apparel market grows too, opening larger opportunities for such companies as Arcadia Group Ltd. to enter the Indian market. The apparel industry comprises an important branch of the Indian economy, while many foreign companies from Europe, the US and other well-developed countries attempt to develop their business in India, where they can save costs of the labour force, resources, and others.
The Indian economy tends to the wide implementation of the open-market principles that facilitate the development of business in this country. At the same time, the integration of the Indian economy in the global market facilitates the penetration of such companies as Arcadia Group Ltd. to the local market. The globalization and the use of open-market principles contribute to the fair competition and such companies as Arcadia Group Ltd. can develop their business successfully. In this regard, the local government is interested in foreign direct investments (Gwynn, 2004). Therefore, the local government is interested in foreign investors, such as Arcadia Group Ltd. because they create new jobs in India and stimulate the economic growth of the country.
2 Supply and distribution networks of the Indian apparel market and industry
India has a considerable potential due to a considerable growth in the apparel industry. The cheap labour force, available resources and well-developed apparel industry make India attractive market for leading retailers, such as Arcadia Group Ltd. The apparel market and industry of India keep growing and the grow is likely to carry on in the future.
However, the distribution network is relatively under-developed. Such companies as Arcadia Group Ltd. can use its experience and organizational structure to develop distribution networks in India that can accelerate the development of the Indian apparel industry and market (Royse, 2006). Therefore, the local government and foreign investors, such as Arcadia Group Ltd., are interested in each other because, on the one hand, the government attracts investments and stimulates the economic growth in India, while, on the other hand, investors develop their business and expand their markets.
3 Consumer behaviour and attitudes in the Indian apparel market
In the past, consumers were oriented on traditional Indian apparel products. However, by the late 20th century, under the impact of globalization and growing cultural influence of the western civilization, the Indian apparel market and industry tend to follow the lead of western companies. Therefore, western clothes become popular in India, especially in the premium segment of the apparel market (Littlejohn, 2002). Such a shift in customers’ preferences is beneficial for western companies, such as Arcadia Group Ltd. because they can use the change in the customer behaviour to offer their traditional products and enter the Indian market successfully. On the other hand, they still have to adapt to the local market and customers’ needs and expectations, which are still different from those of European customers, for instance.
4 Cultural and language issues affecting B2B collaboration and communications
At this point, cultural differences between India and the UK are particularly important for such companies as Arcadia Group Ltd. In fact, cultural differences between India and the UK are very significant and, therefore, they may interfere in B2B collaboration and communication (Bowman, 1994). The difference in management style and business relations may affect the collaboration between the UK companies, for instance, Arcadia Group Ltd., and Indian companies. For instance, the UK companies are accustomed to written agreements, while Indian companies may use oral agreements extensively.
However, Arcadia Group Ltd. and other British companies as well as companies from English-speaking countries can close communication gaps because English is the official of India that facilitates B2B communication. In such a way, there will not be substantial linguistic barriers on the way of the UK companies in the Indian apparel market.
IV Conclusion
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that Arcadia Group Ltd. has large opportunities for successful entering the Indian apparel market. The company should use its strengths and enter the Indian market, which has a considerable potential. The apparel industry is growing in India. Therefore, Arcadia Group Ltd. can take the lead in the Indina apparel market focusing on the premium segment of the market and developing its business involving not only managers transferred from the UK but also local employees.
