Group Consulting Project Oroton International Entry and Expansion Strategy in China
Executive Summary
Oroton is an Australian owned company making luxury goods, from bags to clothing. This study first goes through a resource and capabilities analysis for the Oroton Company. We follow this with an external environment analysis and fashion industry analysis in Oroton’s host market, namely, China. In addition, this study is an analysis on their plan to enter the China luxury goods industry, through setup of a Wholly Owned Subsidiary with a view to using a “Focus” and “Differentiation” strategies. Last but not least, the recommendations are provided for Oroton in terms of how the company can enter into China’s market and further develop its international business efficiently.
1.0 Introduction Oroton was founded in 1938 in Sydney and built their success on luxury products with a relaxed style and high quality. Today, Oroton sells a wide range of products, from various clothing to jewellery and accessories such as wallets and even ties and umbrellas.
We selected Oroton due to an interest in whether or not an Australian fashion label would succeed overseas in a market with other larger global brands. As Oroton has already successfully expanded into Hong Kong, Malaysia, New Zealand and Singapore (The OrotonGroup Annual Report, 2012) it makes sense that it would continue its expansion into additional foreign markets to continue this success. China has been chosen as the next market to enter for three key reasons. Firstly, neighbouring to Hong Kong means some of the liability of foreignness will have already been overcome, secondly due to the increased buying power of the emergent middle class and finally because of the strong market growth of the fashion industry. 2.0 Analysis of Orotons Resources and Capabilities The Oroton brand is one of the primary value adding components of the company. This is because of the image that they have built up over the last seventy years of business, and the loyalty that their customers have developed
Oroton is an Australian owned company making luxury goods, from bags to clothing. This study first goes through a resource and capabilities analysis for the Oroton Company. We follow this with an external environment analysis and fashion industry analysis in Oroton’s host market, namely, China. In addition, this study is an analysis on their plan to enter the China luxury goods industry, through setup of a Wholly Owned Subsidiary with a view to using a “Focus” and “Differentiation” strategies. Last but not least, the recommendations are provided for Oroton in terms of how the company can enter into China’s market and further develop its international business efficiently.
1.0 Introduction Oroton was founded in 1938 in Sydney and built their success on luxury products with a relaxed style and high quality. Today, Oroton sells a wide range of products, from various clothing to jewellery and accessories such as wallets and even ties and umbrellas.
We selected Oroton due to an interest in whether or not an Australian fashion label would succeed overseas in a market with other larger global brands. As Oroton has already successfully expanded into Hong Kong, Malaysia, New Zealand and Singapore (The OrotonGroup Annual Report, 2012) it makes sense that it would continue its expansion into additional foreign markets to continue this success. China has been chosen as the next market to enter for three key reasons. Firstly, neighbouring to Hong Kong means some of the liability of foreignness will have already been overcome, secondly due to the increased buying power of the emergent middle class and finally because of the strong market growth of the fashion industry. 2.0 Analysis of Orotons Resources and Capabilities The Oroton brand is one of the primary value adding components of the company. This is because of the image that they have built up over the last seventy years of business, and the loyalty that their customers have developed