Tennis is a taking company in fabric and sweet market, it guarantees high criterions of quality, the best monetary value, design and service.
TennisA reaches it clients through an extended distribution web of 127 shops between owned-companies and franchises in Colombia, Mexico, Venezuela and Ecuador.[ 1 ]
Tennis instead than a trade name is a lifestyle.A Its mark is immature, informal and unsophisticated and happen in tennis a great option for twenty-four hours dressing with apparels that fit clients demands.
Tennis is originated in Medellin, Colombia as an enterprise of two immature business communities in 1976. They started selling some jerseies to some tierces parties in the local market, and so they opened the first Tennis Store in Medellin.[ 2 ]“ Today Tennis is a greater Colombian company that offers non merely a immature manner, but besides an urban, fresh, practical, and comfy one, with sole designs that go manus by manus with the head of the latest inclinations of manner worldwide ” .[ 3 ]
2. SHOULD THE COMPANY EXPAND INTERNATIONALLY?
2.1 Effect on Home Market:
Tennis is a company good known and really good positioned in Colombia, it has many shops and an established market with tonss of gross revenues and good acknowledgment into the Colombian market ; they expanded their mark successfully and positioned the trade name as one of the best Colombian comfiting company.
Now yearss they coverage the demand in Colombia, they have the sufficient capacity of production and shops to provide ( they perchance open more shops in new promenades to positioned the trade name ) the local demand that is why we think that opening other shops overseas could hold some positive consequences.
The local demand wo n’t be affected and they can spread out their demand. As we know they besides have some shops in Mexico, Venezuela and Ecuador that ‘s why we think: why non Peru? And we realize that Peru right now is an attractive market for Tennis because really in this globalized universe Colombia and Peru, both, have really similar manner inclinations.
2.2 CompetitorsA? Activities:
The chief rivals that Tennis could happen in Peru are: Fashion line, Fuci Coleccion S.A. and Industrial Condor that are the leaders in the sweet market over at that place they have the major engagement on the market but the company really is in the capacity to vie with them because they compete with manner quality and monetary value and they are Tennis strengths.[ 4 ]
2.3 CustomersA? Needs:
The clients ‘ demands in Peru are really closely to Colombian 1s because in a globalized universe the inclinations between the parts are really aligned, besides if you take a expression both states have similar manners.
Tennis besides offers inexpensive merchandises if you compare it with similar trade names like Chevignon, Americanino or Diesel.
Tennis has a broad measure of merchandises that facilitates the penchant of the people for the trade name. In this manner the company could be attractive to many Peruvians because they can happen in Tennis a inexpensive option but besides a good one based on their urban, fresh and modern designs.
2.4 Potential Markets:
The possible market for Tennis in Peru is its capital, Lima. It have about 8.5 million of dwellers, is the biggest and crowded metropolis in the state.[ 5 ]
If we review the mark of the company: “ Tennis S.A. is focused on childs, immature people and grownups who portion common life manner and spread the same autonomy, dynamism, freshness, energy and creativeness as discriminators within their attitude. These same features are the 1s transmitted by our trade name within the designs of our garments and by the shopping experience held within our shops, accomplishing with these attempts a personification of a life manner around a trade name itself. ”[ 6 ]We can recognize that the company will happen over at that place some costumiers because it is a really large metropolis with excessively much people that can be converted in possible purchasers of their apparels based in their Modern but urban designs and the monetary values.
2.5 Potential Suppliers:
Colombia and Peru are really closely, that is why the best manner to come in Peru will be exporting the finished merchandises over at that place, because the labour in the states is really similar in footings of monetary value and quality.
By other side traveling the ware from Medellin to Lima will non be excessively expensive. In this manner Tennis will non necessitate to much direct providers in Peru.
2.6 Cost Derived functions:
The difference of the cost between a jersey on Peru and one in Colombia could be shortly because the transit cost are low and as a member of the Andean treaty Tennis will be favored with low or non responsibilities depending on the sort of merchandise.
3. IS THE COMPANY CAPABLE OF EXPANDING INTERNATIONALLY?
* Competitive Advantage:
Tennis is a good known vesture store with an highly of import competitory advantage ; it produces high quality apparels, places, bags and make-up with designs that attract all sorts of public and at really low-cost monetary values. It is focus on the creative activity of a different and particular merchandise, where every item is indispensable.
For that Tennis had positioned non merely a alone immature manner but besides an urban, fresh, practical and comfy 1 with sole designs that go manus by manus with the head of the latest inclinations of manner universe broad.
A hard point to retroflex from Tennis is the high quality garments combined with its manner lifestyle designs ; knit fabric and anils are cardinal pieces of its portfolio and they use infinitive textures, ever seeking for positive experience with touch.
Nowadays Tennis has became into a sustainable company national and international that franchises are recognized as a successful concern chance because of it production processes quality, monetary values and experience.
Tennis to transcend the competition altering its aggregation each month and they are merchandises that do non hold repositing, that manner are invariably in manner inclinations and avoid the transcript of its merchandises.
Its competitory advantage is one of the keys for the success of this trade name.
Tennis does non merely designs and sells apparels and other merchandises but besides designs the infinites where these merchandises will be sold so the client has a complete experience.
The internationalisation scheme used by tennis is the yesteryear has been franchising. They like to open new shops in different topographic points and conquer other states utilizing franchises.
Since Tennis uses franchises to work they have some direction over the shops no affair where they are, but it is easier than merely opening shops and pull offing them all together 100 % .
3.2 Fiscal Resources:
Tennis fundss their production, selling programs and growing by selling its merchandises and by the payments obtained by the franchises.
Tennis produces and sells apparels, places, bags, accoutrements, make-up, rudimentss and leisure. All this merchandises have an first-class quality and a really moderate monetary value.
Basicss: “ Merchandises of high rotary motion with a basic considered silhouette. The lone thing that changes in each aggregation is the mention colour card, which is inspired by the colourss of the season ” .[ 7 ]
Leisure: “ They are dressing designed for remainder and relax: underwear, pyjama, perspiration bloomerss, jerseies, trunkss, among others ” .[ 8 ]
Accessories: This class is comprised by accoutrements, bags, belts, scarves and chapeaus.[ 9 ]
The selling of the company is based in the life style that tennis wants to reflect in their clients.
“ Liberty, dynamism, freshness, energy and creativeness ”[ 10 ]
Tennis has ever been characterized by the presentation of its window shows, ever seeking to stand for the life style that wants to reflect as we said before.
It is a truly good selling scheme in order to catch the customersA? attending in promenades and shopping centres.
Tennis has a selling program to advance its merchandises that consists in gross revenues, circulars, etc. For illustration: The grosss from the December shopping, in any tennis shop can be used as a fillip for any new merchandises purchased in January.
Besides tennis has a web page where clients can be inform about the new aggregations and general information about the company.
Tennis produces all of its merchandises with its ain equipment, their mills can manage all the demand from the clients and as they grow the figure of shops they invest in turning the production line.
4. HOW ATTRACTIVE IS THE LOCATION?
Peru has a population of about 29 million people, the chief linguistic communication is Spanish and it is a representative democratic democracy divided into 25 parts. It has 1.285.215, 60 kmA? doing it a non so small state.
4.2 Per Capita Income:
The per capita income of Peru is figure 79 in the word with an income of $ 1,869.56 USD per individual, it is a beginning of both natural gas and crude oil and its economic system is based on Manufacturing and agribusiness largely.
4.3 Income Distribution:
The distribution of Peru ‘s income can be divided in:
Manufacturing ( 15.5 % of GDP )
Agriculture ( 7.6 % of GDP )
Servicess ( 55.1 % of GDP ) ,
Mining ( 5.7 % of GDP )
Construction ( 5.9 % of GDP )
Fisheries ( 0.5 % of GDP )
and others ( 9.7 % of GDP ) .
The major export markets of Peru are the U.S. ( 18.6 % ) , China ( 12.0 % ) , Switzerland ( 10.9 % ) , Canada ( 6.3 % ) , Japan ( 5.9 % ) , Chile ( 5.9 % ) , Venezuela ( 3.5 % ) , Germany ( 3.3 % ) and others.
The Republic of Peru is located in South America in the West corner. This state portions boundary lines with the Pacific Ocean and five states ( Ecuador, Colombia, Brazil, Chile and Bolivia ) .
The web of ports on the Peruvian seashore is composed of 14 ports along its seashore, Callao is the most of import port of the state and certainly the most indicate for us because it is located in the cardinal Peruvian seashore in the Pacific Basin to which the inter-oceanic path entree across the Panama Canal.
The port of Callao is located in the Constitutional Province of Callao, 15 kilometer from the capital, Lima.
Peruvian ports are under the direction of the National Port Company S.A A.A ( ENAPU PERU ) , a decentralised entity of the Ministery of Transport and Communications of Peru.[ 11 ]
In Peru, the chief airdrome is the International airdrome Jorge Chavez ; it is located in Lima and is considered one of the most of import airdrome of South America because for its location it has become into the hub of the international connexions[ 12 ].
It is of import return into history the International airdrome Jorge Chavez as mean of handiness ; from Bogota there are direct flights to Lima[ 13 ].
For all this grounds it is easy to entree particularly from Colombia because non merely we portion a boundary line, but besides, we have coast on the same ocean.
4.5 Degrees of Competition:
Since Peru has ne’er developed a strong fabrication sector the competition tennis will hold are international trade names that have conquered this new market.
Tennis has experience viing with these trade names giving it certain security.
4.6 Cultural Aspects:
The “ Peru facts a usher to Peru ” says on its web site that “ The civilization of Peru is by far one of the most diverse in South America ” .
This quality of the Peruvians is really of import to take into history when come ining a new market. Peru has an influence from both the Incas and Spanish.
Harmonizing with the cultural dimensions of Hofstede the Peruvian society is Collectivist ( the dimension of individuality IDV is really low ) , this is manifest in a close long-run committedness to the member ‘group ‘ , be that a household, extended household, or extended relationships.
The society Fosters strong relationships where everyone takes duty for fellow members of their group[ 14 ].
This is a factor truly of import to take into history because this Bolshevism can act upon the customersA? purchasing determination brand, due to the fact that the client determination would be more as a group than as single ; nevertheless Colombia is really similar culturally with Peru so it wonA?t be hard for tennis to manage this sort of cultural facets.
4.7 Resource costs:
The resource cost could be similar to Colombian monetary values due to the fact that Peru is a member of Mercosur alongside Colombia. The minimal pay in Peru is $ 156 USD while in Colombia is $ 250 USD. Therefore perchance take downing cost even more.
4.8 Available Skills:
Since the finished merchandises will be sent to Peru from Colombia, the experience needed for the workers will non be excessively demanding merely people who can go to the clients at the shops and directors for each one.
Some inducements are the turning of the company, the enlargement through South America, low involvements, and it could better Colombian ‘s trade dependence.
5. HOW RISKY IS THE SITUATION?
5.1 Economic Stability:
After failed purposes to administer income every bit through agricultural reform, Peru ‘s economic system was liberalized in the early 1990 ‘s. Since so, the state has experienced important economic growing and presently is considered an emerging market. Servicess make up over half of the Peruvian GDP, lending to the stableness.
However, one negative facet is that it is trade dependent on its chief commercial spouse ; the United States, China, Brazil and Chile.
Poverty has continually declined over the past few old ages while the per capita income has risen to about $ 10.000 USD. It is presently the 45th largest economic system n the universe.
5.2 Political Stability:
Peru will hold presidential elections on April 2011 which gives a small instability to the political relations in the state. When a state changes president and other authorities representatives could be unsafe to put because it is impossible to cognize what is traveling to go on, what policies could be changed or what sort of president could be elected.
Terrorism is a existent and uninterrupted menace in Peru. The “ Sendero Luminoso ” is one of the most barbarous and destructive terrorist organisations worldwide. In the metropolis, they have been known to topographic point auto bombs in busy topographic points. However, the bulk of the onslaughts take topographic point in the jungle far from populated parts. The chief concern lies in the evident revival due to its increasing financess from cocaine gross revenues.
5.4 Trade Barriers or Opportunities:
Peru has a free trade understanding with the United States and it is involved in the Mercosur, the Latin American Free Trade Act ( LAFTA ) and the World Trade Organization ( WTO ) .
Peru promotes international dealingss and concern giving chances to companies to come in and to spread out. Because trade is really Important for this state It has comparatively low barriers, this barriers varies depend on the merchandise.
5.5 Government / Business Relations:
Peru has good concern dealingss with many states, in the instance of Colombia, drug maltreatments and traffic have been a job between the two states but the relation is in good footings. The authorities is a constitutional democracy and its existent president is Alan Garcia Perez since the 28 de July 2006.
6. HOW Much INVOLMENT IS DESIREBLE?
* Trade-off between attraction and hazard.
Peru is a state that has grown in the last old ages and is traveling keep turning. It is one of the states of Latin America that are convinced that it is necessary to go oning with the advancement and is holding success in accomplishing it.A
Nowadays Peru keeps a big economic and political stableness and although there are some concerns about the following presidential elections has been demonstrated that authoritiess try to prolong a serious and responsible economic direction[ 15 ].
The relation between Colombian – Peru authoritiess is good what makes easier to consolidate a commercial activity over at that place, besides, Peru ‘s embassy is available to any enterpriser who wants or requires some sort of support encouraged to travel to Peru and the Mercosur is truly helpful in order to ease trade and cut down trade barriers.
One advantage is how similar are Colombians to Peruvians leting tennis to come in to the market with a similar selling scheme. It besides facilitates the cross- cultural differences direction that in some instances can stand for a large challenge when we talk about internationalisation.
Besides there are easy handiness trough ports and airdromes doing costs profitable and the provision procedure easier.
The terrorist act likely is non every bit worrying as the Colombian one ; it is a factor that can be handled.
Surely there is an international environment that allows tennis to affect softly and easy, nevertheless, although the company has the capablenesss to internationalise ; it is a determination that have take into history the economic capacity of the company and the different points of position of its members and directors.
7. WHAT Specific FOREING OPERATIONS METHOD IS APPROPIATE FOR THE SELECTED COMPANY?
The appropriate method for Tennis to suppress the Peruvian market would be FRANCHISING, the ground for taking this method is the cognition and experience. Tennis has used this method in every spread outing procedure and it has proven effectual for them. Taking into history that franchising has been successful in many civilizations in South America, and that Peru belongs to the same country it could be good to keep the same method.
Besides, Franchising are safer and minimise the hazard of any investor ; harmonizing to Kiser the rate of “ mortality ” of a franchise is really low.
“ He explained that a survey by the Department of Commerce U.S. worldwide found that 90 per centum of concerns that are born as a franchise overcome the 5th twelvemonth of life, while merely 60 per centum of new concerns or go through the barrier ” .[ 16 ]
Deserving adverting that franchising is more executable to spread out faster and lower costs relative to other FOM.[ 17 ]
8. CONCLUSIONS AND RECOMMENDATIONS
Decidedly Peru is a recommended state for international enlargement and tennis should travel in front with the undertaking taking into history that is a company with an first-class competitory advantage and great capablenesss in order to internationalise.
Harmonizing to the undertaking there are a batch of factors that favor the internationalisation in Peru, the four most of import:
The economic and political stableness.
The chance of the installation in trade ( few trade barriers, commercial pacts and good authorities dealingss ) .
Easy handiness trough ports and airdromes.
Similar cultural facets.
Franchising gives tennis installations to afford the challenges that arise when venture in international operations taking into history that tennis has the cognition and experience required and cut down costs comparing with others FOM.
We recommended to be cognizant about competitions because although Peru has ne’er developed a strong fabrication sector, Peru has Latin America`s lowest fabric industry labour costs[ 18 ]. It is necessary to analyse deeply ( financier analysis with estimated costs ) if it better to bring forth in Peru alternatively Colombia.
9. BIBLIOGRAPHY AND SOURCES
hypertext transfer protocol: //www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-income-per-capita
hypertext transfer protocol: //www.traveldocs.com/pe/economy.htm
hypertext transfer protocol: //www.nationsencyclopedia.com/economies/Americas/Peru.html
hypertext transfer protocol: //www.jne.gob.pe/
hypertext transfer protocol: //internationalbusiness.wikia.com/wiki/Peru % 27s_trade_barriers_Strengths/Weaknesses
hypertext transfer protocol: //www.infoplease.com/ipa/A0107883.html
hypertext transfer protocol: //www.proexport.gov.co/vbecontent/NewsDetail.asp? ID=1226 & A ; IDCompany=16
hypertext transfer protocol: //www.peru.com/peruinfo/