Today, every business is involved in massive expansion strategies and investment processes to ensure presence in almost every part in the world. The fashion industry, just like other businesses, has joined such a move to increase business presence, turnover and eventually profits. Dolce & Gabbana is one such fashion company that is looking to expand its operations in the world stage. This Italian company was formed about 30 years ago by two friends Domenico Dolce and Stefano Gabbana when they worked in the same designer consulting studio in Sicily Italy. Since presenting the first female collection in 1985, the company has grown into a large corporation with presence in more than fifty countries. By the year 2010, the company turnover had exceeded $ 800 million and was set to increase over the next few years . Just like any other business, several factors affects its decision making process both at the international stage and the domestic market. This research evaluates the environmental factors that affect such decision making process and in particular the marketing strategies.
Global Economic Interdependence
There is a monumental migration of businesses and companies involved in manufacturing and financial services towards the East of the globe. Today China and other Asian emerging ‘tiger’ economies have provided good grounds for doing business. This means that these big corporations have the advantage of producing products at a mass scale at a very lucrative low labor and energy costs . Additionally, telecommunication and internet connectivity provides the required infrastructure to facilitate connectivity. It will be detrimental for any investment corporation to overlook these new markets.
However, such globalization of businesses means that economies are heavily interconnected and interdependent. For instance, the Chinese economy and its operations have a big influence on the American economy as depicted by the recent devaluation of the Chinese currency by the government . Another instance is the Euro Zone poor financial results that have been reported in the past few months and has been proven to have an international ramification. In this state of economic interdependence, different economies have vast influences in other economies. Dolce & Gabbana understands these factors very well and thus ensures business presence in these markets to maximize and mitigate such variations.
While such global investments present vast opportunity for doing business, it creates aggressive competition between big corporations and the small firms that they find in the new frontier. Local companies understand their markets better as compared to new incoming global companies. Thus companies such as Dolce & Gabbana have to understand local markets before defining their marketing strategy .
Influence of Cultural
The term culture is somewhat a multifaceted characteristic of a people that is rather difficult to define in simple terms. Social scientists have developed several definitions of the term culture however, the simplest definition terms culture as a combination of accepted character among the people living within a community. In general, every community has an accepted character defined by personal perceptions, attitudes, motivation, background, social class and personality . The result such shared values is sought of a collective programming of the minds of the people within a society. According to Schmid, (2011), this influence of culture has a big bearing in the consumer behavior. Consumer behavior is one of the greatest determinants of consumption models in several economies. Dolce & Gabbana is a fashion house with several fashion products that may have different impacts on different cultures. Thus Dolce& Gabbana may take a varied marketing strategy with regard to each market.
Demographics and Physical Infrastructure
Demographic of a country is defined as the population distribution that is exhibited by a country. Every nation has different demographics with respect to the age, gender and economic status of a population. The United States for instance has a middle class is the most of the population and is the main driver of the economy. Similarly, the Chinese population has a comparable population distribution .
The impact of a mushrooming middle class in a population has a significant effect on the country’s economy. As the middle class population continues to increase in numbers, the consumption of luxury goods is set to rise. For instance the middles class Chinese population started to purchase goods such as cars, computers, pianos and other luxury goods. The positive and consistent growth of the population provides some sought of social safety. This social safety moves the population from a saving society to a spending one. This new wave of spending is giving middle class populations a gives new feeling of self-worth and such population begins to spend on luxury goods. Self-esteem among the middle class population has considerably changed. Today economies such as China, presents a lucrative market for luxury goods such as designers cloths, ornaments and rare metals. Dolce& Gabbana understand this fact very well and since invested in Asian emerging economies composed of strong middle class demographics. To this Dolce& Gabbana has also devoted its resources to aggressive marketing strategies in these investment frontiers.
Effects of Political Systems and the Influences of International Relations
Businesses operate from countries that are inherently political entities. For this reason, there will always exist challenges and conditions that businesses face due to this political definitions. Dolce & Gabbana is a fashion house that is looking to invest in several countries and to do this the company has to consider the political influences. Dolce & Gabbana is viewed as western company with western ideals. To invest in ‘anti-western’ nations, such as Arabic countries, political influences come to the play.
The Foreign Corrupt Practices Act of 1977
The United States government has developed legislation that guide the investment sector with regard to transparency in business operations. One of such legislation is the Foreign Corrupt Act of 1977. The law has two primary providing for foreign businesses seeking to invest in the United States. The first provision addresses accountancy and transparency in business operation. The second provision concerns bribery of foreign officials. The Act simply prohibits any corrupt dealing in business with foreign officials and businesses. Thus businesses must adhere with transparent dealings both on foreign investments and domestic expansion endeavors.
Today the world can be termed as a technology driven universe. Every other day there is a new technology of doing business. A continually evolving technology means that business processes are been faced out and new means that are more efficient continually developed. Information technology (IT) is the leading sector in terms of technological changes. Dolce & Gabbana understand this fact and has employed marketing strategies that use the latest technologies. The internet and digital information communication systems have been used in the marketing strategy employed by the company.
Dolce & Gabbana is emerging as a major in the fashion industry. This success has been attributed to proper marketing strategies employed by the company that uses technology to foster aggressive marketing methods. Today, Dolce & Gabbana has invested several countries and is in tandem with globalization ideals that have gripped the business fraternity.
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