12. THE CHALLENGES OF SELF RIDGES TO DIVERSIFY AND OPPORTUNITIES OF GROWTH

EXECUTIVE SUMMARY

Lowe and Doole (2008), Companies use a variety of sources to frame the MIS (Marketing Information System). UK Trade and Investment (UKTI) supports various organizations to grow overseas and export. There are many government-supported organizations in Western countries that support exports and develop information on international trade. Some reports are insufficient about market information, and firms are unable to use them purposefully. The criticisms are

• Information is not relevant to industry.
• Bureaucratic governments and companies face problems with them.
• Inappropriate data for the company’s needs or too general information
• Services are available in the capital city.
• Inadequate publicity

INTRODUCTION

Selfridges & Co. is a high-end consumer department store in the UK. They are planning to set up their store in Morocco, India, and Egypt. These 3 countries have been analyzed critically based on the 12C Framework to check their suitability for opening a department store. From various sources, it was discovered that Morocco Mall is the largest mall in Africa with a huge aquarium inside the mall. There are 40 different species of fish there, and visitors can take a 360-degree view of sea life.

12C Framework Analysis of Selfridges in India

From recent statistical data, it was found that India is the third largest country in terms of purchasing power parity. It is one of the fastest-growing major economies and is considered a newly industrialized country. It has various challenges like poverty, corruption, education, malnutrition, inadequate public services, terrorism, and so on. By and large, India is developing technologically in comparison to other countries.

Apte and Vaidyanathan (Indian Economic Review, Vol. XVII) explained that market concentration has a major influence on profit. More concentrated industries show higher profits. Joshi and Gupta (2012) state that consumer behavior changes with culture in India. Culture dominates knowledge, beliefs, laws, morals, customs, capabilities, and habits. Layman entails that India has low costs, skilled human resources, and enormous demand for national manufacturing goods. India has the fastest-growing, efficient, and quality-based industries.

They have achieved major strength from outsourcing services, especially in IT. The weaknesses are that India has too many political parties and trade unions; poor infrastructure and cost-cutting on goods, making them cheap in the market; time delays; poor working conditions; low wages; high corruption; and so on. Can et al. (2009) cited that the main energy products used in India are electricity, oil, coal, biomass, and gas.

Electricity consumption is high in the residential and commercial sectors. The transport sector has high growth in sales of personal vehicles. Doing business in India has rights and regulations that must be maintained. Insurance covers both the public and private sectors. E-commerce laws are developing. Otherwise, there are many legal obligations in sole proprietorship, partnership, limited liability, and joint ventures. In India, imports are controlled by the government. By and large, import restrictions are more on consumer goods than producer goods. Indian industries are heavily dependent on international exports.

India’s economy is centered on agriculture. Farmers directly market their graded crops to wholesalers based on consumers’ preferences. Agro-marketing has been made easier by technology thanks to databases, portals, and webpages. High investment and entrepreneurial skills are required for building market infrastructure. There are many private investors who are backed up by incentive packages for providing infrastructure to remote rural areas with the help of the public sector.

Communication is a booming market, with facilities for landlines, mobiles, and the internet. There are numerous service providers offering low-cost communication facilities to the general public. Individuals, companies, and organizations must pay taxes yearly on all goods and services. The banks are improvising several measures to shorten the documentation procedures to enable the easy exchange of foreign products. It has increased the equivocation limits of citizens, people, firms, and companies based on simple statements without many credentials. Factors to beware of are stress, diabetes, health issues, women and child trafficking, moral issues, etc.

12C Framework analysis of Selfridges in Egypt

highlights that Egypt’s agricultural activities are centered along the banks of the Nile and on the river’s estuary. The deserts conquer most of the nation. The country is dependent on farming, holiday business, and cash payments from Egyptians working around the globe, primarily in Saudi Arabia and the Gulf countries. Arabic is the official language, but English and French are extensively spoken there as well. Islam is the dominant religion in the country; more than 94% of the population is Muslim, with other minor religions there. Cairo is the capital and largest city in the country.

Nevertheless, the rapid growth of the population and scarce arable land have restrained the country’s resources. Ongoing political turmoil has destroyed the government systems. Dr. Mahmoud Elgarf explained that the Egyptian stone industry has shifted from a labor-intensive to a capital-intensive industry with technological progression. They have motivated themselves through capacity-building and export strategies. Egypt has dynamic business opportunities and a strategic geographic location, but it faces high-cost technological imports as well as competition from regional and global players. Egypt is excessively dependent on energy resources, with a focus on oil, gas, coal, and power markets. Reham and Ebrahim (2010) studied how consumers’ preferences change with time, updated, and changed with experience and situation.

It emphasized that export-oriented firms get certain sales tax exemptions and custom duty benefits. Egypt offers protection and incentives to all companies setting up. The new legal obligations allow Egyptians full ownership of foreign companies, full foreign representation on the board of directors, enjoying full profit and dividend return in any currency, protection against expropriation, protection against double taxation through international treaties, protection against forced pricing, and full money transfer policies. The government provides support to companies to get their incentives, work permits, customs clearance, and technical approvals. The Dr. Hussein Amin, 2002, promotional campaign supports tourism. Egypt has been the leader in media, politics, and culture. It has free print and broadcast media.

Private importers have huge black money to earn overseas exchange. Economic instability includes price increases and political unrest. The central bank has abandoned various policies of freely convertible currency. Banks limited their approval of imports of essential goods and supplies deemed critical for industry. Caveats are: huge population, excessive heat, political turmoil, genocide, etc.

12C Framework Analysis of Selfridges in Morocco

Morocco has a rich cultural mixture of Arabs, Berbers, Europeans, and Africans. Morocco was a French colony from 1912 to 1956. Morocco has been designated as a non-NATO ally by Washington for its assistance during the US war on terrorism. The young urban crowd has increased demand for modern retail, households, money savings, eating and drinking, grooming and fashion, health and wellness, shopping habits, leisure and recreational activities, going for holidays, and so on. Low-income rural people maintain their drive for conventional products and services. reports that the government is strengthening the social services within Morocco: crisis management, women’s empowerment programs, cultural activities, social aid to impoverished families, and prisoners.

According to Consumer Profile (2014), the shopping methods of middle-class families and low-income families are particularly different. Numerous low-income families do not earn a monthly income and live on a day-to-day earning basis. So they shop every day, but in small amounts. Producers and shop owners have created one-person shampoo packs and are selling rice and pasta by weight. In contrast, middle-class families have disposable income but less time for themselves.

They usually shop weekly, especially on weekends. The rural masses visit souks or bazaars for food and non-food items. According to the report, the government identified and met the needs of people living abroad and has established improved communication and information services in the country. Both print and broadcast media have strengthened in the country.

Doing Business in Morocco, 2011 reports Morocco invites investors from both public and private sectors, domestic and overseas. The government has taken strategic initiatives to liberalize the economy in terms of trade and agriculture. The primary sectors include agriculture, livestock farming, and marine fishing. The secondary sector consists of processing, industries, building and public works, mining, and energy sectors. The tertiary sector is composed of tourism, transport and communication, commerce, and other services.

Bank Al-Maghrib (BAM) is the central bank of Morocco. BAM controls the financial sector. The Moroccan bank follows the European banking system. Morocco improved its insurance sector. With the introduction of the US-Moroccan Free Trade Agreement (FTA), a number of US banks and insurance companies are operating in Morocco. The current exchange rate is managed by the government. The local currency is euro-dominated. Morocco is planning to eliminate customs duties in order to create a free trade zone with the European Union. The current political system and people are very conservative.

Market Entry Strategies

After analyzing the 12C framework in Morocco, it was advised that Selfridges has good market opportunities in Morocco as compared to India and Egypt. India and Egypt are both developing countries with low GDP (gross domestic product) and lower per capita income. An entry strategy could be planned after considering the 12C framework of Morocco.

Tielman (2010) stated that companies have different strategies to enter international markets, adapt to foreign markets, and find channels of distribution. Companies should align their strategies to adapt to the market environment. The reasons for going international are varied. One key reason is the discovery of a promising future market, which motivates companies to explore new opportunities. Growth prospects also encourage companies to expand into new markets.

Additionally, economic factors such as inflation, rising production costs, political changes, and legal adjustments can push companies to seek opportunities abroad. Also, growing competition, risk-taking, and diversification of markets add to it. Proactive reasons include anticipating future change, strategic advantage, power and prestige, rising labor costs, energy costs, and raw material costs, all of which assist the firm in expanding.

Akhssasi (2014) found that there are a number of factors that determine market entry strategies: location, cost, cultural aspects, financial strategy, competitive advantage, internal structures, etc. A firm needs to enter a new market strategically, requiring financial and managerial resources. Companies face several challenges in choosing market expansion strategies: short product life cycles, entry barriers, competitors, and profitability.

Morocco ‘PESTEL analysis

• Morocco’s population is predominantly Muslim. It is ruled by a king, but it has a parliamentary form of government. The King commands and controls the major governmental issues, enforces the law, controls the cabinet, and calls for a vote.
• Economic Analysis: Morocco has a macro-economic system with high economic growth in textiles, clothing, mining, tourism, agriculture, and exports of shoes, mineral resources, and fertilizers. Morocco has a highly inflated market because of rising international commodity prices.
• Moroccan urbanization has reached a social analysis. Most of the population is comprised of Arabs and Berbers. Casablanca is the major city in Morocco for trade and commerce. Rural living is different from urban living in Morocco, with poor living conditions, illiteracy, and welfare facilities.
• Technological Analysis: The development of science and technology has recently increased in the Moroccan market. They have developed in the telecom sector, the internet, and infrastructure like roads, ports, airports, enhanced logistics, free trade zones, and medical and industrial locations.
• They are working heavily to conserve the environment with control on waste management, maintaining natural resources, renewable energy capacity, solar projects, wind energy programs, proper water and sanitation, reducing pollution, green buildings, eco-friendly energy consumption, and so on.
• Moroccan patents and intellectual property rights, national and international regulations, export and import laws, and so on.

Conclusion: From the 12C framework and PESTEL analysis, it was found that Morocco has the potential for a good market. Globalization has urged foreign companies to go abroad and establish their markets in foreign nations. They face many threats and weaknesses in a new country but need strategic decisions and initiatives to overcome them. To sustain living in a new economy, companies work out various marketing plans, financial plans, and managerial decisions. Morocco is a developing market and attracts various international companies through government efforts to invest there. The Moroccan market is influenced by political, cultural, social, economic, legal, and environmental factors and the company’s international experience with their products and operational management.

BIBLIOGRAPHY

Apte P.G., Vaidyanathan R., Indian Economic Review, Vol. XVII, Nos 2-4

Joshi Kritika, Gupta Vandana, 2012, International Journal of Social Sciences and Interdisciplinary Research, Vol.1 No. 6,

Elgarf Mahmoud Dr., Executive Organization for Industrial & Mining Projects, Ministry of Industry & Foreign Trade, Egypt

Can du Rue La de Stephane, McNeil Michael, Sathaye Jayant, 2009, India Energy Outlook: End Use Demand in India to 2020, Ernest Orlando Lawrence Berkeley National Laboratory

Doole Isobel, Lowe Robin, 2008, International Marketing Strategy: Analysis, Development and Implementation, Cengage Learning EMEA

Reham and Ebrahim, 2010, Brunel Business School – Doctoral Symposium, Brunel University West London

Amin Hussein Dr., 2002, The Arab Center for the Development of the Rule of Law and Integrity Project Title: Strengthening the Rule of Law and Integrity in the Arab World, Report on the State of the Media in Egypt,

See MARKET ACCESS SECRETARIAT Global Analysis Report, Consumer Profile, Morocco May 2014

See reports on Doing business in Morocco, March 2011, Ernest and Young

See Foreign Market Entry Strategy & International Franchising – Doing Business in Morocco, Rania Akhsassi, 2014

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