Transcript Charlotte Russe in Japan

Charlotte Russe in Japan
By:
Shreelakshmi Adarsh
Anoosheh Bahramipour
Mohammad Ben Tarif
Guillermo Barrera
Outline
 Country Review
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General
Economy
Demographics
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Opportunities
Challenges
 Business Review
 Market Analysis
 Internal Analysis
 Marketing Strategy
 Conclusion and Recommendation
Country Review
General
 Area: 377,835 sq km (slightly smaller than
California)
 Capital: Tokyo
 Population: 127.5 million
 Literacy Rate: 99%
 Government: Constitutional monarchy with a
parliamentary government
Country Review
Economy
 GDP: $3.582 trillion
 Composition by sector:
 Agriculture: 1.3%
 Industry: 25.4%
 Services: 73.3%
 GDP real growth rate: 2.7%
 GDP per capita: $28,200
Est. 2003
Country Review
Economy
 Exports: $447.1 billion
 Main Exports: motor vehicles,
semiconductors, office machinery and
chemicals
 Export Partners: US, China, South Korea,
Taiwan and Hong Kong
Country Review
Economy
25%
Export Partners of Japan
12%
7%
US
China
South
Korea
6.6%
Taiwan
6.3%
Hong
Kong
Est. 2003
Country Review
Economy
 Imports: $346.6 billion
 Main Imports: machinery and
equipment, fuels, foodstuffs, chemicals,
textiles and raw materials
 Import Partners: US, China, South Korea
and Indonesia
Country Review
Economy
Import partners of Japan
19.7%
15.6%
4.7%
China
US
South Korea
4.3%
Indonesia
Est. 2003
Country Review
Demographics
 High population density: 329.5 persons per
sq km
 50% of population on 2% of land
 Total population: 0.96 male/female
 Age structure:
 0-14 yrs: 14%
 15-64 yrs: 67%
 65 yrs and over: 19%
Country Review
Demographics
 Population growth rate: 0.08%
 Life expectancy at birth
 Male: 77.74 years
 Female: 84.51 years
 Total population: 81.04 years
6th Worldwide
Comparing to US of 77.43 years
Est. 2004
Business Review
 Charlotte Russe is an American women’s
clothing company.
 First store opened in Carlsbad, California in
1975
 Trendy women’s clothing.
 Very reasonable prices.
 Targets women between the ages of 15 and
35
Business Review
Products
 Satisfies broad range of ready-to-wear
apparel to match all lifestyle needs:
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Casual
Social
Career
Special occasions
 Dresses, shirts, tops, skirts, pants, shorts
and all types of seasonal wear as well as
outerwear
 Accessories such as shoes, jewelry,
handbags etc.
Business Review
Performance
 Today Charlotte Russe owns 256
stores
 Sales in 2003 fiscal year over $450
million
 Acquired Rampage stores in 1997,
taking it from 16 stores to 55 stores
today
The Question
Should Charlotte Russe enter
the Japanese market?
Market Analysis
Opportunities
 World’s second largest apparel
market after USA: $25 Billion
 Women’s clothing dominates the
market with the highest percentage
of sales
 Imports of apparel increased 10.9%
in 2003
Market Analysis
Apparel Market in Japan
56%
32%
12%
Women
Men
Children
Market Analysis
Imports from US
Apparel Imports From US in $Million
1000
0.8%
Value
800
1.6%
Quantity
600
400
200
0
1999
2000
2001
2002
2003
Market Analysis
Imports from China
Apparel Imports from China in $Billion
23.7%
Value
18
16
14
12
10
8
6
4
2
0
80%
Quantity
1999
2000
2001
2002
2003
Market Analysis
Year
Total Market
Local Production
2001 $32 B
$16 B
2002 $27.5 B
$13 B
2003 $25 B
$11.5 B
 Local production decreased 20% yearly
2001 – 2003.
Market Analysis
Year
2001
2002
2003
Exports
$215 M
$242 M
$291 M
 An increase of 20% in the last year.
Market Analysis
Opportunities
 The real success stories are in the
specialty store sector.
 Store-based sales, that account to
80% of the total sales, increased
6.1% in Feb 2004.
 2.5% increase in Sales in Feb 2004.
5% in Women’s clothing sales.
Market Analysis
 Summary of Feb 2004 sales increase:
Total Sales
+2.3%
Women’s
clothing
sales
+5%
Storebased
sales
+6.1%
Market Analysis
 Japan’s economy expanded a real
1.7% in the October-December
period:
 the best showing in 13.5 yrs
 Backed by strong corporate capital
investment, exports and consumer
spending
Market Analysis
Opportunities
 The average age of marriage for
females 27 years and increasing
 Japan’s birth rate is among the lowest
of the world’s advanced economies
Market Analysis
Opportunities
 Fashion-conscious women
 U.S. products have basic acceptance
in the market (makes authentic U.S.
apparel a popular market segment)
Market Analysis
Most popular American brand names in Japan
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Polo Ralph Lauren
Stussy
X-Girl
Gap
Nike
Levis
Market Analysis
Challenges
 An overall decline in the US apparel
exports
 A stagnant economy clubbed with
effects of the Asian financial crisis.
 Yen continues to teeter to the US$
(making US goods more expensive to
the Japanese market)
Market Analysis
Challenges
 A very little room for error (shipments must
neither be too early nor too late)
 Clothing produced by American companies
has been traditionally designed for the
Western women’s figures)
 Japanese are highly conscious of the quality
of sewing
Market Analysis
 What do Japanese females
demand for?
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Brand name
Affordable price
Quality of sewing
Fabric texture
Trendiness
Internal Analysis
 What does Charlotte Russe offer?
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Popular American brand name
Good quality clothing & reasonable price
Trendy
Good fabric texture
Internal Analysis
GAP: $30
Marketing Strategy
 4 Alternatives for penetrating the Japanese
market:
 Hire Japanese trading companies to act as
agents to export our goods
 Sell directly to Japanese trading companies who
can then import these goods into Japan
 Sell through a U.S. based company that is
familiar with the Japanese apparel market and
has connections with Japanese importers or
businesses
 Sell directly to the market through specialty
stores
Marketing Strategy
Target Market
 Young female trend-setters
rather than trend-followers
 Control the most discretionary
income in Japan
 Are concentrated in large cities
such as Tokyo and Osaka
Marketing Strategy
 Mail order catalogs
 Billboards in cities like Tokyo and
Osaka
 Television and print advertising
through select channels of media
 Participating in Japanese tradeshows
or visiting trade shows in the United
States that attract Japanese
attendees
Conclusion & Recommendation
Big population
+ Big market segment
+ High purchasing power
+ Fashion oriented women
+ Few U.S. competitors
+ Very affordable prices
+ Specialty stores advantage
+ Brand name
+ Nice clothing
= Excellent business opportunity.
Thank You!
Any Questions?