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By Shazia Kamal
ID NO. 21361941
Executive Summary
The paper focuses on the startup of an e-commerce venture in UK. A company named Rahat
Continental which has a business of air services to deliver the consignments. Rahat is IATA
certified and has access to all major airlines of the world. They are planning to set up an online
shop for the sale of organic cotton garments for infants in UK. This would be totally an unrelated
diversification of their business which will be posing risks in the new market; on the other hand,
it could either open new avenues of business for Rahat. This paper focuses on devising a thorough
strategy for establishing e-commerce business in UK and sustainability of the business model. The
epicenter of the paper is the implications of the business strategy on the e-commerce business as
well as the effect of Brexit on the business. Furthermore, other external factors like legal, political
and social factors are also discussed in the paper related to the new business of Rahat Continental.
The market of infant clothing is highly competitive and there are a lot of entry barriers to enter this
market. According to some researches, people have disposable money for clothing of their newly
born babies, but at the same time due to competitive environment they tend to look for better offers.
Furthermore, studies suggest that the birth rate in UK is declining with time which make this
industry even more competitive.
Another major factor affecting the new businesses in UK includes the upcoming economic decline
and uncertainty which Brexit is posing to the economy of the country. In this scenario, international
investments may be risky due to expected lowering of value in pounds, and economic implications
on import/export tariffs.
The target market of the company would be the first-time-parents as well as experienced parents
who have babies of upto 2 years. The target parents are aged between 25 to 35 years and are well
connected to the digital world, know use of mobile applications and all the social media buzz.
On the whole, this new venture is exposed to high competition in the market and instable
political condition. As there could be high level of risk involved in entering this business, Rahat
need to cover these risks before entering the market. Local partnerships and joint-venture could
be good option to hedge the risk which are expected to arise.
Contents
Executive Summary -------------------------------------------------------------------------------------------------------------- 1
Introduction of Rahat continental Limited R.C.L) with a focus on the UK market -------------------------------- 3
History of company -------------------------------------------------------------------------------------------------------------- 3
Business Activities of the Company: ----------------------------------------------------------------------------------------- 3
BUSINESS STRATEGY FOR RAHAT CONTINENTAL ORGANIC CLOTHING FOR INFANTS (E-Commerce Bases
Business) ---------------------------------------------------------------------------------------------------------------------------- 3
Mission:-------------------------------------------------------------------------------------------------------------------------- 3
Keys to Success: --------------------------------------------------------------------------------------------------------------- 3
Products: ------------------------------------------------------------------------------------------------------------------------ 4
MARKET ANALYSIS --------------------------------------------------------------------------------------------------------------- 4
SIGNIFICANT BUSINESS DRIVERS --------------------------------------------------------------------------------------------- 5
Spending Power of the Parents: ------------------------------------------------------------------------------------------- 5
Change of Social Habits: ----------------------------------------------------------------------------------------------------- 5
Cultural Difference: ----------------------------------------------------------------------------------------------------------- 5
Barriers of Entering the UK Market: ----------------------------------------------------------------------------------------- 5
Price Sensitivity: --------------------------------------------------------------------------------------------------------------- 5
Economic Decline: ------------------------------------------------------------------------------------------------------------ 5
Political Instability: ------------------------------------------------------------------------------------------------------------ 6
Other Implications of Exiting Brexit:-------------------------------------------------------------------------------------- 6
ETHICAL AND LEGAL CONSIDERATION -------------------------------------------------------------------------------------- 7
Ethical Implications: ---------------------------------------------------------------------------------------------------------- 7
Legal Implications: ------------------------------------------------------------------------------------------------------------ 7
THE ASPECTS OF INTERNATIONAL MARKETING RELEVANT TO THE PROPOSED VENTURE --------------------- 7
Competitive Edge ------------------------------------------------------------------------------------------------------------- 7
Marketing Strategy ----------------------------------------------------------------------------------------------------------- 7
Pricing Strategy: --------------------------------------------------------------------------------------------------------------- 8
Sales Strategy: ----------------------------------------------------------------------------------------------------------------- 8
THE E-COMMERCE OPTION VERSUS OTHER METHODS OF EXPANSION -------------------------------------------- 8
Brick & Mortar: ---------------------------------------------------------------------------------------------------------------- 8
E-Commerce: ------------------------------------------------------------------------------------------------------------------- 8
Brick & mortar against digital --------------------------------------------------------------------------------------------- 8
Recommendation and Conclusion:------------------------------------------------------------------------------------------- 9
References ------------------------------------------------------------------------------------------------------------------------ 10
Introduction of Rahat continental Limited R.C.L) with a focus on the
UK market
History of company
The company Rahat Continental Provide supply chain services to the global businesses who need
such services. It was established in 1986 and is owned by an Indian business family. The company
since its inception has expanded worldwide and is part of the WCA network and has clientage in
more than 30 countries globally. [Rahat Continental. (2018)]
The company is involved in several business activities which are quite diverse and lucrative,
activities are as under:
Air Freight
Sear Freight
Supply Chain
Warehousing services
Healthcare
Fashion & retail
Automotive
Manufacturing
Keys to Success:
Easily reachable website which is engaging to visit. Just like going to the most favorite
store where one generally finds something new that one needs.
Setting up a solid advertising campaign in a conventional media vehicle; i.e. magazines
A Good relationship with vendor that will promotes quality production of garments
made of organic cotton for infants and brisk shipment
Securing an outstanding design staff [bplans. (2018)]
Products:
Rahat Continental will sell infant garments made of organic cotton online. We will offer we will
center on the seasonal garments demands of our customers including the Following:
1. "Coming-home" outfit 8. Gowns with an elastic bottom
2. One-piece outfits 9. Hats
3. Stretchy pull-on pants 10. Socks or booties
4. Snap-crotch T-shirts 11. Fleece bodysuit
5. T-shirts with side snaps 12. "Wearable blanket" sleeper
6. Sweater 13. Dress-up outfit
7. Jacket
MARKET ANALYSIS
The estimated worth of the infant clothing market in UK was £782 in 2013, which means that the
approximate per child (upto 4 years) sale is £193. The average monthly spending of the parents on
their infant’s clothing £65. [Pragmauk, (2017)]
The full potential of the organic cotton clothing for infants can only be comprehended by blue
ocean strategy. Since the organic clothing market is highly monopolistic, since there is no market
leader which can provide an organic product for infant clothing. As suggested by the research
that ethical clothing has a special importance among the consumers. Since the number of
competitors in the normal infant clothing market is high customers switch from one brand to
another easily.
The infant clothing market of UK has a number of well-established competitors running their
businesses globally such as:
H&M,
Asda (George),
Next,
Riverisland,
Mothercare,
Primark,
Disney etc.
The market is witnessing a decline in sales since the entry of retail, fast fashion and e-
commerce sellers is rapidly increasing. [Euromonitor, (2017)]
SIGNIFICANT BUSINESS DRIVERS
Cultural Difference:
Rahat Continental as compared to India will have to face a huge difference of culture in UK where
communication is more open in contrast to the Indian culture. Hence an adaption approach
incorporating the polycentric strategy will be more viable in UK.
Economic Decline:
It is expected that the UK’s GDP growth will slow down in 2018 due to exit from Brexit and cuts
on public spending. There could be no or a little change in the unemployment and the growth in
the wage rate is expected to be low [Trading Economics, (2018)]. It has been explicitly signaled
by the Bank of England that there will be an increase in the inflation rate in near future.
Furthermore the UK economy after leaving EU has seen a rise in inflation from nearly 0 to 3%.
This has also resulted in the devaluation of pound which has effected the international trade.
Political Instability:
Since the UK has separated herself from Brexit it poses a possible uncertainty on the future of the
country’s textile industry. UK also expects further devaluation of the British Pounds which will
result in a low confidence of the customer effecting the retail sales in the longer run. After the exit
from Brexit, a restriction is expected on the free movement which will resultantly be effecting the
foreign employees. Furthermore it will become more difficult to recruit and retain employees.
Furthermore, trade tariffs on imports and exports may also be faced by companies, as we speak
India has a 10% export duty whereas UK does not impose any duties on these goods [CBEC,
(2015)].
Ethical Implications:
The major issues being faced by the clothing industry are related to worker’s rights and child labor.
Since the world has become a global village the consumers are now concerned with the source of
clothing products, in this case RCL will have to keep a close check on compliance of the labor and
employment laws. Moreover the consumers are also concerned with the ethical compliance of
environmental laws like the use of pesticides, the disposal of the garments and the damage to the
environment by the operations of the production plants. [Goworek, (2011)]
Moreover it should be kept in mind that data security is not compromised at any point and
information provided by the consumer is safe. This new venture of RCL should have to adhere
with the privacy laws set by the UK Government and also will have to disclose all the necessary
information regarding the products being offered accurately and honestly.
Legal Implications:
In UK it is required by the companies to adhere to certain laws which include the “General Safety
Regulations 2005”,”the Children’s Clothing (Hood Cords) Regulations 1976” and “Nightwear
(Safety) Regulations 1985”. Safety practices prescribed by the “BSI British Standards Code of
Practice.
Rahat Continental will win market share in the newborn child natural cotton garments niche by
aggressively seeking after perceivability with its target customers.
Competitive Edge
Rahat Continental's competitive edge is its attention on the procedure than on the product. The
only the outcome of marketing campaign is to drive clients' passion for organic cotton garments.
In spite of the fact that we believe in the quality and appeal of our items, we realize that building
the street to the site is our most essential activity.
Marketing Strategy
Rahat Continental's marketing strategy is a very simple. In kids and women magazines, Rahat
Continental will acquaint clients with their items and site.
For the initial two months, Rahat Continental will offer 10% off for all buys under 75 pound and
15% off all buys more than 75 Pounds. We will offer a similar markdown methodology three more
circumstances amid the year when new occasional dress is presented.
Pricing Strategy:
Rahat Continental's pricing strategy is to pass on a large portion of the markup of the store to the
customer by giving them low priced garments. There is no negative effect of this decision on the
benefits of our business and will on the other hand retain a portion of the underlying expense of
offering price reductions amid our initial few months of activity.
Sales Strategy:
Rahat Continental will initiate a £120,000 advertisement campaign. Rahat Continent’s enthralling
logo will be a part of the advertisements aggressively. We gauge it will take a large portion of time
to increase our sales until we start earning any profit.
E-Commerce:
It is a type of business model that helps the entrepreneur to operate virtually. It is mostly related
to online selling of goods like grocery, clothing and technological gadgets. The business has less
operating cost and can do better than brick and mortar. [Investopedia. (2018)]
References
bplans. 2018. Clothing E-commerce Site Business Plan. [ONLINE] Available at:
https://www.bplans.com/clothing_e-commerce_site_business_plan/executive_summary_fc.php.
[Accessed 10 April 2018].
Digital State Marketing. 2018. Brexit and what it means for ecommerce in the UK.. [ONLINE]
Available at: https://digitalstatemarketing.com/articles/brexit-means-ecommerce-uk. [Accessed
11 April 2018].
bakermckenzie. 2018. Ecommerce, Social Media and Data Privacy. [ONLINE] Available at:
https://www.bakermckenzie.com/en/expertise/areasofpractice/ecommerce-social-media-and-
data-privacy. [Accessed 16 April 2018].
geoawesomeness. 2013. Security and privacy issues of LBS (geo-apps). [ONLINE] Available at:
http://geoawesomeness.com/security-and-privacy-issues-of-lbs-geo-apps/. [Accessed 17 April
2018].
Pragmauk (2017) Industry Snapshot: UK Baby and Children's Market. Pragmauk.com. [Online].
Available at:
http://pragmauk.com/wp-content/uploads/2017/12/CWB109-Industry-Snapshot-UK-Baby-
Childrens-Market.pdf [Accessed: 2 April 2018].
Halifax (2017) Costly kids: Almost a fifth of average salary spent on raising a child. [Online].
Available at: https://static.halifax.co.uk/assets/pdf/media-centre/press-releases/2017-12-20-
costly-kids-almost-a-fifth-of-average-salary- spent-on-raising-a-child-press-release.pdf
[Accessed: 14 April 2018].
Craik, L. (2015) Children’s fashion: small people, big business. the Guardian. [Online]. Available
at: https://www.theguardian.com/fashion/2015/feb/15/childrenswear-childrens-fashion-prince-
george-suri-cruise-harper-beckham [Accessed: 20 May 2018].
Goworek, H. (2011) Social and environmental sustainability in the clothing industry: a case study
of a fair trade retailer. Social Responsibility Journal, 7 (1), p.74-86. Emerald [Online]. Available
at: doi:10.1108/17471111111114558 [Accessed: 19 April 2018].