Implication Of Direct Export Strategy In Kenya - Burberry Plc

P1 Producing research proposal defining research questions supported by literature review

Background

Globalisation has led path for economies to be interdependent with regards to goods and services. It has become favourable to mankind in getting products and services which are not available in their own country (Mommen and Jilberto, 2017). Large inflows and outflows of items takes place having wide variety of goods being offered to people leading to satisfaction level as they can purchase from pool of commodities. Integration of developed and developing economies of world have provided all the relevant outcomes by which multinational firms operating on large scale can effectively export goods for increasing and expanding their operations quite effectually.

Direct exporting market strategy has become useful for organisations to export directly to potential and new customers for purchasing the same (Burnett, 2017). This leads to avoiding all middleman costs or third party distributors having more profits in the best way possible. The present aim of research project is to examine the impact of direct exporting entry strategy of Burberry PLC in Kenya, country in East Africa for maximising operational activities. Burberry PLC is a globally sound organisation engaged in fashion industry making entry to emerging market which is Kenya so that customer base can be increased. This will help company to attain more profits and enhance its overall position in the new market. It will be fruitful for firm in accomplishing objectives in new emerging market which is achievable due to globalisation.

Aim

“To examine the impact of direct exporting entry strategy in Kenya in the context of the fashion industry- A study on Burberry PLC”.

Objectives

• To identify factors of direct exporting strategy for benefiting impact growth of Burberry PLC in Kenya.
• To analyse major benefits of globalisation leading to enhanced operations of Burberry PLC in overseas market.
• To recommend on improving operations and examining direct exporting strategy for success of Burberry PLC in Kenya.

Research Questions

Q1. What challenges Burberry PLC to expand to Kenya market for better performance?

Q2. What are the factors of direct exporting market strategy beneficial for Burberry PLC?

Q3. Do globalisation enhances overall operations of Burberry PLC?

Importance of study

Globalisation has paved the way for attaining international markets so that profitability position can be enhanced quite effectually. It is becoming useful for firm for expanding its customer base. Direct exporting entry market strategy is helpful for organisations in accomplishing profits by reducing middleman costs in effective manner (Carmel, 2018). The importance of present study will focus on Burberry PLC that how can it enter market of Kenya with the help of direct exporting and what will be impact of such strategy on company. Market entry strategies are required to be implemented so that company may be able to attain desired customers in accordance to target market.

Eliminating intermediaries in a manner which will be fruitful for company in attainment of huge quantum of profits (Delaney. 2018). Burberry PLC has implemented strategy for attaining efficiency on global scale and will deliver combination of organic profits and strong cash generation and fair allocation of capital. This will prosper company in accomplishing higher growth. Moreover, greater level of control on organisation's operations and aspects of transaction made with them. Direct exporting is global market entry strategy which will be used by Burberry PLC to enter into Kenya so that operations can be expanded and more profits can be accomplished. Research questions being formulated by researcher will be effectively addressed so that objectives of research can be met and conclusion could drawn of research with aspect of examining impact of direct exporting strategy on Burberry PLC for expanding to Kenya.

Literature Review

Theme 1- Direct Export and Emerging Markets

As per the views of Lasserre (2017), globalisation is one of the important aspect in movement of goods and services across borders. Trade liberalisation is based on export growth model and has major benefits in the form of profit generation, employment creation and boosting growth of economy. Business is able to expand in countries which help to attain overall economic growth. In contrast to this, Blanchard and Olney (2017) says that trade liberalisation is reverse process of protectionism being imposed by domestic country to protect industries from global industries in fear of losing domestic share in hands of international companies. Free trade is possible because of trade liberalisation. Moreover, direct export injects profits to firm as trade becomes simpler and costs is minimised. The result of liberalisation and integration process is termed as globalisation which signifies relationship between trade liberalisation and globalisation.

Theme 2- Impact of market entry strategies on companies

According to Gözgör and Can (2017), market entry strategies on global level is important for company in order to provide better understanding of international scenarios so that customer base can be attained in a better way. Exporting, countertrade, licensing, joint venture are some of entry strategies of market which helps business to attain an edge over new market ahead of its competitors in the best way possible. Sunde (2017) says that impact of these strategies on organisations are of much importance. This is because company implements such strategies in order to enter into market with a view to accomplish customer's base in effective manner. Exporting is used to enter in market by selling goods to consumers with the involvement of intermediaries. Countertrade is another international trade which is attained by exchanging goods which are paid with other commodities rather than with currencies. As per the views of Deng and et.al. (2018), licensing is an agreement where licensor grants permission to licensee and in return royalty fees is paid. Joint venture is an enterprise which is formed by two or more investors sharing ownership and rights over control and operations. Such market entry level impacts companies which are based on various aspects such as ownership, sharing of risks and control over operations.

 Theme 3- Direct exporting in international business

Petras (2017) says that direct exporting is selling goods directly to customers without third party distributors and exports can take place. This helps to eliminate middleman and direct contact with customers can be accomplished in a better way. It is beneficial for economies which have low profits in hand by exporting with the help of intermediaries. It helps to cut-down costs and more income can be generated by them. It also provides protection in terms of trade marks, copyrights and patents. Indirect exporting is major aspect of exporting goods or selling to inventory which in turn sells to customers or wholesalers. It is a low-risk strategy often implemented by organisation which has no knowledge about market situation and taste of customers. Furthermore, in export process, minimal involvement is required and objectives can be achieved. It has a greater level of exports on international basis.

Theme 4- Mergers

According to Tarba and et.al., (2017), international merger and acquisition is growing on regular basis. Generally this entry strategy is replicated to specific merger and acquisition which are taking beyond boundaries of specific country. However, these are also known as global or cross border merger and acquisition. Globalisation and worldwide reforms of financial has directly contributed for developing international acquisition and merger at substantial extent. As these mergers and acquisition are undertaking in varietal forms such as vertical, horizontal, congenric, conglomerate, accretive mergers and others.

According to Brueller, Carmeli and Markman (2018), these global merger and acquisition are performed with objective of attaining some strategic advantages in markets for specific country. By considering helps from these international merger and acquisition, various MNCs could enjoy numerous advantages which consist of economies of scale and market dominance. However, according to author global merger and acquisition signifies important role involved in company's growth. It directly deals with various transaction for helping in big companies for penetrating in innovative market and to attain economies of scale. Hence, it also stimulates foreign direct investment or FDI.

As per views of Vuori, Vuori and Huy (2018), process of M&A is invariable consolidates the position in organizations which are duplicated. It often signifies the probabilities of lay-off and must place people for working an indefinite duration. Due to absence of potential is considers as definite until the completion of this process. In the similar context, many organizations are forced at high level of uncertainty because they don't know about happenings. According to author, it helps in establishing different growth opportunities internationally. Two separate business might be competing against each other and can now operate together as entity for completing process of M&A. It is indirectly signifying this event in effective aspect and provides economic advantages. Consumer prices related to services and goods might or might not increase but overall, it is effective organization which creates economic opportunities.

According to Sellers, Zimmerman and Fogarty (2018), it adds value to entity which is combined either on individual aspect which could produce on its own. This process is related to decreasing duplication and efficiency for obtaining. The end outcome helps in enhancing level of attaining revenue due to inexpensive redundancies which incur in whole product chain. On the contrary, author has stated that it might raise owed amount of debt in balance sheet. It could also impact ability of organization for establishing new credit lines or to borrow additional funds for expanding it globally. Various M&A has requirement of numerous people on both aspect to asile on similar page. If it does not happen then time taken for completing process of M&A extension. It helps in creating additional cost which might be risk of merger and acquisition greater than its advantage. It is replicated as cost effective method for fuel expansion as business has to upgrade their internal process as well with technologies which are already existing and created massive charge on different budget lines.

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Research Methodology

Research Philosophy-

The research philosophy is used for providing a belief about how data should be gathered, analysed and used. Interpretivism and positivism are two methods of research which can be used by researcher. On the other hand, interpretivism philosophy will be used by researcher for interpreting results of research in a better way (Humphries, 2017). Furthermore, scholar would easily gather facts and figures so that it outcomes would be easily interpreted.

Research Type-

Research type can be categorised as quantitative and qualitative in nature. It can be analysed that researcher can use both methods in accordance to the purpose of research in the best possible manner. In relation to this, it can be said that quantitative method deploys understanding in order to gather facts and figures so that scholar can effectively achieve clarity about research topic with the help of which research questions are addressed in a better manner. On the other hand, qualitative method is opposite of quantitative technique so that theoretical framework can be addressed with ease (Vaioleti, 2016). In current research, scholar will apply quantitative technique so that impact of direct exporting strategy on Burberry PLC could be examined. The rationale behind selecting this technique is to analyse research problem by examining relationship among market entry strategy and globalisation.

Research Approach-

The research approach is based on manner in which research would be approached in positive way by which research outcome can be attained quite effectually. There are two approaches that can be used by researcher in accordance to research problem in hand leading to arrive at conclusive evidence of research. Deductive and inductive are two approaches of research. Deductive approach is used to provide a base for developing hypothesis which in turn based on existing theory and then forming the theory from particular to general (Vera and Fabian, 2016). While, inductive approach is used for generating new theory from data. Researcher will use deductive approach for completing research project for attaining at outcome.

Research Design-

Research design is a plan or schema of entire project by which entire research is based. It provides direction to execute project according to plan being made. This helps researcher to effectively accomplish outcome with ease. There are two types of research design such as exploratory and descriptive research designs. The researcher will use exploratory research design for effectively attaining deeper and useful insight about subject in hand in a better way. It will be helpful for accomplishing research objectives in accordance to plan. It can be justified that in order to clearly identify problem under study by making modifications under study.

Sampling-

Simple random sampling method is an important technique which is used to take sample from population by implementing random choosing of population. Researcher will use sample of 30 employees of Burberry PLC so as to gather data by issuing them questionnaire which will serve the purpose of research in the best way possible. Furthermore, by taking sample of employees, viewpoints regarding impact of direct exporting strategy in effective manner. Moreover, sampling will provide better analysis of data and research will be concluded quite effectively.

Data collection-

The data collection will be done by taking into account primary and secondary sources. Primary source of data is used for making proper analysis with the help of questionnaire to 30 employees so that data can be gathered from it. Moreover, interviews will be taken as well from respondents. On the other hand, secondary data will be gathered by taking access from books, journals, articles which are regarded as reliable sources.

Data analysis-

Quantitative technique will be implemented and in relation to this, themes will be produced by taking into account data which will be generated. This will serve the purpose of research in a better way by which researcher can effectively attain outcome by interpreting the same. It will be helpful in providing results of data gathered with ease.

P2 Examining appropriate research methods and conducting primary and secondary research

The primary and secondary data both are one of the important sources for generating data in the best way possible. It is essentially required so that researcher may be able to provide better influence over the impact of globalisation on Burberry PLC with the help of which desired data can be gathered in a better way. Questionnaire will be issued to 30 employees so as to attain outcome in effective manner. It is a reliable method for effectively achieving viewpoints of sample population by incorporating simple random sampling method in effectual way.

Secondary data is another useful source for collecting data from reliable sources in order to accomplish desired data by getting access to books, journals, articles being published on internet. These are termed as second-hand as it has been already collected for some other purpose by other researcher. Thus, both secondary and primary data have been used by scholar.

You can also read- Reflection on a Research Undertaking of Kingfisher Plc

P3 Conducting primary and secondary research considering costs, access and ethical issues

Costs-

There are various types of costs which are being incurred for effectively conducting research so as to address research questions and accomplish research objectives. It can be analysed that travelling costs, printing costs and data collection expenses have been incurred. These costs are required so that research can be conducted quite effectively (Fletcher, 2017).

Access-

Access has been taken to complete research in a better way. Books, journals, articles are used from reliable sources. Thus, it has been used for serving current research for examining impact of direct exporting strategy on Burberry PLC to expand in Kenya.

Ethical issues-

Permission has been taken from employees of Burberry PLC to effectively attain outcomes of research. Purpose behind data collection is being taken and then data has been collected from employees.

P4 Applying analytical tools for findings of researchInterpretation-

Research type:

For conducting the research to examine the impact of direct export Strategy in Kenya in context of fashion industry quantitative technique have been used to analyse the actual impact. For application of this technique facts and figures has been collected to determine the exact phenomenon of implication of direct export strategy. The reason behind using this research type is that data can be analysed using statistical tools such as Excel and SPSS and the results reached are extremely reliable as it is always said that number do no lie and same is application for this research technique as well. It was found that globalisation has up scaled business operational activities in a broader manner leading to attainment of desired profits.

Research approach

To conduct this research deductible has been applied as this emphasis on reasoning by concrete application of consequence from general principle. The reason behind selection of this approach has been that it aims and tests the theories and then a conclusion is reached.

Research design:

Under this research project exploratory design has been applied as this provide an insight to the research topic ans decision making becomes less complicated ans various dimension related with project have been explored. Te main reason behind choosing this is that this method assist in clarifying ambiguous problems which have been seen in this project (Alvesson and Sköldberg, 2017).

Research philosophy:

The philosophy that have been applied in this research project is interpretivism. The reason behind choosing this philosophy is that it is related with humanistic qualitative methods. This states that human minds must be read and relevant information and though shall be applied in analysis of data and retching conclusion of research project.

Research sampling:

For research sampling 30 employees have been selected randomly as samples and they been asked same question about research topic which have been presented to them in questionnaire format. It was found out that majority of respondents said that globalisation has enlarged operational activities of business.

Data collection:

Data is collection has been done by using both methods i.e. primary and secondary (Wiek and Lang, 2016). The primary data gas been collected trough survey of 30 employees of the organisation. Secondary data has been collected from relevant books, journals and article written in same context.

Data Analysis:

Analysis of data collected through primary and secondary method is done on thematic basis. For data collected themes have been prepared as per facts' similarity. This method have been chosen in present research project because ii sis best for analysis quantitative data collected form primary and secondary methods. Themes and pattern across data have been prepared for correct interpretation of facts and figures.

P5 Communicating outcomes to audience

Theme 1 – Globalisation increases operations of organisation

Interpretation-

It can be analysed from chart that globalisation increases operations of organisation as 12 have strongly agreed the statement and 9 respondents have agreed. While, 5 are strongly disagreed and 4 disagree with it.

Theme 2 - Direct exporting market entry strategy is fruitful

Interpretation-

It can be interpreted from chart that 12 respondents strongly agree with statement and 7 agree with it. While, 6 strongly disagree that direct exporting market entry strategy is fruitful. Moreover, 5 disagree with it.

Theme 3 – Faster feedback from customers

Interpretation-

It can be analysed that direct exporting strategy has main benefit that faster feedback from customers could be taken so that queries can be resolved in effective manner. While, 7 respondents answered it is cost-effective for company. 8 said that increase in profits can be accomplished so that firm can maximise with the help of such strategy. 5 answered better control over transactions can be achieved.

Theme 4 – Improves positio n of Burberry PLC

Interpretation-

The above chart represents that 12 employees said that expansion of operations in emerging markets improving overall position of Burberry PLC. While, 4 agree with it that operations can be expanded in emerging markets like Kenya. 5 respondents strongly disagree and 9 disagree with it.

Theme 5 - Foreign distribution has much influence of strategy

Interpretation-

It can be analysed that foreign distribution is achieved by implementing direct exporting strategy in a better way. While, 8 answered market research has much influence by such strategy. 6 said invoices handling is influenced and remaining 7 employees replied shipment has much influence due to strategy.

Theme 6 – Globalisation has benefited Burberry PLC

Interpretation-

It can be assessed that globalisation has benefited Burberry PLC in international markets as 19 respondents are in favour of it. Thus, in Kenya, it can implement its operations for accomplishing more profits.

P6 Reflecting on effectiveness of research methods applied in the business

I have been able to enhance my skills in a better way. Data has been gathered from sample population and communication skills are being improved. Furthermore, in-depth analysis is being carried out by implementing thematic analysis which has also improved by data analytical skills. I'm able to grab knowledge on impact of direct exporting strategy on Burberry PLC and I' have also gathered facts and figures that organisation will be successful in operating in Kenya as it is an emerging market. Moreover, time management skills are also improved of mine in completing project within stipulated time. Overall research has benefited me for further growth in sector so that I' will conduct future research in a better way. Thus, I' have acquired and improved these skills and applied quantitative method for research outcome.

P7 Alternative research methodologies

Research methodologies are applied in order to explore data in effective manner and attain results. Scholar has implemented quantitative method for conducting research by gathering results. On the other hand, qualitative factors can be applied and qualitative technique is then replaced by it. It also useful method for collecting data in accordance to theoretical framework. While, primary data has been gathered by issuing questionnaire to employees of Burberry PLC. However, observation method, interviewing candidates can be used in place of it. Inductive approach can also be applied by researcher.

CONCLUSION

Hereby it can be concluded that globalisation is crucial for large multinational organisations which have diversified operations in many countries. Burberry PLC can easily enter market of Kenya by applying direct exporting strategy having ample of benefits. Research methods applied also clarify that it will be major impact on overall performance and sales could be increased. Moreover, data analysis has been conducted by which respondents have answered in favour of emerging market for expanding its operations. Hence, it will be able to attain benefits and profitability will be maximised.

REFERENCES

Alvesson, M. and Sköldberg, K., 2017. Reflexive methodology: New vistas for qualitative research. Sage.

Blanchard, E. J. and Olney, W. W., 2017. Globalization and human capital investment: Export composition drives educational attainment. Journal of International Economics.106. pp.165-183.

Brueller, N. N., Carmeli, A. and Markman, G. D., 2018. Linking merger and acquisition strategies to postmerger integration: a configurational perspective of human resource management.Journal of Management. 44(5). pp.1793-1818.

Burnett, R., 2017. Global strategies and local markets: explaining Swedish music export success. In Global Repertoires (pp. 9-19). Routledge.

Carmel, E., 2018. The Globalization of Software Outsourcing to Dozens of Nations: A Preliminary Analysis of the Emergence of 3 rd and 4 th Tier Software Exporting Nations.The Digital Challenge:

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