The TopShop and the River Island companies present the best option for the demonstration of the development prospects of a large trading company. The organisations are interesting due to the originality of their economic development, and the authentic representations in the global market. It is valuable to learn about the success essence of such international trade leaders.
The TopShop Company
The TopShop Company is a famous multinational retailer. Among the products on its shelves and web pages of online stores, there are clothing, shoes, accessories, and make-up. The scale of the activity is worldwide, and the geography of the sales covers the major cities of the Great Britain, the United States, Europe, Asia, and Australia. The collaboration with the fashion designers, especially in the British market, makes TopShop commercial function more attractive to investors based on the brand recognition and popularity of the company.
The PESTEL Analysis
TopShop is based in the UK, and the headquarters, from where the formed strategic policy and tactical measures are delivered, is located in London. The location has a positive effect on the business activity, as the political situation in the Great Britain is favourable for business. Moreover, the country is in close cooperation with international organizations such as the OSCE, NATO, and the Council of Europe. The shaky political forces and unequal socio-economic development in some countries often force the companies to monitor the foreign markets (Halik, 2012).
Regarding the economic position, the functioning of the company is successful. The business takes a profitable niche with the stable demand dynamics, offer a wide selection, and has a franchising network (Rushton, Croucher, & Baker, 2014). The possible upturn in inflation may increase the prices, reduce the purchasing power of consumers, and decrease the demand for fashionable clothing and accessories. TopShop should adapt to the local business management, cultural and social contexts, which need the additional research, business effort, and human resources.
The TopShop Company is constantly influenced by the social factors. In fact, clothing, shoes, accessories and other products have to meet the needs and the expectations of consumers regarding the quality, style, and price. The study of the buyers’ social status, the standard of living, and social events reflects on the product range.
The company extensively uses the modern technology through online stores. Such strategy gives the advantage over the competitors without commercial websites. Moreover, the company provides the opportunity to place an order through the mobile applications.
The collaboration with the organizations of environmental protection provides the opportunity for TopShop to maintain the sustainability of production. Therefore, the strategy encourages the manufacturers of fabrics and materials and partners of TopShop to sell eco-friendly clothing, shoes, and other products (Vijayvargy & Jain, 2014). The established partnership with such organizations is carried out by the sales of products made from the waste of garment production (Kralj, 2009).
The legislative part of external environment, like for any global company, lies for TopShop in the adherence to both international and national laws of the distribution countries. In fact, it requires the considerable legal capacity. The competition of the company may be limited by the authorities through the laws of the support and development of local businesses.
The SWOT - TOWS Analysis
The threats of the external environment of TopShop are the current and potential retailers, the possibility of legal conflicts appearance during the market expanding, the obsolescence of technologies, inflation upturn, franchising risks, limits of local laws, etc. The emergence of the controversial situations may attract the attention of buyers, but the wide information policy of the competitive advantages should be implemented through the advanced technology of TopShop. The competition gives a stimulus to the development of a new line of products, such as menswear or haberdashery. The risks of the franchise sale can be the beginning of the expanding cooperation with the designers all over the world. If the country law prioritizes only local business, TopShop may offer a partnership to the local designers. Therefore, such decision will turn the risks and threats to the additional opportunities for development.
The strengths of the company are significant marketing and promotional skills, sharp flair for the sales increase, and the use of innovative technologies. The orientation towards fashion trends helps the company to sustain the competition of retail brands. Thus, the weaknesses can be covered by the strengths. If the exclusivity of fashion clothing, footwear, and accessories dissapears through the mass distribution, then the TopShop Company can handle the regular product updates in its stores, including online shops. In addition, competitors often copy the TopShop style, but it gives the additional popularity and stimulates the interest of potential customers.
The Trade Distribution Process
The TopShop has many different trade distribution channels and several sites to promote the brand. It provides the company with constant trade distribution processes which covers all regions of the world associated with light and textile industry. In addition, the number of large outlets in Asia region continues to grow, despite the strong competition. Moreover, the international trading company is represented in the market through the franchising arrangements and wholesale agents. The global coverage strategy gives TopShop the prospects for leadership in international trade.
The River Island
The River Island is another global trading company, with operates in the retailing of fashion clothing, shoes, bags, and other products. As the brand, the River Island is well-known in the UK, Ireland, Europe, the Middle East, and Asia. The brand is affordable for the buyers around the world, who order its products through any of the six online stores. The company has the clear structure and is proud of the range of their services (Guzik, 2011). By the end of 2012, the River Island closed the fiscal year with more than 802,000 turnover, which is 2,6 times more than in 2000.
The PESTEL Analysis
Among the political factors affecting the activity of the River Island, the main is the policy of the distributing countries. With the expansion into new markets, the global trading company focuses on the supporting political forces. Stable political situation contributes to the promotion of the international companies, retail development, and international relations. The most attractive market segments have favourable conditions for the business development. The progressive democratic initiatives, aimed at the introduction of innovative business, coincide with the River Island concept and facilitate the collaboration.
The economic factors are directly linked to the company effectiveness. The cyclical influences of the world economy, the overall demand for clothing, and change in fashion have an effect on the company. The factors determine the growth and decline of the River Island business activity. Moreover, the different rate of inflation and bank operations in the locations of the store affect the opportunity for the company to increase income.
The social aspect of the company is represented by the corporate social responsibility. They closely cooperate with charities that support the patients with epilepsy, the people with disabilities across the UK, disadvantaged children in India, and other non-profit organisations. Such ethical initiatives demonstrate the social cooperation, which is also favourable for the relations with employees. The River Island maintains long-term relationships with suppliers, partners, workers, and customers based on the mutual responsibility. The company studies the social circumstances of the business in some countries through marketing research in order to adapt to the potential clients (Mennen, 2011).
The technological aspect of the River Island activity is the powerful support of the sales via the Internet. The company owns several electronic stores, which allows any user to order online. The website of the River Island has the option to install an application for a mobile phone. The important factor is the dependence of the company on the emergence of technical and technological innovations, and the degree of the scientific progress in different countries (Havas, 2012).
The environmental activities of the company firstly include measures to maintain the ecological production of the clothing, shoes, handbags, accessories. Secondly, River Island attempts to use the technologies that absorb limited natural resources. The increasing use of alternative energy sources and environmentally friendly packaging materials is supported by the River Island. The biodegradable packaging is easily recyclable and does not harm the environment. The environmental initiative is widely supported by any global company, because it is one of the requirements for international development (Harrison, 2013).
The legislative aspect of the River Island includes consideration of the norms of both international and local laws of the countries where it sells the products.
The SWOT – TOWS Analysis
The constant threat to the global trading business is the competition, both existing and potential. Using similar technology, competitors threaten River Island with the diversion of the customers. Nevertheless, such threat may be the impetus for creative marketing activities of the River Island. The additional threat is the change in reputation, the possible failure of collaboration with popular designers, and frequency of the new fashion collections. However, it may contribute to the diversification, expanding the range of other market segments (for example, clothing for pregnant). Moreover, threats can be brought from the electronic stores of competitors; thus, it creates the opportunity for the site improvement. The suggested enhancement includes creation of the review system, the supplement with multimedia, and podium broadcasting.
The weaknesses of the River Island are characterized by the absence of the required goods categories in the assortment of the company. There is also a lack of the common sizes of the clothing. Nevertheless, the broad stable opportunities provided by the suppliers and fashion houses help fill the gap. The irrational location of the goods in the stores of the River Island can mislead the consumers. However, the existence of the numerous product groups and the emergence of children clothing market strengthen the company position and increase the market share (Gupta, 2011).
The Trade Distribution Process
The trade distribution process of the River Island has a large scale. The distribution of the goods is carried out by the trading network consisting of the major retail stores around the world. The largest country-wide distribution is in the Great Britain. The River Island improves the system of trade distribution, continues to expand, uses franchising and the Global Distribution Complex. The expansion measures and the development of perspective logistics strategy together with the advisory group will achieve the further growth of the River Island.
The functioning of the global trade companies in the markets of different levels saturates retail clothing, shoes, and other items with fashion. As any global company, the TopShop and the River Island are characterised by the strengths and weaknesses, and their activity is inextricably linked to the emerging opportunities and threats. At the same time, the commercial success and the current trends of the trade development provide the undeniable opportunities for growth and expected efficiency (Day & Reynolds, 2011).