Country Road has been an iconic Australian brand for 36 years, building its success on its high quality and unique designs that look effortlessly casual yet stylish. Following the high financial performances of their Australian stores, Country Road decided to embark into the United States of America (US) in 1989, in hope of realising the financial gains they saw here. Unfortunately, their strategies didn’t work, and they found obstacles which hindered their success in the US. This essay examines the types of strategies Country Road has pursued and what led Country Road to follow an international expansion strategy. Further, we discuss the impediments to Country Road succeeding in the US retail market, before suggesting strategy options for
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For example, the US has large market size with rapid market growth rate as well as high profitability when Country Road started its globalization. Another reason is the core competencies that the firm holds. Not only does the firm have unique architecture and layout of its stores, it also have strong brand image as Australian fashion and produces quality products compared to other firms. During that time, the Australia tourism campaign was aggressively promoting Australian lifestyle and Australian movies received good reactions from foreign countries. With the increasing interest of foreigners in Australia, this gave an advantage to the firm in marketing their brand and products in foreign countries.
One of Country Road’s key competencies was in real estate; their unique layout and design differentiated themselves from key competitors, and their locations were situated in popular shopping malls (Kerr & Sarina, 2006). However, Country Road failed to conduct research into its competitors, and how they should have positioned themselves, in relation to the fierce competition that existed. Firstly positioning themselves as a premium product, fierce rivalry among competitors forced them to move down into the middle market (Spadafora & Majumdar, 2011). Conversely, this move proved even more competition existed, and Country Road was forced to lower its prices which in turn damaged their image of high quality (Spadafora & Majumdar, 2011).
One factor that