Bachelor Thesis – BI Norwegian Business School International Marketing University of Mannheim Håkon Sund Nor Nils Ove Håland Riise Carl Mikkel Kollerøy Foss Espen Froestad Supervisor Isabell Sieberz 06.06.2015 “This paper is done as a part of the undergraduate program at BI Norwegian School of Management. This does not entail that BI International School of Management has cleared the methods applied, the results presents, or the conclusions drawn” Acknowledgements We would like to thank the staff of Dressmann and Varner Group for giving us the opportunity to write about the company, and assisting us with information during the project. A special thanks to Frank Lehne from Dressmann Norway and Michael Otto from Dressmann Germany who provided us with valuable information and assistance throughout this process. We would also like to thank the participants in our survey. Finally, we would like to thank Ms. Isabell Sieberz (Lehrstuhl für Business-to- Business Marketing, Sales & Pricing, Prof. Dr. Dr. h.c. mult. Christian Homburg) for being our supervisor and mentor throughout the entire process and providing us with her expertise. Mannheim, June 7, 2015 ______________________ ______________________ Carl Mikkel Kollerøy Foss Espen Froestad ______________________ ______________________ Håkon Sund Nor Nils Ove Håland Riise i Executive summary Dressmann AS is a Norwegian fashion retailer that is established in several markets, including Germany. Dressmann is currently represented in Hamburg, where they have two stores, and a Dressmann XXL. Dressmann have tried expanding in Germany once before, but this was not successful, mainly because of little knowledge about the German market. The objective of this thesis is to figure out how Dressmann can continue to expand in the German market successfully, and what their competitive advantages are. In order to get the relevant information, to reach this objective, we have conducted an external analysis, an internal analysis and a survey. These findings are summarised in a SWOT analysis. To conduct these analyses we have put in use relevant theories and models for Dressmann´s situation. Through our analysis, we found that the German market represents good possibilities for expansion, but it is important to take the geographical structure into account. ii Table of Contents List of Figures: .................................................................................................................... iv 1.0 Introductory Chapter ............................................................................................... 1 1.1 The Scope of the Thesis ..................................................................................................... 1 1.2 Objective .............................................................................................................................. 1 1.3 Problem Definition ............................................................................................................ 1 1.4 Research Limitations ........................................................................................................ 1 1.5 Research questions ................................................................................................................ 2 2.0 Dressmann ................................................................................................................... 4 3.0 Methodology .............................................................................................................. 6 3.1 Introduction ............................................................................................................................ 6 3.2 Research aim and questions ................................................................................................ 6 3.3 Research design ...................................................................................................................... 6 3.4 Data collection ........................................................................................................................ 7 3.5 Survey findings ....................................................................................................................... 7 3.6 Qualitative research ............................................................................................................ 10 4.0 Internal Analysis ..................................................................................................... 12 4.1 Competitively Important Resources and Capabilities ................................................. 12 4.1.1 The Competitive Power of Dressmann’s Resources ................................................... 13 4.2 The Bakka Model ................................................................................................................. 14 4.3 Internationalisation process .......................................................................................... 16 5. 0 External Analysis .................................................................................................. 20 5.1 Introduction – German men’s fashion market ............................................................. 20 5.2 PESTEL ................................................................................................................................. 20 5.3 Competitor analysis ............................................................................................................. 24 5.4 Porter’s Five Forces ......................................................................................................... 27 6.0 SWOT ....................................................................................................................... 31 7.0 Strategy .................................................................................................................... 33 7.1 Strategic Problem Definition ............................................................................................. 33 7.2 Operative and strategic objectives ................................................................................... 33 7.3 Segmentation ........................................................................................................................ 33 Segmentation Criteria ......................................................................................................................... 33 7.4 Positioning ............................................................................................................................. 34 7.5 Expansion Strategy .............................................................................................................. 36 7.6 Place ........................................................................................................................................ 37 7.7 Product .................................................................................................................................. 46 7.8 Promotion .............................................................................................................................. 47 7.9 Price ........................................................................................................................................ 50 7.10 People ................................................................................................................................... 51 7.11 Critical success factors ..................................................................................................... 52 8.0 Conclusion ................................................................................................................... 54 Affidavit .............................................................................................................................. 56 Bibliography ...................................................................................................................... 57 Electronic Sources: .................................................................................................................... 57 Appendix 1 ................................................................................................................................... 60 Appendix 2 ................................................................................................................................... 66 Appendix 3 ................................................................................................................................... 75 iii Appendix 4 ......................................................................................................................... 78 Appendix 5 ......................................................................................................................... 79 Appendix 6 ......................................................................................................................... 80 Appendix 7 ......................................................................................................................... 81 Appendix 8 ......................................................................................................................... 83 List of Figures: Figure 1: Research Process Model Figure 2: “Where would you buy the following clothing?” Figure 3: “When buying clothes, which of the following factors are more important?” Figure 4: VRIO Framework Figure 5: Internalisation Process Figure 6: Offline sales vs. Online Sales Figure 7: Porters five competitive forces