Geox - bric countries analysis


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Geox - bric countries analysis

  1. 1. China • Geox entered the Chinese market in 2003 by a partnership with Aokang which was responsible for distributing Geox's products in the country. • In 2008 Geox chose Belle as its new distributor and again last year by announcing its partnership with Riqing Enterprise. • Geox’s chairman and founder Polegato said those were the moves the company had to make in order to adhere to its development strategy at different stages. • Geox has set up a direct-operated company, being responsible for opening direct-operated stores in Beijing, Shanghai and Tianjing. • 36 direct-operated stores in China and it plans to open a flagship store in, the business-to-consumer platform within China's largest online retailer Taobao.
  2. 2. • The fabric market is • owned and supported by the Shaoxing government. • together Shaoxing-the county's gross production value totaled US$5.8 billion, gross domestic product per capita totaled US$8,000. There are more than 3,500 permanent overseas purchasers and more than 700 permanent overseas representative agencies still mostly unknown in •Male-female ratio the Western world. disparity from sex•Textile products are selective abortion and sold to virtually all other problems Chinese regions and associated from the whole world. the One-child policy. •China's textile industry more and more is •Aging of population due to one child policy. developing machines that are locally made and/or assembled, and the country's bank system is willing to support those types of investments. •the textile industry in China is taking care of subjects such as power consumption and quality, and they are starting to raise issues such as "go green”
  3. 3. Why not in China? • China’s economy has continued to grow by double-digit rates over the last couple of years however China is in no way a uniform and homogenous market socially and economically • Uneven rates of economic growth • Economic and social differences between different provinces • Foreign companies should think carefully about which geographical location offers the best vantage point to target the broader China market. Zheijiang province is the most suitable for apparel and textile industries.
  4. 4. If one chooses China…
  5. 5. Geox in India • Geox has signed an agreement with G & B Footcorp, based in New Delhi, which has to open at least five stores in India by the end of the fiscal year. • the goal of the next three years is the presence with twenty stores. • To be immediately in the major cities. • India is a supplier of components for footwear, for a total of 8% of its employment.
  6. 6. P • E • The biggest democracy in the World. • Federal republic. • Based on English common law. • • Separate personal law codes apply to Muslims, Christians, and Hindus. Stable political situation . • • • Disinvestment was carried out in case of many public sector industrial enterprises. • Policy towards foreign capital was liberalized. Well developed tax structure. India Govt makes some Act to freely do business in India. The Government reduced the number of industries under compulsory licensing to six. • • The GDP $4.716 trillion (2012 est.). Continuous growth in per capita income S T •The population has been ageing increasing for the costs for firms who are committed to pension payments. •3G technology starts. •India is the second most populous nation in the world with an approximate population of over 1.1billion people. •many Technological Projects. •big market in mobile sector.
  7. 7.
  8. 8. Geox in Russia •In Russia,in recent years it has grown very well-being, opening up interesting areas for Italian firms, able to grasp all the opportunities available •Dmitry Sevyan, Russian entrepreneur - he entered into a contract for exclusive GEOX products distribution in Russia in 2005 .opened more than 60 GEOX outlets in Russia, not only in Moscow and Leningrad, but also in Siberia, where today there are many shopping centers in European style •Geox has imposed targeted products, obtained thanks to the careful work of technicians and engineers who work in the Office Research that has been able to adapt the characteristics of the products to the needs of the Russians, offering a waterproof shoe not only in the highest part to walk without getting wet in the snow or on ice •Geox offered Sevyan another distribution contract in 2009 with worse terms. Their cooperation then ceased and Sevyan offered to provide the outlets to Geox S.p.A. in exchange for compensating his costs. • Also In 2009, the Russian market has suffered the negative effects of the crisis, registering a decline consumption: Italian exports to this market have decreased, although "Made in Italy" maintain a quality far superior to that of the local productions: this competitive advantage Italian companies could still work very hard to translate into an advantage economically.
  9. 9. P • Financial bailout (+) • Russia-Ukraine gas dispute (-) • Russia Georgia conflict (-) E • S T • • • Large territory • 3G technology (+) Increasing purchasing power – middle class • Storage Virtualization (++) • • • • Decreasing oil prices (-) Blade Servers (++) • Alternative energy storage (+) • Transformer-less (+/-) • Modular and Scalable Solutions (+/-) Financial breakdown (-) Falling GDP growth (-) Fall in industrial production (-) Decrease in raw material costs (+) • • Highest number of billionaires after United States High literacy rate. Skilled people in medical, space, aviation, mathematical and scientific fields.
  10. 10. Why invest in Russia? • 1)Dynamic Economic Growth - Since 2000 to 2010, Russia’s GDP growth has averaged 5.3% per year, including the 7.8% fall in 2009 • Russia economic growth potential is based on growing labor force (140 million citizen and growing) and labor efficiency , Total Factor Productivity and Capital Stock
  11. 11. 2) One of the Largest Consumer Markets + with rising disposable incomes + expanding middle class (+ the status symbol that attached to Italian products in eyes of Russian people) = high local profit maintain. 3)World-Renowned Human Capital - Russia offers access to a skilled and welleducated human resource pool, letting companies recruit where they work. 4)Unique Geographic Position Russia links Europe with Asia and also borders the North American continent, offering the following advantages: • Worldwide sea routes — Russia is bounded by three out of four world oceans • Russia launches major Infrastructure Program for 2018: The infrastructure program includes 11 airports, communal and transport infrastructure necessary for FIFA World Cup, and electricity, IT and communications infrastructure. • Russia’s geography facilitates building effective international and domestic supply-production-market chains. • Geographically diverse federal districts and regions offer distinct competitive advantages and favorable investment-attraction policies.
  12. 12. 5. Stable Political System : Following a transition period, the Russian economy has achieved macroeconomic and financial stability: Strong macroeconomics: - World's 7th largest economy by purchasing power parity (2010) Politically stable system: - Long period of prudent economic and social policies - Respectful and fair foreign relations policy 6.Extensive Government Support - Public-private partnership programs - Existing infrastructure, large investment and development programs - New institutional instruments: Development Bank of Russia, Investment Fund of Russia, Russian Special Economic Zones, Russian Venture Company, Industrial Assembly 7. Attractive Taxation System :With ongoing improvements, as well as a policy of resolving contradictions and ambiguities in tax legislation in favor of the taxpayer, the tax system is becoming increasingly oriented toward the investor.
  13. 13. Why not? • The main labor force in russia is located outside the big cities such as moskow and st. pitsburg. • • Russia is amongst the countries with a great number of roads, but the state roads there stands far behind than that in leading countries Knowledge of distribution channels in Russia remains a big barrier, and many times the biggest barrier, to success for investors who can't access their customers • Language barriers often make having a Russian representative essential • Many of the inefficiencies in the government apparatus can be attributed to high levels of corruption. Some argue that corruption has become engrained in the country’s system of wealth creation and distribution • Russia’s economy relies heavily on its energy sector for economic growth, with an extremely tight correlation between oil prices and the country’s GDP.
  14. 14. GEOX IN BRAZIL • In 2006, Geox opened the first two stores in Brazil: in Sao Paulo and in Alegre. • Brazil ist considered one of the company´s best strategic market for Geox, as 25% of the 2011´s sales has been made in Sao Paulo. • Geox operated a huge outsoruce, basing most of its manufacturing activity abroad, expecially in Brazil, in Vietnam and in China. • From a brazilian point of view, Geox is considered a very positive brand. Indeed, it was chosen to wear the most prestigious World Champions: the Golden Shoes are the special boots (in limited edition) which Sebastian Vettel wore in the Sao Paulo GP. Those boots contained a very high level of technology innovation, being the first transpiring driving shoes.
  15. 15. P • political stability • Infrastructure development program E • • S Pest Brazil economic growth one of the more stable and prosperous countries in Latin America. • the fifth largest population in the world. • regional economic disparity. • high crime rate • GDP of US $2.47 trillion in 2011 • one of the more favorable destinations for investments in various sectors such as energy, automotive, retail, and construction. • the ninth largest economy on the Pourchising Power Parity (PPP) grid. T • natural resources • the fastest-growing economy in Latin America. • the largest number of sectors open for Foreign Direct Investment (FDI). • strong work force • Brazil will host two huge sport events, such as the World Cup in 2014 and the Olympic Games 2016 • Government funds the majority of scientific research. • the largest IT industry in Latin America
  16. 16. POSITIVE FACTS ABOUT BRAZIL • Brazilian economy is the most developed in South America and the 5th in the world. It has been growing enormously throughout the last years. • It has the most successful industrail district for the mocassini´s production in the world. • Brazil is the 5th most populated State in the world (201 million habitants). • 90% of the population lives in urban areas, which are located near the cost. This allows an easy access to the city industries through the many ports. • Its geographical position allows good connections with other south-american States.
  17. 17. DISADVANTAGES OF OUTSOURCING TO BRAZIL • High taxes and regulatory costs. There is not a return in services from the government. Brazil companies pay 29% more in taxes than the Latin America average and 24% more than the OECD countries average. • Inadequate infrastructures and government burocracy  difficult access to loans, unclear governmental policy-making, low quality in public transportation. • High cost of hiring and firing human resources. • Brazil has several laws and legal protection on privacy and copyright, but the enforcement is not stringent. A lot has to be done for what concerns the intellectual proprety protection.
  18. 18. Conclusions China • Geox already produces in China (Geox already produces 100% outsourcing), • Favourable geographic conditions, • High qualified workers with low labour costs compared to other BRIC countries, • D&R activities useful for delocalized production, • Raw materials available at low price • No role of trade unions • Economic policies towards the opening of the market