Arcadia Group - Strategic Analysis
ARCADIA GROUP – EXPANSION IN ASIA
Owing to their thriving economies, the world today is viewing Asian markets with a new found awareness and interest. Led by China and India, South East Asian countries are coming into their own, and proving to be attractive destinations for major global retailers to expand their market share. After conducting a strategic analysis of the Arcadia Group, it became clear that in order to maintain its distinctiveness and profitability, the company needs to tap into the opportunities presented by the emerging markets.
The retail industry in the Eurozone is in the mature stages. Arcadia Group already has an exhaustive presence in the UK; its brands are present on virtually every high street and shopping centre in over 2000 stores nationwide. Most of its brands are market leaders in their categories (Arcadia Group.2010). However with the UK markets now saturated, the question of ‘what next?’ seems to be lurking. The owner of Arcadia Group Sir Philip Green, who some would call a visionary in the field of retail, is most definitely looking eastwards.
The economic downturn was a tough wave to ride for most retailers. It is becoming increasingly clear that there are noteworthy differences in the pace and nature of the economic recovery taking place in Europe and Asia. According to a report by CB Richard Ellis, the recovery in the European economy as a whole remained sluggish while the Asian economies reported positive export growth in the first quarter of 2010. Many retailers are looking to expand into the emerging markets of the region which are seen as having good growth prospects. Retailers showed a greater inclination to commit to new premises for business expansion and an increased leasing activity was recorded in key shopping areas in major cities. Fast fashion and F&B chains remained the major drivers of demand. (CB Richard Ellis. 2010)
Both India and China are increasingly becoming very attractive retail investment
Owing to their thriving economies, the world today is viewing Asian markets with a new found awareness and interest. Led by China and India, South East Asian countries are coming into their own, and proving to be attractive destinations for major global retailers to expand their market share. After conducting a strategic analysis of the Arcadia Group, it became clear that in order to maintain its distinctiveness and profitability, the company needs to tap into the opportunities presented by the emerging markets.
The retail industry in the Eurozone is in the mature stages. Arcadia Group already has an exhaustive presence in the UK; its brands are present on virtually every high street and shopping centre in over 2000 stores nationwide. Most of its brands are market leaders in their categories (Arcadia Group.2010). However with the UK markets now saturated, the question of ‘what next?’ seems to be lurking. The owner of Arcadia Group Sir Philip Green, who some would call a visionary in the field of retail, is most definitely looking eastwards.
The economic downturn was a tough wave to ride for most retailers. It is becoming increasingly clear that there are noteworthy differences in the pace and nature of the economic recovery taking place in Europe and Asia. According to a report by CB Richard Ellis, the recovery in the European economy as a whole remained sluggish while the Asian economies reported positive export growth in the first quarter of 2010. Many retailers are looking to expand into the emerging markets of the region which are seen as having good growth prospects. Retailers showed a greater inclination to commit to new premises for business expansion and an increased leasing activity was recorded in key shopping areas in major cities. Fast fashion and F&B chains remained the major drivers of demand. (CB Richard Ellis. 2010)
Both India and China are increasingly becoming very attractive retail investment