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FOR

Lee Adams

FROM

Mohamed Al Mahroos

REPORT ON INTERNATIONAL COMPETITIVENESS AND BUSINESSES
1

INTRODUCTION

This report will analyse the key factors affecting international competition related to
two companies and provide a comparison of the main international strategies
currently being adopted by the two companies
...
A company may sell
other products, but their main concentration will be on their best performing goods
...
Both brands have worldwide attractiveness (Appendix 2, p
...

After the acquisition of Early Learning Centre, Mothercare had two brands,
Mothercare and Early Learning Centre, both of which are well established brands
that share the same purpose and focus on selling products to children and parents
...
With a good image it will be easier to
open stores in other countries and sales are almost certain because Mothercare has
loyal customers around the world
...
In the same year, their reported international sales had increased by 17
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4 million, and their international retail sales increased by 15
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5
million (Appendix 4, p
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6)
...

Expansion
Mothercare plc is a multinational company that operates in Europe, Middle East,
Africa, Asia, Australia, and the Far East
...
Mothercare offer a huge range of products for
example children’s clothing, bedding, home furnishing, bathing equipment, and toys
...
Mothercare and Early Learning
Centre (ELC) are well-known brands with similar purposes, thus in 2007 Mothercare
took over Early Learning Centre (Appendix 2, p
...
With this acquisition Mothercare
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Mohamed Al Mahroos

and Early Learning Centre can share skills and knowledge to develop a deeper
understanding of the market and improve products leading to higher sales revenue
...
1 million and in 2007 it reached £87
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1)
...

Franchise is a legal right for another business to manufacture, sell, and market
products from a company in a certain place
...
In 2006, Mothercare and
ShopperStop have reached a franchise agreement to operate stores in India
(Appendix 9)
...
Also, the franchisee has a better understanding of
their own market than Mothercare, thus Mothercare spends less time and effort on
studying the market
...

A joint venture is when a business works with a partner to pool resources and
develop business opportunities
...
Goodbaby International Holding’s annual sales
exceed £237,000,000 meaning the business in China has significant potential
(Appendix 8)
...
Also,
companies venturing together can share skills and knowledge leading to more
understanding of the customer needs and market
...
This can be done by using intermediaries such as retailers or
directly selling the product
...
1)
...
1)
...
Selling internationally gives
Mothercare the opportunity to increase their sales and profit
...

Mothercare are trying to meet and anticipate customer needs by group sourcing their
products that they sell internationally (Appendix 2, p
...
They do this by placing
employees in the important countries they operate in (Appendix 2, p
...
Mothercare
have financed sourcing and supply chain operations heavily in Shanghai, Hong
Kong, Bangalore, Singapore, and the United Arab Emirates so they can fulfill and
understand customers’ requests and needs (Appendix 2, p
...
Supply chains usually
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Mohamed Al Mahroos

consist of manufacturer, wholesaler, retailer, and customer
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4)
...
Their supply chain partners assist them to deliver
their products to global stores where the products are sold to consumers (Appendix
2, p
...
Internationally, Mothercare had generated £570
...
1)
...
It was founded in 1993 by Richard Harpin
...
Expansion is an international strategy used by
businesses to increase the amount of stores by entering new markets
...
Internal expansion includes marketing,
spreading the risk, wholesaling, and many more
...
Reasons to expand are becoming
less dependent on one product, increasing capital, increasing sales revenue,
increasing customer numbers, and access to more customers
...
A joint
venture is when a business works with a partner to pool resources and develop
business opportunities
...
In 2001, Homeserve established Domeo which is a joint venture with
Veolia
...

In 2009, Domeo sold approximately 1,600,000 policies and in 2010 they have sold
nearly 1,900,000 policies (Appendix 5, p
...
In 2011, Homeserve fully acquired
Domeo and this allows Homeserve to have full control over Domeo
...
Domeo’s operating profit has
increased by 44% to £8
...
2)
...
This acquisition has helped Homeserve in
spreading the risk where if they fail in one market they can make it up in the French
market
...
In 2010, Homeserve acquired National Grid Energy Services’ service
contract business which provides heating, cooling, and water heater services to
customers in four North US states (Appendix 1, p
...
This acquisition provides
Homeserve with more customers leading to more sales and profit
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6 million to 0
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8 million to 1
...

Marketing
Marketing is one of most effective and vital international strategies
...
Businesses
use marketing to attract customers, increase public awareness of their product, and
create brand loyalty
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Homeserve, with this agreement,
have access to more customers and can take advantage of National Grid’s wellknown brand name which is likely to increase sales
...
4
million policies and the retention rate was at a high 83
...
Before Homeserve
entered the marketing contract with National Grid they had 600,000 customers, and
by 2011 that number reached 900,000 (Appendix 10)
...
They also used the brand name of
Veolia Environment to increase sales; this method had proved to be effective where
the retention rate in France is 88
...
24)
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2)
...

Homeserve have been using different names in some new markets where in France
their names are SFG and in Spain their name is Reparalia (Appendix 1, p
...
This
shows that Homeserve have studied the markets they entered and had an
understanding that there may be language difficulties in the new market
...
Types of direct marketing are emails, direct mails, and personal selling
...

Focus on Core Brands
Focusing on core brands means selling and focusing on the bestselling products
which will give Homeserve the ability to specialize in what they do best, thus aiding
in increasing revenue
...
5)
...
In 2009, Homeserve acquired SFG (France) which is an electrical
warranty provider (Appendix 6)
...
This shows that their business model is transferable to
other markets and they sell similar products in all its markets (Appendix 1, p
...

Focusing on core brands helps Homeserve to be specialized and by being
specialized they offer more knowledge that leads to customer convenience and
brand loyalty
...
25)
...
Their strong brand
name also helped in increasing sales
...


Mothercare plc and Homeserve plc are multinational companies that use
international strategies to enter and establish themselves in new markets
...
Both firms
use these international strategies to gain their benefits
...
In 2007, Mothercare bought Early Learning Centre and they have
franchises and joint ventures in many countries such as China and India
...

Homeserve mainly uses joint ventures and acquisitions where they have acquired
Domeo (France), SFG (France), Reparlia (Spain), and National Grid Energy
Services’ service contract business (USA)
...
Expansions by
Homeserve have led to increases in customer numbers, sales figure, operating
profit, and the retention rates are quite high
...
Focusing on core brands enhances the firm’s image and the extra
knowledge may lead to customer convenience and brand loyalty
...

Both Homeserve and Mothercare invested significantly in international strategies
...

Homeserve used affinity marketing to market their products and used different
names and in different countries due to language barriers
...
The high retention rates, increasing sales turnover, and profit prove that
their marketing strategies are working
...
Mothercare used
distribution chains to decrease transportation costs and to make delivering the
products easier and simpler
...
Mothercare and
Homeserve used focused on different strategies (Distribution chain and Marketing)
because Mothercare produces goods and needs to export them to international
markets; however Homeserve offers home emergency service which does not
require distributions chains
In conclusion, both companies have benefited from the international strategies they
use and the figures prove that
...
Mothercare needed to invest in distribution chains to export their
products
...


SIGNED ……………………………………
DATED

23 April 2012

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Mohamed Al Mahroos

Bibliography:
Homeserve:
1) http://www
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co
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homeserveplc
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homeserveplc
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chinadaily
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cn/business/2011-02/21/content_12049603
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business-standard

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