Bestseller - Facing a New Competitive Landscape in China (Simplified Chinese version)
(9 pages of text)
In the fall of 1996, Bestseller became one of the first international fashion companies to enter the Chinese retail market. Earlier that year, two good friends, Allan Warburg and Dan Friis, had made contact with the CEO of Bestseller A/S, Troels Holch Povlsen, regarding the prospect of selling Bestseller brands in China, where they felt there were many business opportunities. Holch Povlsen found himself believing in the two entrepreneurs, and was convinced by their enthusiasm for the Chinese market. They quickly proved that they had been right about China. A little more than a decade after the first store opened, Bestseller China had almost 2,000 stores, and accounted for more than one-third of the total turnover of Bestseller A/S. The secret to Bestseller China's extraordinary success was its ability to sell price-competitive European designs with a Chinese touch, which was achieved by locating all production in China and modifying Bestseller A/S's designs to suit the size and tastes of Chinese middle-class consumers. With a 10-year head start over potential competitors, by the end of 2007, Bestseller China had managed to establish a strong presence in China. However, the high economic growth and the growing middle class were making the Chinese market highly attractive for other companies. Although global giants, such as Zara and H&M, were devoting big chunks of their budgets to entering China and capturing market shares, these aggressive new entrants were not Bestseller China's biggest concern. In fact, the competition from local companies was seen as the real threat.
Although the case can be used for a broad range of subjects, the international dimension of the case remains the central topic in the case as it focuses on a Danish company entering a Chinese market. For instance, marketing and strategy topics such as how a foreign company should successfully enter the Chinese market and how it should market itself are central to the case. Moreover, topics relating to international management are relevant to the case. Discussions could include the challenges of a Danish company operating a very big Chinese subsidiary or the operation of franchising versus owning stores.
China, Large, 2007
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