The international expansion strategy of Striyah in Poland

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

This work project provides analysis and evaluation of Striyah’s expansion strategy to enter the Polish market. Methods of research include online and live surveys conducted on the sample of 200 Polish customers, analysis of Central Statistical Office reports, Information and Foreign Investment Agency website, websites of fashion industry companies present in Poland, reports of Jones Lang LaSalle, Colliers International, Ober Haus as well as cooperation with Striyah representatives and other sources. Striyah is a registered fashion trademark in a portfolio of a Portuguese company - R&P Import - Export Ltd. The company’s designers create new collections combining the latest fashion trends with their own vision. R&P clients are mainly young and middle – aged men and women. The company’s offer combines clothes, shoes, handbags and accessories like earrings, necklaces and hairpins. Since its foundation in 1996 R&P has been steadily boosting its annual revenues to achieve €1.47 million in 2010. The two major business layers include wholesale and retail activity. R&P sells its products to around 25 multi brand stores across Portugal, 5 international brands and via its own retail chain in Lisbon consisting of 4 Rep design brand shops. The vision of Striyah is to become a recognized brand all over the world offering high quality, stylish products at a reasonable price. As the fashion market in Portugal is highly competitive due to the presence of well recognized international brands and their scale of business as well as the recent financial crisis, the management team plans to expand the R&P’s business operating area to boost the competitive advantage and explore other markets opportunities. The new venture is focused on the opening the R&P fashion stores in Poland under the brand – Striyah. The major areas of this work include new business opportunity description based on Polish market analysis and a review of major competitors as well as an expansion plan providing a preliminary entry mode, marketing strategy and financial plan. Poland offers a lot of opportunities for the entrant due to big consumer market and positive GDP growth trends. The echoes of the recent crisis in 2009 are fading. The recovery period Poland faces nowadays is a great opportunity for Striyah to negotiate the rent terms. Moreover, as the consumer demand is reviving, it should be the appropriate time to start launching the marketing campaign to raise brand awareness. Striyah plans to enter by opening 5 stores in different cities within one or two years. After establishing this initial retail chain, the company considers opening its headquarters and warehouse in Gdansk seaport, where the goods would be delivered. The most important part of the business plan are the financial projections which are very positive and determine return of the invested capital within one year. The net present value of the initial investment and discounted cash flows in 5 year time perspective remain positive for all the period. Due to such an optimistic forecast, Striyah should definitely consider its international expansion in the Polish market, following its vision of structuring a recognized retail chain and heightening the market share. R&P resources and experience in the fashion business could unquestionably influence the success of investing in Poland. The company’s key advantages include the motivation and skills of managers, long – term relations with suppliers, the team of talented designers, the existing infrastructure and distribution channels. The financial analysis provided by this business plan results in an optimistic forecast for the five – year – long investment period. NPV of the venture amounts to € 481 760 and the ROI equals 133,6%.