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Description

This is a project about Bath and Body Works.You can look at what other people are doing in other sections, and write a similar thing for section 3. Please write about four pages. Read the requirements in the Word document carefully before you start writing. Thank you!

SECTION
III: ENTRY STRATEGY

Develop a recommendation for an entry strategy
(first step) to the foreign country market.

Justify your recommendation based on both the
characteristics of the market and the source of transferable capabilities.

Amanda mentioned the most common entry mode is LLC?

Paper Instructions
choose an existing company and develop a plan to launch this company’s products in a country where
they are not yet available. You will need to show that the product can be launched successfully and will
be at least minimally profitable.
The following outline has been provided as a sample structure for your group project. Feel free to
modify it where necessary to fit the specific context of your company and market.
Bath and Body Works in China
SECTION I: PROFILE OF COUNTRY MARKET
This section involves an overview of your country market (i.e., the country you will study for entry):
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Describe the country market you are analyzing.
Characterize this country market in terms of size, historical trends, growth forecasts,
etc.
What are the different customer segments in this market? A thorough analysis of all the
existing, emerging, and potential customer segments in this market is essential to a
sensible and creative market space entry.
Describe the competitive structure within this market. What is the total number of
competitors? Describe the competitive positions of the major players. Who are the
leaders/challengers/followers/niche players? Why? What are their positions (including
advantages and disadvantages)?
What recent trends (e.g. economic, demographic, psychographic, others) have affected
this market?
What marketing opportunities do such market shifts suggest?
What are the cultural and legal differences? What are the important ethical and civic
awareness considerations? Note that ethical issues can often be very complex leaving
firms to wonder what is the “right” thing to do. Also remember that firm actions
overseas affect its reputation worldwide, not only in specific country markets. Issues
raised in this section need to be further addressed when you develop the strategy
below.
SECTION II: DESCRIPTION OF COMPANY’S TRANSFERABLE CAPABILITIES
●
Based on your understanding of the company’s strengths and weaknesses, what do you think
are the company’s firm-specific advantages?
●
●
●
Justify why these sources of advantage/capabilities are transferable to the chosen country
market.
How will competitors respond? Does the company have sustainable competitive advantage?
SWOT
SECTION III: ENTRY STRATEGY
●
●
Develop a recommendation for an entry strategy (first step) to the foreign country market.
Justify your recommendation based on both the characteristics of the market and the source of
transferable capabilities.
Amanda mentioned the most common entry mode is LLC?
SECTION IV: INTERNATIONAL MARKETING STRATEGY
In this section, you need to develop a full marketing strategy (after entry, how will the firm continue) for
the foreign country market. This marketing strategy should include:
●
●
●
●
Definition of target segment.
Definition of positioning statement.
Development of recommendations for all the elements of the marketing mix: product,
price, communication mix and distribution.
Estimates of sales, costs and profits.
WRITING AND REFERENCES
This is not simply a report containing facts about a company and market. Looking at the outline above,
it should be clear that you will be analyzing a business and drawing conclusions about what is and is not
important, how this firm can succeed, and how this market will develop in the future. As a group, you
will become experts and, as such, you need to be able to do more than simply discuss what is
happening.
It is important, when writing this paper, to be as factual as possible. In other words, please use
numbers, percentage growth rates, etc. as well as tables and charts. Also, you must cite each article or
book used. It is not necessary to use a formal citation style, but clearly indicate:
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Article name, date and where published including page number
Book name, authors, publisher and year
Link for websites used, including a brief annotation describing the website to
demonstrate that this is a valid and reliable source.
Any fact that is not obvious to everyone (e.g., the sun rises in the east) must be referenced. If you state,
“car sales in China are up 10% over last year” then you must add something like (BusinessWeek, May 21,
2019, p. 51).
Wikipedia is absolutely not appropriate as a reference because it is user-generated content.
_________
SECTION I: PROFILE OF COUNTRY MARKET
1. Describe the country market you are analyzing.
❖ China is in the Eastern part of Asia, bordering the East China Sea, Korea Bay, Yellow Sea, and the
South China Sea.
❖ China’s natural resources are coal, iron ore, helium, petroleum, natural gas, arsenic, bismuth,
cobalt, cadmium, ferrosilicon, gallium, germanium, hafnium, indium, lithium, mercury, tantalum,
tellurium, tin, titanium, tungsten, antimony, manganese, magnesium, molybdenum, selenium,
strontium, vanadium, magnetite, aluminum, lead, zinc, rare earth elements, uranium,
hydropower potential (world’s largest), arable land.
❖ Because of China’s population, roughly 806.5 million inhabitants are in the workforce, so the
economy is doing well.
❖ China prioritizes international trade, which accounts for a large percentage of China’s GDP. It is
also the largest exporter of merchandise.
❖ China has the largest middle-class consumption market.
❖ Since 1978, China began to open up and reform its economy, China’s GDP has averaged growth
for almost 10% a year. Also more than 800 million people have been lifted out of poverty.
During the same year China has significant improvements in access to health, education, and
other services.
❖ China is known as the factory of the world and is now the world’s second largest economy.
❖ China is the world’s largest producer of concrete, steel, fertilizer, clothing and toys.
2.
Characterize this country market in terms of size, historical trends, growth forecasts, etc.
❖ Population 1.39 billion people (2019 est)
❖ GDP (Purchasing Power Parity) $14.34 trillion USD (2019 est.)
❖ GDP per capita (Purchasing Power Parity) $10,839 USD (2020 est.)
❖ Export $2,499 billion USD (2019 est.)
➢ The main export partner of China is the U.S, accounting for nearly 3.13 million
yuan in 2020.
➢ Exporting partners: European Union, ASEAN, Hong Kong, Japan, South Korea,
India, and Taiwan
❖ Imports $2,134 billion USD (2018 est.)
➢ Partners: ASEAN (2.08 trillion yuan), European Union (1.78 trillion yuan), Taiwan
(1.38 billion yuan), Japan (1.20 trillion yuan), South Korea (1.19 trillion yuan),
United States, and Brazil (2020)
❖ Country comparison to the world: 113 (12,900 per person) per capita
❖ Employment: 774.7million people (2018 est.)
❖ Unemployment: 3.6% (2019 est.) increased to 4.2% in 2020 due to pandemic
❖ Inflation: 2.5% (2020 est.)
❖ Currency: Renminbi (Yuan)
❖ Area: 9.6 million sq km (Third largest country by area in the world)
❖ Geography: 33% of the Chinese territory is mountainous, 26% high plateaus, 19% basins
and deserts, 12% plains regions, and 10% hills.
❖ Language: Mandarin Chinese
❖ China has 56 ethic groups
❖ History: More than 3,000 years

3. What are the different customer segments in this market? A thorough analysis of all the existing,
emerging, and potential customer segments in this market is essential to a sensible and creative market
space entry.
❖ When analyzing market entry into China’s market, we have to be mindful of consumer trends
and interests. The only way there is potential to succeed we must know what people like and
what makes them spend money.
❖ Demographic and geographic segmentation is typical for China’s market.
❖ In China demographic segmentation usually targets a certain income level, dividing customers
into groups by gender, age, income, and other demographic factors.
❖ For example, Lamer and BMW were targeting high-income consumers as potential customers.
And Ikea and Bath and Body Works did not just focus on middle-income consumers as their
central interest.
4. Describe the competitive structure within this market. What is the total number of competitors?
Describe the competitive positions of the major players. Who are the
leaders/challengers/followers/niche players? Why? What are their positions (including advantages and
disadvantages)?
❖ Companies
❖ Joint Ventures
❖ Wholly foreign-owned Enterprise
❖ Private Enterprises
❖ Online outlets/retailers
❖
5. What recent trends (e.g., economic, demographic, psychographic, others) have affected this
market?
❖ COVID-19 pandemic, China started 2020 with a decline in GDP of 6.8% which was caused by the
pandemic. Once opening its factories, it has been the only country to keep up with demand,
especially medical supplies and equipment. Even in a moment of crisis, China was able to reopen its factories much sooner than any other country. China is the third-largest trading country
with the United States. It is exporting over 2.5 trillion USD worth of goods in 2019.
❖ China is experiencing shrinkage in population which can amount to future economic and
political crisis due to entering an era of “negative growth”
❖ Trade tension between the United States and China also in regards to China’s “dual circulation
strategy” which indicates they will concentrate on more domestic products and not as much on
their exports which President Xi Jinping stated, “gradually form a new development model in
which domestic circulation plays a dominant role”.
❖ China continues to receive large numbers of FDI (foreign direct investments) downside would be
an aging population and trade surplus doesn’t seem like the greatest or money-saving option.
❖ The level of debt is extremely high which amounts to (335% of the GDP)
6. What marketing opportunities do such market shifts suggest?
❖ For this year and next year, China will be playing catch up but so would every country due to the
midst of the pandemic for now there might not be big growth in terms of consumer spending
but it will increase with time and as people are gradually returning to work.
❖ Consumers increased their e-commerce spending by almost 20% stated Daniel Carnahan.
7. What are the cultural and legal differences? What are the important ethical and civic awareness
considerations? Note that ethical issues can often be very complex leaving firms to wonder what is the
“right” thing to do. Also remember that firm actions overseas affect its reputation worldwide, not only
in specific country markets. Issues raised in this section need to be further addressed when you develop
the strategy below.
❖ China’s legal system is a “socialist legal system” overall following the model of Civil Law.
SECTION II: DESCRIPTION OF COMPANY’S
TRANSFERABLE CAPABILITIES
●
Based on your understanding of the company’s strengths and weaknesses, what do you think
are the company’s firm-specific advantages?
â—‹ Justify why these sources of advantage/capabilities are transferable to the chosen
country market.
○ “Unlike Victoria’s Secret, they’ve been following more of what’s happening in the retail
market and what trends consumers are interested in,” Jessica Ramirez, retail research
analyst at Jane Hali & Associates said.
â—‹ https://www.modernretail.co/retailers/as-it-prepares-for-life-as-an-independentcompany-bath-body-works-lays-out-its-plan/
●
●
How will competitors respond? Does the company have sustainable competitive advantage?
â—‹ http://cosmeticschinaagency.com/top-leading-cosmetics-brands-in-china-and-fullstrategy-analysis/
â—‹ Chinese Cosmetic trends 2020
â–  Natural and green cosmetics (BAD FOR BBW)
â–  Male grooming – one of target markets
â–  Digital strategy – aka influencers and social media, AI
Bath and Body SWOT
â—‹ https://www.mbaskool.com/brandguide/lifestyle-and-retail/15504-bath-a-bodyworks.html
â—‹ Strengths
â–  1. It has an annual revenue of about $3.3 billion
â–  2. It operates about 1640 stores throughout North America and also has
online store
â–  3. Its online store sales grew by 18% in 2014 while the same store sales
increased by 7%
â–  4. It constantly tries to do innovation in its product variety
â–  5. It has a wide variety of personal and beauty care products
â–  6. Very strong parent company in L Brands which is financially very
strong
â—‹ Weaknesses
â–  1. It had unsuccessful promotions of natural care products
â–  2. It has an inefficient supply chain
â–  3. It has low market share as compared to competitors
â—‹ Opportunities
â–  1. It has a huge potential to grow its natural and ecofriendly products
â–  2. Online expansion due to growth of ecommerce
â–  3. Increase in demand from emerging economies
â—‹ Threats
â–  1. Fierce competition in personal and beauty care category
●
●
●
â–  2. Sales are severely affected by the performance of the economy
Competitors:
â—‹ 1. Avon Products Inc.
â—‹ 2. The Body Shop
â—‹ 3. Procter and Gamble
â—‹ Unilever
â—‹ Shiseido
â—‹ Colgate-Palmolive
○ Estée Lauder
â—‹ Amore pacific
■ “According to Qianzhan, foreign brands such as Procter & Gamble
and L’Oréal accounted for approximately 50% of the market share in
the cosmetics industry in China.”
â–  http://cosmeticschinaagency.com/top-leading-cosmetics-brandsin-china-and-full-strategy-analysis/
● Proctor and Gamble entry strategy and approach
● Loreal marketing strategy
Global Locations
â—‹ https://www.bathandbodyworks.com/global-locations/global-locations.html
â—‹ Do NOT OFFER FRANCHISES
â–  https://customercare.bathandbodyworks.com/app/answers/detail/a_id/153
2/~/can-i-open-a-franchise%3F
â—‹ All stores are corporately owned
â—‹ In the U.S., Canada and Greater China, all of our brands are owned and
operated by L Brands and therefore are not franchise operations. Throughout the
rest of the world, we currently work with a small number of international partners
to deliver our Victoria’s Secret, Victoria’s Secret PINK and Bath & Body Works
brands to customers. We are not entertaining requests for new partners,
distributors or licensees.
International strategy:
â—‹ Bath & Body Works: Making Fragrance Fun!
â—‹ The Bath & Body Works brand was first introduced outside of North America in 2010
and has since been expanding around the globe, treating customers to the delightful
scents of Bath & Body Works personal care, soaps and sanitizers and home fragrance
products. In addition to its 1,700+ North American stores, Bath & Body Works has more
than 250 stores in countries around the globe operating under franchise, license and
wholesale arrangements.”
â–  https://www.lb.com/international/international-overview
SECTION III: ENTRY STRATEGY
SECTION IV: INTERNATIONAL MARKETING
STRATEGY
In this section, you need to develop a full marketing strategy (after entry, how will the firm continue) for
the foreign country market. This marketing strategy should include:
●
●
●
●
Definition of target segment.
Definition of positioning statement.
Development of recommendations for all the elements of the marketing mix: product,
price, communication mix and distribution.
Estimates of sales, costs and profits.
Target Segment:
(https://www.mbaskool.com/brandguide/lifestyle-and-retail/15504-bath-a-body-works.html)
●
●
●
●
Chinese Gen Z females
Urban, cosmopolitan
Medium-income
Enjoys life
● Trends on China’s Gen Z Cohort:
○ China’s Gen Z are optimistic, impulsive, and tend to outspend their budget.
â–  47% buys products on the go.
â–  This behavior is driven in part by robust confidence in future earnings:
78% of Chinese Gen Z respondents said they believe they will earn more,
or much more, in the future.
â–  This combination of impulsiveness and optimism also leads 36% of survey
sample by McKinsey & Company to overspend their budget.
■ China’s Gen Z refer to themselves as “the moonlight clan” in reference to
their propensity to spend their entire monthly salary over the course of a
single lunar cycle, effectively living paycheck to paycheck.
â–  More relatively more comfortable owing money: only 21% stated they
would be relieved if they could pay off their debts, compared with 28% of
Chinese Millennials.
â–  In China, even university students with no credit records have access to
financial products that enable them to make purchases they would not
otherwise be able to afford.
â—‹ Gen Z consumers in China are more used to omnichannel shopping experiences
compared to Gen Z in other countries.
â–  Taking apparel as an example, almost 40% of Gen Z consumers in China
stated they would browse in-store but shop online while only about 15-30
percent of Gen Z in other countries stated they would do so.
https://www.mckinsey.com/cn/our-insights/our-insights/chinas-gen-z-are-coming-of-age-hereswhat-marketers-need-to-know#
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20still%20the
%20worlds%20growth%20engine%20after%20covid%2019/mckinsey%20china%20consumer%
20report%202021.pdf
Positioning Statement:
Marketing Mix:
● Product:
â—‹ Bath and Body Works candles, soaps, lotions, bodycare.
â—‹ Variety of products with different uses.
â–  Pocketbac sanitizers
â–  Candles
â–  Lotions + bodycare
â—‹ Alter products to be more aligned with the Chinese taste.
â—‹ Chinese prefer fresh, lighter, fruitier scents.
â—‹ According to research conducted by Labbrand, over 50 percent of the Chinese
survey respondents chose fragrances containing subtle, fresh scents.
â—‹ Infuse traditional ingredients like green tea and Osmanthus.
○ “Using traditional Chinese ingredients like green tea and Osmanthus was a
winning recipe for Chinese consumers, and the candle packaging, which pays
elegant tribute to Chinese heritage in its design, was also a hit with nostalgic
Chinese millennials.” (https://jingdaily.com/luxury-fragrances-china/)
● Price
â—‹ Penetration pricing strategy?
● Communication Mix (promotion?)
â—‹ Social Media
â–  Sina Weibo – popular microblogging network in China.
â–  We Chat – WeChat is a Chinese multi-purpose messaging, social media
and mobile payment app developed by Tencent.
â–  Douyin (TikTok) – popular video social media platform
â—‹ Live Streams: Live Streams: Key opinion leaders (KOLs) in China, broadcast live
on streaming platforms to display products, try and describe them, and answer
questions from the viewers; discounts and limited quantity are displayed on the
screen.
â–  Douyin: China is undeniably the leader in live stream online shopping.
Live streaming on Douyin (TikTok) constituted 28.2% of its traffic in
February, up from 24% in January. (https://storyly.io/how-is-livestreaming-changing-e-commerce/)
■ Taobao: Alibaba’s e-commerce platform Taobao is the biggest live
streaming shopping site in China. According to a survey conducted by
Consumer Association, out of 5,333 users, 70% use Taobao.
(https://storyly.io/how-is-live-streaming-changing-e-commerce/)
● Distribution (place?)
â—‹ Online distribution
â–  Taobao/T-mall
â– 

Diptyque’s Secret on Growing a “Scented” Business in China

https://www.cosmeticsdesign-asia.com/Article/2020/04/28/Fragrance-in-China-Sophisticatedconsumers-shifting-focus-from-skin-care-to-premium-fragrances
https://www.luxurysociety.com/en/articles/2019/02/niche-perfumes-chinas-growing-appetiteunusual-fragrances
Amy’s Other Potential Useful Resources:
http://www.dbpaintmachine.com/Top-10-scented-candles-manufacturers-and-suppliersChina_1421.html
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20still%20the
%20worlds%20growth%20engine%20after%20covid%2019/mckinsey%20china%20consumer%
20report%202021.pdf
https://www.businesswire.com/news/home/20210317005437/en/Global-Scented-CandlesIndustry-2020-to-2027—Key-Market-Trends-and-Drivers—ResearchAndMarkets.com
https://www.beautypackaging.com/contents/view_breaking-news/2020-10-13/euromonitoranalyzes-chinese-millennial-and-gen-z-behavior/

China’s soap market is dominated by foreign brands

https://www.businesswire.com/news/home/20210215005221/en/China-Cosmetics-MarketsForecast-Opportunities-2026-Focus-on-Skin-care-Hair-Care-Bath-Shower-products-MakeupColor-Cosmetics-Fragrances-Deodorants—ResearchAndMarkets.com
https://www.researchandmarkets.com/reports/5240621/china-cosmetics-market-by-type-skincarehair?utm_source=BW&utm_medium=PressRelease&utm_code=gr98f8&utm_campaign=150121
4++China+Cosmetics+Markets%2c+Forecast+%26+Opportunities%2c+2026%3a+Focus+on+Skin
+care%2c+Hair+Care%2c+Bath+%26+Shower+products%2c+Makeup+%26+Color+Cosmetics
%2c+Fragrances+%26+Deodorants&utm_exec=chdo54prd
https://www.chinadaily.com.cn/a/202001/03/WS5e0e8315a310cf3e355822c7.html
https://nhglobalpartners.com/how-to-market-tochina/#:~:text=Social%20Media%20Advertising%20in%20China,Like%20in%20other&text=The%20most%20popular%20platforms%20in,sites%20to%20adverti
se%20their%20products.&text=Toudou%20and%20Youku%20%E2%80%93%20These%20are,
Tencent%20QQ%20%E2%80%93%20This%20is%20China’s
https://storyly.io/how-is-live-streaming-changing-e-commerce/
https://www.cnbc.com/2020/07/16/china-tech-giant-tencent-launches-new-online-shoppingfeature-in-wechat-app.html
https://www.coursehero.com/file/p1gnih0/Psychographic-segmentation-The-market-is-dividedinto-different-segments-based/
https://www.coursehero.com/file/65960205/Bath-and-Body-Worksdocx/
Citation APA
IMF, & National Bureau of Statistics of China. (October 13, 2020). Total population of
China from 1980 to 2019 with forecasts until 2025 (in millions) [Graph]. In Statista.
Retrieved March 29, 2021, from https://www-statista
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National Bureau of Statistics of China. (February 28, 2021). China’s leading export
partners in 2020, based on export value (in billion yuan) [Graph]. In Statista. Retrieved
March 29, 2021, from https://www-statistacom.remote.baruch.cuny.edu/statistics/256350/main-export-partners-for-china-byexport-value/
MOFCOM China. (June 15, 2020). Distribution of Chinese foreign trade in 2019, by trade
partner [Graph]. In Statista. Retrieved March 30, 2021, from https://www-statistacom.remote.baruch.cuny.edu/statistics/257112/main-import-partners-for-china/
US Census Bureau. (March 31, 2020). Value of exported goods from the United States
to China in 2019, by commodity category (in billion U.S. dollars) [Graph]. In Statista.
Retrieved March 30, 2021, from https://www-statistacom.remote.baruch.cuny.edu/statistics/354498/us-leading-export-categories-to-china/
WTO. (May 3, 2020). Value of export of goods from China from 2009 to 2019 (in billion
U.S. dollars) [Graph]. In Statista. Retrieved March 31, 2021, from https://www-statistacom.remote.baruch.cuny.edu/statistics/263661/export-of-goods-from-china/
Myers, S., Wu, J., & Fu, C. (2019, January 17). China’s looming crisis: A shrinking
population. Retrieved March 31, 2021, from
https://www.nytimes.com/interactive/2019/01/17/world/asia/china-population-crisis.html
The World Bank In China. (n.d.). The World Bank.
https://www.worldbank.org/en/country/china/overview
daxue consulting. (2015, Sep 30). Market Segmentation Strategy in China. daxue
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Song, C. (2021, Mar 18). China Facts( 17 Fantastic Facts about China). China
Highlights. Retrieved April 1, 2021, from
https://www.chinahighlights.com/travelguide/china-facts.htm
China. (n.d.). Retrieved April 03, 2021, from https://www.coface.com/Economic-Studiesand-Country-Risks/China
Cramer-Flood, E. (2020, June 29). China digital ad Spending Update Q2 2020. Retrieved April
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World’s Most Innovative Companies in China, 2019. (2021). In D. J. Draper (Ed.), Business
Rankings Annual (2021 ed.). Gale.
https://link.gale.com/apps/doc/WTTTZA324756638/GDL?u=cuny_baruch&sid=GDL&xid=c359c20b
World’s Most Innovative Companies in China, 2019
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1. Luckin Coffee
2. Meituan Dianping
3. Alibaba
4. Kuaishou
5. Pinduoduo
6. Bilibili
7. Yum China
8. Suning
9. DeepBlue Technology
10. Palace Museum Beijing

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