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Analysis of Frienship Store

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GUANG ZHOU

FRIENDSHIP STORE

-- How to Strengthen and Expand Customer Base

ABSTRACT

Guangzhou Friendship Store is a well-established top-class department store in Southeast China. It used to be the only exquisite shopping venue in Guangzhou. However, with the opening up of China’s retails, Friendship faces a fierce competition and a great challenge from the newly-built malls. Whether Friendship is able to strengthen and expand its customer base is a critical issue for its future. This report will investigate and analyze the current situation and problem and try to raise several feasible pieces of suggestion to improve the current situation.

※TABLE OF CONTENTS※

I. INTRODUCTION

1.1 Problem

1.2 Company History & Background

1.3 Company Mission & Current Strategy

II. INVESTIGATION & ANALYSIS

2.1 Current Situation

2.1.1 Industry Situation

2.1.2 Competition

2.1.3 Consumer Identification

2.2 Performance Review

2.2.1 Resources

2.2.2 Actions

2.3 Problem Identification

III. RECOMMENDATIONS

IV. REFERENCES

I. INTRODUCTION

1.1 Problem

Established in 1959, Friendship is one of the biggest department stores in Guangzhou. During the recent five years, Friendship has grown in terms of merchandise turnover. In 2007, it has realized a net profit of 255 million Yuan. Positioning itself as the first-class department store, it offers 60 international top brands, including Cartier, Burberry and Piget.

However, behind their eye-catching achievements, there is an underlying problem. Customer visits to Friendship are mainly because of the luxury product brands offered and not based on the store as a brand. As the luxury product brands move into other shopping centers or department stores, Friendship is experiencing a great loss in shopping traffic, regular customers and revenues.

After detailed research and analysis, our team would like to provide Friendship with certain marketing strategy recommendations to retain and to strengthen customer base.

1.2 Company History & Background

Friendship initially started its business as a state-owned department store, exclusively open for foreign residents in China in 1950s. It went on without change until the implementation of the policy of reform and opening up in 1979. Friendship is transformed to be a top-class and classic public department store, celebrated for its exquisite products and services.

In the new century, Friendship went listed and business has continued to grow. It now has four store established in Guangzhou and Nanning, both first-grade cities in South China. Its business is supported by the association with over 60 global brands, including luxury like Cartier, Armani, Burberry, Swarovski and Piaget. Friendship is a symbol of classic design and reliable quality in Guangdong.

1.3 Company Mission & Current Strategy

Positioned itself as “a top- class department store”, Friendship aims to be a market leader not confined in Guangzhou, but the southeast China and finally to explore the nationwide high ends market. In order to achieve this ambition, Friendship emphasizes “growing in retailing, exploring in high-ends markets and strengthening of brand equity, and the scientific development” in the developmental strategy.

In the implementation of the strategy, Friendship determines to offer a pleasant shopping environment, a variety of stylish and expensive products and exceptional services, to foster the sales by appealing promotion campaigns and to build up a trendy and international store brand.

II. INVESTIGATION & ANALYSIS

2.1 Current Situation

2.1.1 Industry Situation

China’s retail industry has been experiencing unprecedented development in the last tow decades benefiting from government’s adoption of an open-door policy and

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