Currency—Euro & Pound
At the present, currency is a big issue if decisions have to be made about business. Belgium is using Euro as its Currency and UK is stilling using pound. This is a key factor which affects the locating decision. In this case, UK in a better position because pound is stronger than Euro now. It is cheaper for UK to import goods from places in Europe so it can import more good at a lower cost. As a result, UK can sell the imported goods locally with a cheaper price without cutting the profit margin. Tony Blair’s Labour government says that entry is purely a question of where Britain’s economic interest lies. If it can be shown that the country’s material well being will benefit, then it should go in, if not, not. UK still has an option so it will not affected if there is any changes in Euro.
Market Background—Edinburgh & Antwerp
Edinburgh
If I choose Edinburgh to locate the clothing outlet, I will try to find a vacant shop on Princess Street. Although there will be lots of competitions and the rent will be relatively high, there are a lot of positive benefits bought from this place. Firstly, Princess Street is a main street in Edinburgh. Everyone in Edinburgh must know where it is located. It is placed an excellent business environment. For instance, there is a train station (Waverly Station) and an elegant hotel at the east-end of Princess Street. Along the Street, there are bus stations, which go to a variety of destinations in Edinburgh. There are lots of taxis available as well. Convenience transport means that customers are more likely to come and shop. Apart from the transport, there is very nice view as well. Princess Street is located opposite to Princess Street Garden and the Edinburgh Castle. Above the Princess Street Garden, there are lots of impressive architectures and there are a variety of galleries, for instance, National Gallery and the Royal Scottish Academy. As Princess Street is located in the middle of all these attractions, the tourists will definitely go to Princess Street if they come to visit. On the Princess Street, there are lots of big shops. The outlet’s main competitors will be Frasers, River Island, Mark & Spencer, Gap, Next and Jenners because sell the same sort of things as the clothing outlet do. The analyses of the competitors are printed on next pages. These shops have certain positions in the market and they have stable customers. Hopefully these shops will bring reasonable number of customers to the new clothing outlet. As it is a completely new shop, it has the benefit to attract the customers. There are lots of apartments near Princess Street, most of the rents are very expensive. This shows that there are some wealthy people living around. Their socio-economic groups are in group A and B which are professions, managers, doctors, lawyers and teachers. They are more likely to consumer money on shopping. They can be the potential clients. Apart from the clothes shops, there are a variety of shops that are listed on the next pages.
Antwerp
If I choose Antwerp to locate the clothing outlet, I will choose Meir Street because it is the main shopping street with different ranges of shops. The total numbers of shops are more than the shops on Princess Street. It has two sides of shops, which provide customers enough space to shop. I note that some of the shops in Meir Street are the outlets of some international companies, for instance, C&A, Diesel, Espirit, Hugo Boss, Mango, Morgan and Replay. This means the fashion is came from different countries. They can be very strong competitors, however, they can also bring customers to my new clothing shop. The services within easy walking distance include banks, car park, telephone box, toilets, Museums and taxis. There are underground and tramline around as well, which do not exist in Edinburgh. Apart from the shops, there are a lot of good restaurants near Meir Street. This includes fast food—Macdonald’s, traditional Chinese restaurant, traditional Japanese restaurant, local restaurant and some pleasant western restaurants. These restaurants attract people to come to Meir Street. Lots of foreign businesses locate their outlets in Antwerp means that there is less risky for the new clothing outlet because someone else has tried it before. From my observation, the shops’ sizes in Antwerp are larger than the shops in Edinburgh. If the outlet is located in Antwerp, there will be more space for stoppages and displays. The customers are able to shop in a comfortable environment.
Advantages in Antwerp
- Antwerp is a city which is the most populous in Flanders and one of Belgium’s most fascinating artistic and historical centers.
- Antwerp is the commercial center where immense variety goods are bought and sold.
- The city has lots of famous attractions, which attract customers to come. Eg, the Cathedral of Our Lady, the paintings of Rubens, Jordaens and Van Dyck, its numerous museums and Meddelheim park.
- Antwerp is now also famous for its fashion designers, architectural school and theatres.
- The port of Antwerp is an important link in the chain of international trade. They are also warehoused, repacked, distributed and forwarded to other destinations. This business provides Antwerp with good economy.
- The wealth of warehousing and storage space is a major element in Antwerp’s role as a distribution center. The foreign manufacturer can decide to store his goods in a distribution center in Antwerp in order to deliver them more quickly and cheaply to the customers.
- The impact of the goods traffic due to port industry is not limited to maritime traffic.
- Antwerp’s port has grown into a center of world trade, transport and warehousing.
- The port creates jobs, e.g., it provides works for 57200 people. If people have work, they are more likely to spend money. This helps the economy.
- Antwerp is the terminus of 12 international railway lines, making it Europe’s leading railway port. Goods can be transported efficiently.
* People in Belgium can speak a variety of languages, for example, Dutch,
Belgian’s language , English. Etc.
Advantages in Edinburgh
- It is the capital of Scotland. It has a cultural background.
- It has lots of cultural activities, for instance, Edinburgh Festival. It brings a lot of customers to Edinburgh. During Christmas, it has a fun fair in Princess Street Garden. This attracts lots of tourists.
- During every Christmas and Easter, Edinburgh is full of festival atmosphere. This encourages the customers’ shopping mood.
- There are some famous universities in Edinburgh, for example, Edinburgh University and St, Andrew’s University. Etc. this means there will be lots of graduated people. Generally, they are more capable in dealing with new environment. This provides lots of well-educated work force with new skills, which are needed, for business. (650 language graduates per year, 3000 more studying a language with business)
- Although Edinburgh is located at the North of Britain, it is well linked with all the regions in UK by rail and by plane. As a result, the customers are not only coming from Edinburgh.
- It is closed to Glasgow which is currently really successful in different kinds of business. There are lots of new shops in Glasgow. This may bring influence to Edinburgh. (people in Glasgow may come to Edinburgh to shop)
- Scotland has high productivity- Scotland consistently outperforms UK average for manufacturing prod. Per head. Long tradition of shift working, including continuous production.
- Excellent environment and strong successful culture results in good employee loyalty and low staff turnover.
- Edinburgh University among the highest levels of research and contract funding in the UK.
- Cost effective and flexible- hourly wages, including indirect social wage costs are among lowest in EU
- English language is the mother tongue and there is a basic understanding of Scot/Roman based legal systems like French and German.
- Training and Employment Grants available.
- Government and Local government are anxious to welcome inward investment. It provides grants for new businesses.
- It has the Edinburgh International Conference Center Ltd. which was again a considerable wealth-generator for Edinburgh and the Laotians, creating over 17 million of economic impact in the year 2000. it enhances Edinburgh’s profile as a global business and tourism center, hosing 24 international events which attracted 12,669 delegated from around the world so when the businessmen come to attend meeting, they may consider operating business in Edinburgh.
- The city also offers a wide range of excellent accommodation and exciting social programme options. These activities help to impress the tourists and the businessmen.
Recommendation & conclusion
After considering all the advantages of two cities, I think I will go for Edinburgh as the location of the new clothing outlet. At the economic side, I think the economy in Edinburgh is more stables than the economy in Antwerp as the UK economy is currently stable and expanding and the 4th biggest in the world. Evidences above shows that the UK economy is not remarkably affected the world events whereas the economy in Antwerp is less stable. The British people have the advantage of being able to speak English perfectly. English is an essential language in the business world. From my experience, although the Belgian can speak English, they can’t speak as fluent as the British do. Euro is a big factor which affects me to make the decision. My research shows that the goods are more expensive after Belgium currency is changed to Euro. This discourages customers from consuming. As pound is strong now, Britain can gain lots of benefits at present. As Euro is not introduced for a long time, it takes time to be strong and to be recognizable by the world. It is true that there are more tourists in Edinburgh than in Antwerp. The city’s economy continued to thrive with tourism proving a key contributor. If the outlet is located in Princess Street, a lot of keys marketing decisions have to be made because there are too many strong competitors. Large sum of money has to be spent on advertising to acknowledge people the existence of the shop. The fashions that the shop provides have to be very trendy which helps the products to stand out from the competitors. Competitive pricing can be used because it will be risky if we do premium pricing. People will not buy the products. Penetration pricing can not be used because lower prices always give people a perception of low quality. The shop is aiming at the middle class- young profession. Special offers have to be made but it can’t be used frequently. It is helped to boost short-term profit. If the outlet can be operated profitably, it can consider opening a second outlet in Antwerp, which is the second best location.