Different Types of Entry Modes Explained for Japanese Garment Market Using Case Study of a Imaginary Australian Garments Company

1.0 Introduction

Japan, one of the most important garments markets in the world with almost every brand available. Many Readymade garments companies from all over the world want to take advantage of this large and diversified Japanese garment market. This report will give a brief description about Fashionable, a readymade garment company from Australia who want to enter into the Japanese market with their readymade garments. This report will also give information about the Japanese market. The main aspect of this report will be to discuss the various modes of entries available and the most suitable mode of entry Fashionable should choose to enter the Japanese market with its advantages, disadvantages and reasons to choose that particular mode of entry over other options.

2.0 Company Profile.

Fashionable Readymade Garments Ltd dates back to 1990, when the first Fashionable outlet opened in Melbourne, Australia. Over the review period, the company built up a reputation for selling quality garments like men’s wear and women’s wear. It developed a dual portfolio strategy that incorporated casual wear and formal wear. It also operated a number of outlets in other cities of Australia and New Zealand.

One of the main reasons for the company’s success is the effective segmentation of its retail portfolio, with close attention paid to brand positioning and product offerings. For example, their brand Fash-Jeans caters to young and working adults with products in the mid-price range; while their other brand Sculler caters to working professionals.

Fashionable has its manufacturing unit in Melbourne and it employee’s more than 500 people. It is one of the popular and fastest growing brands in the fashion and garment industry of Australia.

3.0 Overview of the Japanese RMG market

The market

The total Japanese market for all kinds of apparel is estimated at approximately yen 4,989 billion or US$ 41.2 billion. The apparel market in Japan was growing at 10-15% annually until 1996, despite the slow economy following the burst of the economic bubble in 1991 and a stagnant domestic apparel market since then. In particular, Japan's apparel imports were enjoying a remarkable increase with 15- 20% annual growth until 1996. The imports from the U.S. were especially remarkable, with annual growth rates of 20-30% due to the "American Casual Fashion" boom in Japan. Major supplying countries in 1997 were China (65.9% of imports); Italy (7.7%); South Korea (4.5%); U.S. (4.3%); and Vietnam (3.1%) (Maura Kim 1998).

The Japanese fashion market is characterized by a fast-moving trend cycle with a vast choice of styles of quality items. This is partly because there are significant differences among the four seasons, which necessitate the consumer to have the right wardrobe for each season (Azuma, 2002). Historically a closed society with a homogeneous general population, Japan requires less size variety than most of the countries in the world (Fisher et al., 1999 as cited in John Fernie, 2004). This enables the Japanese consumers to enjoy a diverse range of designs, from basic fashion to prestigious brands. The highly urbanized nature and so densely populated landscape in Japan naturally creates consumers’ (often subconscious) desire for differentiation (Baudrillard, 1998; Galbraith, 1958 as cited in John Fernie, 2004), and this is counted as another source of the variety that characterizes the form of fashion consumption and the practice in the Japanese fashion industry. It has become a common practice among the major apparel firms in the “bridge fashion segment” to implement a weekly merchandising method, in which firms do not rely solely on a seasonal collection and, instead, they respond to market fluctuations by reducing the time gap that lapses between the design phase of the products and the point of consumption (Guercini, 2001; Azuma, 2001, 2002; Kojima, 1999 as cited in John Fernie, 2004). These fast moving trend cycles are also evident in fashion retail formats. No single format can remain best practice in such a market in which the wheel of retailing (McNair, 1958; Brown, 1990 as cited in John Fernie, 2004) is constantly accelerated by the media hype that has a close link with corporate marketing activities. More than 130 titles of fashion presses are distributed and their impacts on the dissemination and diffusion of fashion trends are deemed substantial in the Japanese market