1.Introduction, History, and Present Position of Country Road.

2. Do the macro/general environment analysis (3-segment out of 6-segment) of the United States
(consider the timeline 1990s when Country Road entered the US market) (Global, Economic,
and Political Legal).

3. Do the macro/general environment analysis (3-segment out of 6-segment) of the United States
(consider the timeline 1990s when Country Road entered the US market) (Demographic, Socio-
cultural, and Technological).

4. What competitive forces seem to have the greatest effect on industry attractiveness? Use
Country Road as an illustrative example (Industry Analysis through 5 Forces).

5. Do the Strategic Group Mapping (SGM) and Competitor Analysis (consider the timeline
1990s when Country Road entered the US market).

6. Identify the Critical/Key Success Factor of the Apparel Industry in the USA…Conclusion and
Recommendation

1.Introduction, History, and Present Position of Country Road.

Answer:

Introduction:

Country Road is an Australian brand. It was established by Stephen Bennett in 1974. It deals
with men, women, children apparel and homeware. It’s a renowned fashion brand in Australia.
The brand was re-launched in 2004 and has evolved into a leading lifestyle brand renowned for
stylish, high-quality apparel, accessories and homeware. Its head office is in Victoria. Country
Road went public listed company when it was listed on Australian stock Exchange.

History:

After establishment of Country Road by Stephen Bennett in 1974, Myer Emporium Ltd. took
over Country Road in 1981. It added value in Country Road’s business. Country road started to
expanded its business in numerous countries. It opened it’s shop in New Zealand in 1984. In
1987-1988, it was listed in Australian stock exchange. Woolworths holdings Ltd., purchased
Country Road in 1998. It entered in US and Asian apparel retail market gradually in 1989 and
1990. In 2001, new management closed US business after incurring of million of dollars. In
2006, company focused on it retail business than wholesale business.

Present position:

At present Country Road has 2000 employees across Australia and New Zealand and it’s head
office is in Victoria. Country road has 56 retail stores and operates in 77 stores in Davis zones
and Myer. Country road was used to sell premium product. But due to fierce competition it
entered into middle market. As a Australian brand, Country road presents Australian image on
their product. They use it as their core competency.

2. Do the macro/general environment analysis (3-segment out of 6-segment)

of the United States (consider the timeline 1990s when Country Road entered
the US market) (Global, Economic, and Political Legal).

Answer:
Global:

Country Road has strong brand image, resource strengths and good product quality. They were
used to present Australian trend on their product. They used it as competitive advantage. It
worked for short times. But industry trend, consumer preferences change over time. Country
Road did not adapt with changes. They transferred Australian trend into US market despite of
external environment changes in US market. They failed to identify external changes mainly in
the form of shifts industry trends and external changes. They basically tried to present
“Australian way of life” image on their product in US market. But they failed due to external
factors. It became obvious when Australian tourism bubble had burst.

Economic: When Country Road entered into US market in 1989, the market size was approx.
US$178 billion in revenue. It was growing at a rapid pace. It was very lucrative for new entrants.
But country road faced some problem due to low switching cost for consumers, increasing buyer
bargaining power, threat of substitutes, competitive rivalry.

Political:
3. Do the macro/general environment analysis (3-segment out of 6-segment) of
the United States (consider the timeline 1990s when Country Road entered the
US market) (Demographic, Socio-cultural, and Technological).

Answer:

Demographic:

Environmental condition is not same in USA. In colder region people prefer long sleeve shirts,
and heavier outer wear, in tourist are people prefer colorful dress. So, Country Road had to
customize their product based on these issues. Country Road’s outlets were so aesthetic which
have been established in most of the popular shopping mall in USA market.

Socio-cultural:

Socio economic culture matters in apparel market. High socio-economic people prefer formal
dress. They are not concerned about price.

Technological:

Americans had an enormously positive response to Australian films like Crocodile Dundee and
to Australian artists Ken Done. Country Road translated these Australian images to American
audiences. They reflected these issues in their advertising campaign. They explored these things
in US market by technology. But this core competency lasted for short time due to shift the
market trend.

4. What competitive forces seem to have the greatest effect on industry

attractiveness? Use Country Road as an illustrative example (Industry
Analysis through 5 Forces).

Answer:

1. Competition in the industry:

Suppliers and buyers seek out a company's competition if they are able to offer a better deal or
lower prices. Conversely, when competitive rivalry is low, a company has greater power to
charge higher prices and set the terms of deals to achieve higher sales and profits. In Country
Road case, we can see that there was intense competition in US apparel market. So, Country
Road had to shift in the middle market.

2. Potential of new entrants into the industry:

A company's power is also affected by the force of new entrants into its market. The less time
and money it cost for a competitor to enter a company's market and be an effective competitor,
the more an established company's position could be significantly weakened. In Country Road
case we can see that, in late 90s entry was comparatively easy in US apparel. So Country Road
faced difficulties in operation although they had resource strengths, good brand image.

3. Power of suppliers:

When multiple sellers exist in the market with same generic product then power of
suppliers declines. They are supposed to charge lower price. If number of sellers are few
in number, then it opposite situation happens. In Country Road case we can see that, I
late 90s US apparel market was filled with many suppliers. Bargaining power of
suppliers were too low. As a result Country Road were supposed to sell their premium
products at low price.

4. Power of customers:

It happens when many sellers exist in market with same generic product and offer such types of
prices which go on the favor of consumers. US apparel market had been growing at a rapid pace
from 1989. The market size was approx. US$178 in 1995. Many players were competing in
market. So, switching cost became much lower for consumers.

5. Threat of substitute products:

A substitute product is one that serves the same purpose as another product in the market.
Getting more of one commodity allows a consumer to demand less of the other product. Say for
example in late 90s, US apparel market was in booming condition. Many organizations like
Country Road were offering clothing products which were closely substitute for one another.
When substitute products increases then it had negative impact for a particular company like
Country Road. As a result, we can see that country Road changed their business strategy. They
started to sell middle market.
5. Do the Strategic Group Mapping (SGM) and Competitor Analysis (consider
the timeline 1990s when Country Road entered the US market).

Answer:

A strategic group map, or strategy map, is a visualization tool that incorporates data from
industry rivals with similar characteristics and market share to your own company. This tool will
help you see how your company stacks up against your competitors.

There are four steps to construct a strategic group map: (i) identify the competitive variables that
distinguish companies; (ii) plot firms on a two-variable map with pairs of characteristics; (iii)
assign companies to the strategic groups; (iv) draw circles around each strategic group.

In Country Road case two variables have been taken to draw strategic group mapping.

4
4=luxary market
3= Premium Market
3
2= Middle Marker
2
1= Low end market

1
Country road moved
to the middle market
6. Identify the Critical/Key Success Factor of the Apparel Industry in the
USA…Conclusion and Recommendation

Answer:
Market trend shifts over time. When market condition are consistent with a company’s core
competency then there is a possibility of success. Proper research and developments, clear
strategic direction, understand target audience, relevant core competency should have been
practiced. Organization resources, manufacturing skills should have been adaptable with the
change of market shifting.
Recommendation:
i. Proper Target audience selection
ii. Proper brand positioning
iii. Relevant pricing with product quality
iv. Realizing consumer taste and preference