Russia is one of the largest markets in the world. As the western culture slowly infiltrated the eastern mentality many young people began adopting western culture and appearances. In the past few years Russia has not only began to accept western ideas and fashion, but has developed an energetic and affluent middle class. This has increased the demand for luxury markets that had been closed to the western world. In this environment Orcanta has found a lucrative opportunity to expand its operation and allow more people to enjoy the high quality products that it sells. The business environment in Russia has experienced many changes in a relatively short amount of time. Until recently the government was in charge of all production; and western goods were unable to be sold to the populace. After the fall of the Socialistic government several new barriers arose to hinder foreign investment. Besides normal, expected risks, Russia has unique and important qualities that should be addressed. We have divided the risks of entering the Russian market into political, legal, banking, logistical and competitive barriers.
[...] The chain of lingerie Orcanta was created in 1996 and runs 64 shops in France. In 2005, the turnover of Orcanta was 49 million euros. In order to be competitive with the intense competition in the lingerie industry, The Chantelle Group relies on its expertise of their high quality beauty and feminine body products, and on its know-how of the creation and the distribution of their products. The Chantelle Group contributes to the healthcare of the woman by offering a premiere product for women. [...]
[...] History In November of 1996 Orcanta Lingerie shop opened its doors in the Shopping centre “Belle Epine” in a Parisian suburb for the first time. Almost simultaneously, two other shops opened, one the du commerce” in Paris, the other one in the Shopping centre of the “Part-Dieu” in Lyon. January 1997 marks the start of a policy that initiates massive the opening of 24 shops all over France within one year. In this year Orcanta Lingerie received the “L'enseigne d'Or” award for excellence in Lingerie design. [...]
[...] Orcanta in Russia is totally new brand, we have to establish it by initiating several stages. According to the director of organising the BuyBrand exhibition in Moscow, Ekaterina Soyak, franchise in Russia is still in its early stages.” The principal sectors interested in franchising are fast food and coffee shops, and fashion and hair dressing salons, which are attractive mainly in Moscow. In 2006 the number of franchises doubled. Franchisors generally represent companies from Greece, Turkey, Western European Countries and United States. [...]
[...] Moreover, all the goods are integrated harmoniously into its ‘universe.'” Pricing: The choice of the prices for the stores in Russia will be determined by the prices of lingerie by our competitors and by the average market price in Russia. However, we will be forced to add the price of additional logistics in order to pass some of the increase in cost on the consumers. For example a items which cost France will cost in Russia 26.25 with the of logistic cost. [...]
[...] In order to make this enterprise successful there must be extensive and accurate market research to make sure that there is a significant market for this product. In 2004, the rise of the real incomes of the Russian population was almost generating a significant increase in consumption of 12%. So the retail sales increased by 12% in 2004 ( in 2003) and the imports, which cover half of the demand of the households, by 25%. The current economic context of Russia is rather favourable. [...]
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