Spanx Research plan

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Title page

Academic writing

A.G Stijnberg                500726949                

IL4C

Amsterdam, 03/2019

Amsterdam School of International Business

International Business & Languages

Lecturer: E. Meihuizen

Executive summary

This report has been written in purpose of advising Spanx of the market expansion possibilities to China. Spanx Inc. is an American multinational, specialized in Shapewear. The company is operating globally, including countries in Asia such as the Philippines, Malaysia, and Singapore. However, Spanx wants to expand their operating business.  The organization wants to expand its activities to China due to the rapid growth of interest in shapewear. The objective of this research will be to provide Spanx a suitable market entry strategy for the Chinese market. For this reason, the following main question has been formulated: 

“Which entry strategy should Spanx choose to successfully enter the Chinese shapewear market and to grow turnover 5-10% within a year?”

This research includes analyses regarding the internal and external factors that potentially can affect the market entry. As for the internal analysis, Spanx has the assets and knowledge to enter the Chinese market. When looking at the external factors for the expansion, it can be said that the Chinese market differs from the American market in many aspects such as the presence of corruption and the differences in consumer behavior. Furthermore, the most suitable market entry strategy will be provided. 

The research will be completed with a conclusion and a recommendation. Within the last chapter, an implementation plan among a cost-benefit analysis will be provided. 

Table of contents

Executive summary        2

Chapter 1: Introduction        4

1.1 Background of the research        4

1.2 Spanx Inc.        4

1.3 Opportunity analysis        4

1.3.1 The consequences of the Problem        5

1.3.2 Future desired situation        5

1.3.3 The gap between the current and the future situation        5

1.3.4 Objective of the research        5

1.4 Main research question        5

1.5 Organization of the report        6

2. Theoretical framework        6

Introduction        6

2.2 Theoretical perspectives on the topic        6

2.2.1 Market entry modes        6

2.2.2 Entry strategies for international markets        8

2.2.3 Transaction Cost Theory        9

2.3 Selection and justification of theories to be applied        9

2.4 Limitations of the selected theories        10

2.4.1 Theory of Constraints        10

2.5 Conclusion        11

3. Research Methods        12

3.1 Introduction        12

3.2 External factors        12

3.2.1 Primary research methods        12

3.2.3 Secondary research methods        13

3.3 Internal environment        14

3.3.1 Primary research methods        14

3.3.2 Secondary research methods        15

3.4 Market entry Modes        15

3.4.1 Primary research methods        15

3.4.3 Secondary research methods        16

3.5 Ethics        16

3.6 Conclusion        17

Bibliography        19

Chapter 1: Introduction

The following chapter will provide a clear overview of the background of the research, information about the company, and a clarified opportunity analysis. Additionally, the main question will be presented, and the chapter will be completed with the organization of the report.

1.1 Background of the research

This report has been written to investigate the possibilities of expanding the company’s current business to China by making a research plan and identifying the internal and external factors that affects the company’s future performance.

This research plan contains an opportunity analysis made for Spanx Inc. in which operational goals are set for the upcoming year and a suitable entry strategy is created to accomplish these goals. This report focuses on the compression wear and shapewear market of Spanx Incorporated. Spanx, Inc. is said to be the key player operating in the global compression & shapewear market.

The goal of this report is to help Spanx Inc. with developing an entry strategy in order to successfully enter the Chinese shapewear market and to grow further with 5-10% within a year through analyzing the relevant internal and external environment, separating main from side issues, resulting in a conclusion and recommendations.

The aim of this thesis is to investigate the possibilities of expanding the current activities to China. The company is already operating in several countries in Asia, such as the Philippines, Malaysia, and Singapore. Three theories will be used as a guideline in order to explain the entry mode decision process and to be able to give advice on the research question. These theories are used to find the answer to the main question. Additionally, additional models and literature may be used to support these theories and to conduct an internal and external analysis.

1.2 Spanx Inc.

Spanx Inc. is an apparel brand and company. Spanx was founded in 2000 by Sara Blakely in Atlanta GA, from whereon the brand started expanding to more than 50 other countries. With a focus on solving wardrobe problems, the Spanx Inc. brand has grown to offer bras, underwear, leggings, active and more (Spanx, Inc., 2018). The shapewear market is established within the lingerie industry. The market offers women different styles of shapewear and slimming apparel. Spanx Incorporated its mission is to help women feel great about themselves and their potential. In 2010, Spanx started producing male underwear as well. The interest in shapewear over the world is rising and Spanx turned from $5000-dollar business into a 1$ billion one (O'Conner, 2014).

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