Introduction: Brighton Accessories plans to enter one of three possible markets by opening a retail store in Mexico City, Mexico or Beijing, China or in London, England. The Brighton brand was launched in 1991 with a single collection of belts. Brighton has expanded its product offerings and it now sells a selection of leather goods, wallets, watches, footwear, fragrances, jewelry, home accessories and eyewear. The purpose of this single retail store is to convince senior management at Brighton of the feasibility and the profitability of international expansion into either Mexico, or China, or Australia.
Background: A simplified approach to making this decision would be to select London for these reasons:
The British like Americans and American made products
We already have a good idea what English consumers want
It will be easy to find a manager willing to be transferred there
Business conditions and business regulations will be similar
England will welcome this form of investment by Brighton
There will be no problem repatriating profits from the store
Competition will not be much different than what we face across the United States
Potential consumers in our target market are accustomed to paying a high price for luxury goods such as the accessories we sell.
A foreign expansion such as this will have a greater likelihood of success when foreign investments are welcomed. The country selected must be one in which federal, state and local regulations embrace foreign investment, and where local regulations do not strangle a new business before it has a chance to grow. One of the requirements imposed by Brighton’s management team is that repatriating profits from this retail store Brighton’s U.S. headquarters should be easy to do. The country selected should also be one in which Brighton’s profits will not be subject to double taxation on profits. Management also asked the site selection team to avoid …