Name of Course: INB301
Assignment Topic: Report
on Cats Eye
Section: (4)
Submitted by:
Name
ID
Arpita Anindita Bala
2022546
Abdullah Al Fatha
2022055
Saif Nowroz
1630329
Tausifur Rahman Johan
1821520
Naomi Nitee Sarker
1911171
Submitted to:
Mehadi Mansur
Lecturer
Department of International Business,
School of Business & Entrepreneurship - IUB
Letter of Transmittal
5th May 2020
Mehadi Mansur
Lecturer
Department of International Business
Independent University, Bangladesh -IUB
Subject: Cats’ Eye Export Plan.
Dear Sir,
As-salamu alaykum. We are providing you with a comprehensive research report on Cats' Eye
ltd.’s export strategy for readymade clothing items.
We're delighted to submit you the report. We completed an export strategy, as ordered, which
plans out a partnership business for our group of five members. We attempted to apply all of
the information obtained from a group discussion as well as information obtained from online
analysis. A lot of appreciation for your guidance, sir, without which this report would be
impossible to finish.
We pray with sincerity & hope that you will acknowledge and accept the report and we'd be
grateful if you could share your feedback on our efforts. Sir, we expect you will find this report
acceptable.
Best wishes,
Arpita Anindita Bala
Abdullah Al Fatha
Saif Nowroz
Tausifur Rahman Johan
Naomi Nitee Sarker
Acknowledgement
In this current pandemic situation, the world around us, our neighborhoods, gathering areas,
and the places we work and call home have all changed dramatically in a short period of time.
For all of us, being bound to our homes for so long has been a difficult experience. Many of us
have found it hard to adjust to the "New Normal," but we have done our utmost to adapt to the
virtual education system. I, alongside my team members, have devoted our minds and diligence
to preparing this paper, and I believe we've given it our all.
We are exceptionally lucky to have the opportunity to do this awesome International Business
course with our esteemed lecturer, Mehadi Mansur sir.
We're really curious to learn more about the course he teaches because we're motivated and
inspired by him. This project would not have come to fruition without his support and guidance.
Despite the fact that we were unable to work as a team, I must express my gratitude to the team
members who, at the very least, assisted me in making the project feasible and competitive.
All the people who contributed & supported this project & provided with their invaluable
advice and encouragement, which was vital to the project's success.
We
appreciate
their
continual
assistance
and
support.
Table of Contents
Executive Summary
1
Company Description
2
Mission & Vision
2
Product Description
3
The Opportunities of Exporting
4
Export Opportunity in Malaysia
4
Export Opportunity in Malaysia
5
Export Opportunity in Malaysia
6
Export Opportunity in Malaysia
7
Export Opportunity in Italy
7
Export Opportunity in Italy
8
Export Opportunity in Italy
9
Export Opportunity in Italy
10
Export Opportunity in Singapore
11
Export Opportunity in Singapore
12
Export Opportunity in Singapore
13
Export Opportunity in Singapore
14
Product liability Consideration
14
Intellectual Property Right
14
Choosing the best Country to trade in
15
Choosing the best Country to trade in
16
Market Entry for Singapore
17
Market Entry for Singapore
18
Market Entry for Singapore
19
Strategy of internationalization
20
Product Pricing
20
Conclusion
21
Bibliography
22
Executive Summary
Bangladesh is a developing country that is known for exporting ready-made products in the
global economy. In recent years, the country has experienced speedy economic growth, driven
primarily by readymade garment exports and remittances from migrant workers. While tapping
into its vibrant private sector and wide pool of low-cost labor, the country is diversifying its
export base in terms of goods and destinations.
Readymade garments are Bangladesh's main export, but the country also exports shrimp, jute,
leather goods, and tea. The United States and the European Union are the primary export
destinations of Bangladesh. The primary goal of our export plan is to export readymade
clothing from our brand. Entering new markets and exporting to other countries would help
our brand become more well-known and will expand our business. Furthermore, we will be
able to capture more revenue from that region as a result of the entry, which will assist us in
becoming a pioneer in exporting garment products in the future. This type of product patronizes
our country with subsidies, monitoring, and favorable policymaking.
Exporting garment products brings in more foreign currency for Bangladesh. To retake our
market position, we use outstanding promotional activity to attract attention to the domestic
and international markets. We consider the countries' cultural, political, economic, and
environmental conditions when choosing a new market. We examined carefully and
methodically; trade friendliness, diplomatic relationship status, export imports policy,
regulation and future market potentiality.
We have selected a sensational garment factory in order to increase their buyers and market it
in a global market. Our company's international business plan is to "export" all types of readymade shirts, polo shirts, blazers, and ethnic wear for all genders and ages to the three countries
we have chosen. Malaysia, Singapore, and Italy are the three countries that we have chosen for.
We've secured exclusive contracts or endorsements putting us in a unique position to service
these needs.
1
Company Description
The plan is to export the ready-made products to some selected overseas countries. This export
plan has evolved from the usual observation of the day-to-day life. People who love to wear
comfortable, fashionable t-shirts, Blazers and all the trendy clothes in an affordable price range.
With these assumptions we hope that we can create demand for this product to our selected
countries in the world.
When it comes to original style and shopping material, Cats Eye is the pioneer lifestyle brand
in Bangladesh, beginning from trendsetting fashion lovers and their followers. With a focus on
making unique and stylish fashion attainable to everyone.
While providing tips & information from across the world as well from all Cats eye outlets,
Cats eye connects people with expert advice. In 1980, Cat's Eye began their journey in the form
of a small shop in Green Super Market that sold almost everything from candies to ornaments.
The founders, Mr. Sayeed Siddiqui Rumi and Mrs. Ashrafun Siddiqui Dora, had kept a small
part of the shop for their own-designed shirts.The enthusiastic young men of Dhaka responded
to them positively. As a result, Mrs. Ashrafun Siddiqui made the decision to only sell designer
clothing for men. The couple rented a floor space on Elephant Road's Mansur Bhaban in 1983.
That marked the official start of Cat' Eye.
Until 1993, there was a vacuum in the men’s fashion market for a clothing line for the
executives. Thus, Cats Eye introduced a new line of products under the new brand name
MONSOON RAIN as a sister concern of Cats Eye.
Cats Eye launched another Men's Wear brand, Cats Eye Unlimited, in 1998 to satisfy the stylish
men's casual wear segment. Ladies wear, accessories, and silver jewelry were recently launched
by Cats Eye.
The main objective is to deliver quality products to customers in the country and overseas with
the latest trend. The products will be produced at the savar factory, and then will be exported
through cargo ship from Chittagong port. To transport these goods, the company will hire
commercial vehicles (Vans) to deliver the products to the port.
Whereas the company has been operating since its inception in 1980, they already have a Trade
License., T.I.N 3 Certificate, E.R.C (Export Registration Certificate), I.R.C (Import
Registration Certificate), LC (Letter of Credit) facilities from the bank for the export processes.
Moreover, our company ensures all the export documents such as a Pro-Forma Invoice (P.I),
Bill of Lading (B.L), Inspection Certificate (I.C), Certificate of Origin, a Commercial Invoice,
Packing List, etc.
Mission and Vision
Cats Eye in onto continuous improvement in the production quality and being cost effective as
a means of achieving Total Customer Satisfaction. Customer Satisfaction, Inspiring Creativity,
Healthy Work Environment, Integrity, Commitment & Teamwork, Equal Opportunity
Employer - These are the key points that Cats Eye values.
2
Product Description
Cats Eye has an exotic clothing lineup for both
men and women. They try to serve People who
love to wear comfortable, Fashionable t-shirts,
Pants, Blazers and all the trendy clothes in an
affordable price range.
The range of Cats Eye products are, Shirts,
Polo shirts, Punjabis, Girl tops, Pants, etc.
using all types of local and imported fabrics
for Men, Ladies, Boys, Girls & Kids and all
kinds of knitted items using all types of local
and imported fabrics.
3
The Opportunities of Exporting
• Increase company circumference.
• Build International Relations.
• Expand the market share.
• Make the business more progressive.
• Utilize the International opportunity.
• Maximize the customer base.
• Grasp the opportunities in the international market.
Exporting can help the company resist the fluctuations in domestic market.
Export Opportunity in Malaysia
Country Profile:
Malaysia boasts one of south-east Asia's most prosperous economies, the result of decades of
economic development and political prosperity.
Consisting of two areas divided by some 640 miles of the South China Sea, Malaysia is a
multi-ethnic, multi-religious union of 13 states and three federal territories.
The largest Muslim ethnic Malay are politically powerful and profit from affirmative
discrimination in industry, schooling, and the public sector, but the economic influence is held
by a strong ethnic Chinese minority. While racial and religious differences remain, the cultures
coexist in relative peace.
Market Profile:
Malaysia is one of the most open markets in the world. Its economy has been well and has
shown to be resilient to external shocks. This has been aided by sound macroeconomic
management, which has resulted in low and steady inflation as well as timely fiscal expansion.
The financial sector is already well functioning and well-regulated, with well-capitalized banks
and deep capital markets. In the short term, an increasingly difficult external environment
could limit prospects for export-led development. Domestic demand, bolstered by increased
wage growth and a robust labor market, is projected to continue to anchor economic growth.
In the long run, increasing productivity levels would drive demand.
Malaysia’s main economic indicators are
•
•
Real GDP
Unemployment Rate
4
Year
GDP
Unemployment Rate
2018
4.77
3.33
2019
4.30
3.28
2020
-6.00
4.90
2021
7.80
3.40
❖ GDP by Sector (2019): Services 54.17%, Industry 37.42%, Agriculture 7.28% & others 1.13%.
* Source: World Bank
Competitor Analysis:
In this textile industry there are many competitors of Malaysia who import a big amount of
garments product from Bangladesh.
These are Singapore, UK, USA, Germany, Spain, France, Italy, Canada etc.
Risk Management:
It is very important for a company to measure risk for entering a new country. There are
many risks for a company to enter in a new market, such as: country risk, credit risk, currency
risk etc.
Currency risk:
Currency values and exchange rates fluctuate often, making financial transactions difficult.
Variations in the exchange rate can have an impact on the payments that trade partners owe
each other, and significant currency fluctuations can have an impact on company prices.
Inflation may be present in one country when it is absent in the trade partner's country. This
will make investment returns unpredictable, and companies don't like volatility.
Malaysian currency name is Malaysian ringgit & Bangladeshi currency name is Tk. For
Malaysia, the currency risk is pretty low, because it was quite stable.
Credit Risk:
The risk of default arising from a borrower's inability to recover the principal and interest
owing to the leader is known as credit risk. To cover for the possibility of future defaults, the
lender uses the loan's interest payments. When a creditor fails to fulfil his or her commitments,
the lender's cash flow is disrupted. Credit risk analysis assists the lender in determining the
borrower's willingness to fulfil loan commitments so that it can protect itself against cash flow
risks and minimize the severity of losses.
By doing this analysis we can easily know Malaysian market credit situation.
5
Country Risk:
Malaysia's trade and investment climate is very liberal. Furthermore, since China is Malaysia's
largest trade partner, a stronger recovery in the Chinese economy from the Covid-induced
economic crisis would help export growth. However, the prospect of additional lockdown steps
being re-introduced locally and in main trading peers to restrict a revival of Covid-19
infections, as well as the still poorer global economy outlook, weigh adversely on Malaysia's
short to-medium-term economic outlook. Increasing labor costs by regional rates, as well as
numerous challenges to political stability, are additional downside risks for Malaysian
investors.
Economic Environment of Malaysia:
According to the International Monetary Fund 2020, Malaysia's economy is the fourth largest
economy In Southeast Asia. That is now the world's 36th largest economy. Due to a high
density of knowledge-based enterprises and implementation of cutting-edge technologies for
manufacturing and the digital economy, labor productivity in Malaysia is considerably higher
than in neighboring Thailand, Indonesia, Philippines, or Vietnam.
Malaysians live in relative luxury compared to almost all other ASEAN countries, with only
Singapore and Brunei coming close. This is thanks to a rapidly increasing export-oriented
market, a low national income tax, extremely cheap local food and transportation gasoline, and
completely financed single payer universal healthcare. Malaysia has a newly industrialized
consumer economy that is free and state led. Malaysia economic growth had already limited
to 4.3 percent in 2019 due to reduced government spending and lower public and private
expenditures. The COVID-19 pandemic has caused the growth rate to drop to -5.6 percent in
2020. Nonetheless, the IMF's April 2021 outlook predicts a quick turnaround to 6.5 percent in
2021 and a stability to 6 percent in 2022, subject to the global economic growth following the
pandemic.
Main Indicators
2018
2019
GDP (billions USD)
GDP (Constant Prices, Annual %
Change)
GDP per Capita (USD)
General Government Balance (in %
of GDP)
General Government Gross Debt (in
% of GDP)
Inflation Rate (%)
Unemployment Rate (% of the Labor
Force)
Current Account (billions USD)
Current Account (in % of GDP)
358.71
4.8
364.68e
4.3e
11
-4.2
11e
-1.8
55.5
57.2
1.0
3.3
0.7
3.3
8.00
2.2
12.28
3.4
6
Political Environment in Malaysia:
It's interesting to remember that Malaysia's constitutional problems are handled by a secured
bureaucratic agent structure,
Malaysia is a stable political entity. In developing and implementing its diplomatic policies, it
strives for principles of peace and impartiality. Regardless, it has a sea and several debates with
several provincial nations. It maintains strong ties with superpower China, but its
disagreements with the latter over the South China Sea have drew a lot of attention.
Socio-Cultural Environment of Malaysia:
Malaysia is a multi-ethnic nation noted for its socioeconomic and cultural integration.
Malaysia now has a population of over 28 million inhabitants, ranking 43rd among the
world's most populous countries. Kuala Lumpur is Malaysia's most populous and the
capital of Malaysia, as well as the region's most important economic center.
Malaysia is home to many ethnic groups, including Malays, Chinese, Indians, indigenous
peoples, and other Asians. When it comes to Malaysia's religious history, Islam is the official
and commonly practiced faith, accounting for 60.4 percent of the population, while Buddhism
accounts for 19.2 percent. As a result of the country's multi-cultural and multi-racial makeup,
9.1% of Christians, 6.3 percent of Hindus, and 5.0 percent of other religious people represent
the overall population.
Export Opportunity in Italy
Country Profile:
Italy is a country located in Southern Europe comprising the boot-shaped Italian peninsula and
a number of islands including Sicily and Sardinia. Italy has a strategic location dominating the
central Mediterranean as well as proximity to Western Europe across the Adriatic Sea. The
government system is a Republic; the chief of state is the President, and the head of government
is the Prime minister. Italy has a diversified industrial economy, which is divided into a
developed industrial north, dominated by private companies, and a less developed, welfaredependent, agricultural south. Italy is also a member of the European Union (EU). Italy is
considered to be one of the world's most culturally and economically advanced countries, with
the world's eighth-largest economy by nominal GDP (third in the European Union), sixthlargest national wealth and third-largest central bank gold reserve. It ranks very highly in life
expectancy, quality of life, healthcare, and education. According to the IMF Italy has the 13th
highest GDP in the world with 2,610,563 billion, in 2020, GDP per capita for Italy was 30,657
US dollars.
7
Market Profile
Italy's economy, which ranks among the top 10 largest in the world, is largely diversified and
dominated by small- and medium-sized firms, which comprise 99% of Italian businesses.
Italy's relatively affluent domestic market, access to the European Common Market, proximity
to emerging economies in the Middle East and North Africa, and assorted centers of excellence
in scientific and information technology research remain attractive to many investors.
YEAR
2018
2019
2020
2021
GDP Growth
0.9
0.3
-9.6
3.4
Unemployment
Rate
10.6
10.7
12.7
9.9
Competitor Analysis
The competitors we will face in Italy are the countries who also export their clothing products
to Italy.
They are: Germany, France, UK, Brazil etc.
Risk Management
In Italy the effect of the pandemic has slowed down domestic demand significantly, but it is
expected to pick up in 2021. In the context of the COVID-19 pandemic, the government
allocated €108bn to direct economic support measures in 2020 including to fund large-scale
furlough schemes, business grants, personal and business tax reliefs, and additional funding for
public services and local/regional authorities (Ministry of Economy and Finance (MEF)), with
a further €32bn of extraordinary funding so for expected in 2021. Though whether these efforts
will have the desired effect in the long term remains to be seen.
Currency Risk
The currency for Italy is the Euro, their economy is expected to return to growth of 3.0% in
2021 according to the IMF (World Economic Outlook Update, January 2021) and 3.4%
according to the European Commission (Winter 2021 Interim Forecast).
Credit Risk
Although Italy is among the European countries worst hit by the coronavirus pandemic, most
financial companies have so far proved resilient. On average, probability of default for financial
services companies is below the average for Italian companies in all sectors, which stands at
1.4% and 2.6% over one and two years, respectively. Banks have provided many stimulus
measures which will help any business struggling to set up or to survive.
8
Country Risk
Italy is currently 8th among 185 countries in the world in terms of nominal GDP. After many
years of recovery their GDP finally started to recover from a recession in 2019 but the Covid19 outbreak has caused stagnation to creep back in which will slow down the progress of
growth for the economy. On the political side, elections were held in March 2018 and led to a
new majority formed by the anti-establishment Five Star Movement (M5S) and far-right Lega.
Export/Import Regulation Italy:
According to EU wide Eurostat data 5 of the 20 busiest ports in Europe are located in Italy.
The role of sea transport is immense in Italy and it could be used to our advantage when
considering trading with them for our business. Sea Freight is generally 5 fives cheaper than
air freight which could prove to be beneficial in the long run which it might take to set up our
operations overseas
Economic Environment
Due to the recent global pandemic Italy is suffering from a recession which affects our ability
to do business with them reliably since they are a fair distance away from our shores. Even
though we can expect to make a good impression on the Italians with our brand, it cannot
guarantee success mainly because of the uncertainty that the world is currently experiencing.
Main Indicator
2018
2019
GDP
2.092 trillion
2.004 trillion USD
GDP (Constant Prices,
Annual % Change)
0.8
0.9
GDP per Capita (USD)
34,615.76 USD
33,228.24 USD
General Government
Balance (in % of GDP)
-2.2
-1.6
General Government Gross 134.398
Debt (in % of GDP)
134.161
Inflation Rate (%)
1.24
0.63
Unemployment Rate (% of 10.6
the Labor Force)
9.89
Current Account (billions 52.2
USD)
59.2
Current Account (in % of 3.01 %
GDP)
13.85 %
9
Political Environment
Described as a national unity government, the Draghi Cabinet is composed by politicians and
independent technocrats and is supported by a large, multi-partisan majority in the Italian
Parliament, including the anti-establishment Five Star Movement (M5S), Salvini’s right-wing
Lega, Berlusconi’s center-right Forza Italia (FI), Zingaretti’s center-left Democratic Party
(PD), Renzi’s centrist Italia Viva (IV), and Speranza’s leftist Liberi e Uguali (LeU). Meloni’s
far-right Fratelli d’Italia (FdI) remains opposed and continues to call for elections.
Socio-culture of Italy
Italy is home to more than 62 million individuals as of 2017 and is ranked 23rd in population
size when compared with other countries throughout the world. About 96 percent of the
population of Italy is Italian, though there are many other ethnicities that live in this country.
North African Arab, Italo-Albanian, Albanian, German, Austrian and some other European
groups fill out the remainder of the population. Bordering countries of France, Switzerland,
Austria, and Slovenia to the north have influenced Italian culture, as have the Mediterranean
islands of Sardinia and Sicily and Sardinia. Italy's official currency is the euro. Italians are
known for their family-centric culture, and there are a number of small and mid-sized
businesses. Meetings are typically less formal than in countries such as Germany and Russia,
and the familial structure can give way to a bit of chaos and animated exchanges. Italian
businesspeople tend to view information from outsiders with a bit of wariness and prefer verbal
exchanges with people that they know well.
Effects of Coronavirus
Though their GDP has fallen in the last year due to the effects of the coronavirus as it was one
of the first countries in Europe to be affected with the virus. The IMF estimated a GDP loss of
10.5% in 2020 after real output contracted by 18% in the first half of the year. In 2021, a
substantial carryover effect should underpin a GDP rebound of 5.2%, followed by further
growth of 2.6% in 2022 (IMF's October 2020 forecast), though the situation remains uncertain
under the sharp flare-up of the pandemic and the tightening of containment measures in the last
quarter of 2020. In its most recent January 2021 update of the World Economic Outlook, the
IMF has revised its GDP growth projections for Italy to 3% in 2021 and 3.6% in 2022
(representing a difference from October 2020 WEO projections of -2.2% and +1%,
respectively). Their unemployment rate is expected to increase to 11.6 percent in 2021. Italy's
unemployment rate stood at 9.9 percent already in 2019, one of the lowest rates of the last few
years.
10
Export Opportunity in Singapore
Country Profile
Singapore is a sovereign island city-state in maritime Southeast Asia. It’s a major trading hub
and home to the world’s busiest port. The nation’s prosperity has been built on a pro-free trade
policy. In May 2006, the director general of the World Trade Organization observed that
Singapore, with its strong tradition of open markets, benefits from bilateral as well as global
trade agreements, unlike most small countries that relinquish their interests in bilateral
negotiations with larger and more powerful trading partners. According to the IMF Singapore
has GDP worth $374.394 billion, In 2020, GDP per capita in Singapore was $102,742 dollars
which is the second highest in the world. Revenue in the Apparel market amounts to
US$2,396m in 2021. The market is expected to grow annually by 4.51% (CAGR 2021-2025).
Market Profile
Singapore is currently rated as the second easiest place in the world to do business by the World
Bank. Singapore is invested in an open trade-dependent economy to maintain a free market and
unprecedented economic growth. It is the center of a trade cub in the ASEAN region and if
successful this region will be a catalyst for many more profitable ventures in the future.
YEAR
2018
2019
2020
2021
GDP Growth
3.44
0.73
-6.00
4.98
Unemployment
Rate
4.2
4.11
4.38
4.35
Competitor Analysis
The competitors we will face in Singapore are the countries who also export their clothing
products there.
They are: China, Malaysia, Italy, India etc.
11
Market Risk
Going forward, Singapore is delivering its ‘Future Economy’ strategy. Its COVID-19 response
has put planning front and center as it increases efforts to become a “global-Asia node of
technology, innovation, and enterprise”. Key priorities include: accelerating digitalization and
internationalization, promoting upskilling and reskilling; catalyzing growth in new sectors (e.g.
advanced manufacturing, FinTech and cyber) and benefiting from continued ASEAN
economic integration.
Singapore is a strong supporter of the WTO. The city state has over 25 FTAs in place including
the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and is
a member of the Regional Comprehensive Economic Partnership (RCEP).
Currency Risk
Singapore’s unemployment remains low, while wages have been creeping up. Expectations are
buoyed by sustained growth in the global information-technology industry and solid demand
for services from across Asia. The Ministry of Manpower does not prescribe any minimum
wages for workers in the city-state.
Credit Risk
Singapore enjoys good relations with its neighbors and is an advocate for ASEAN unity and
greater ASEAN economic integration, particularly through the ASEAN Economic
Community, which was launched at the end of 2015 to enhance economic and trade integration
across SE Asia. If any unfortunate events transpired which may lead to failure to payment, then
we can expect full co-operations from the banks as well as Trade Agencies to help us navigate
the Singapore legal system.
Country Risk
Singapore is one of the busiest and prosperous trading hubs in South East Asia and provides a
lucrative opportunity to open up more opportunities to expand our business in an international
stage. The Government is very pro-business friendly, and any new ventures can be expected to
be supported in this country.
12
Export/Import Regulation Singapore:
Singapore is a commercial hot spot in the Eastern Asian region with their ports being the
gateway to the ASEAN region. Further, Singapore’s advanced infrastructure and 20
implemented free trade agreements with 31 partners add to its allure as Southeast Asia’s top
trading post.
In accordance with Singapore’s reputation for its business-friendly and clear regulatory
environment, import and export procedures in the country are simple and efficient, and
acquiring the requisite permits and licenses can be done in short order. This article outlines the
steps to acquire the necessary documentation and follow government protocols to engage in
importing and exporting in Singapore.
Economic Environment
Singapore is a country which prides itself on efficiency and strict code of conduct that they
follow to the letter. Fines are usually very strict and severe if proper conduct is not followed.
The commercial risk for Singapore is very low if all lines of action are maintained.
Main Indicator
2018
GDP
373.2 trillion
GDP (Constant
Annual % Change)
2019
Prices, 3.4
GDP per Capita (USD)
373.1 trillion
0.7
66188.75 USD
65233.28 USD
General
Government 3.72
Balance (in % of GDP)
3.74
General Government Gross 109.75
Debt (in % of GDP)
129.01
Inflation Rate (%)
0.57
0.44
Unemployment Rate (% of 4.2
the Labour Force)
4.11
Current Account (billions 64.1
USD)
63.1
Current Account (in % of 15.31 %
GDP)
-1.52 %
13
Political Environment
Singapore has been one of the region’s most politically stable countries. Singapore practices a
modified version of the Westminster Parliamentary system. Each parliament sits for a
maximum of five years. The last General Election was held on 10 July 2020. The ruling
People’s Action Party (PAP) has been dominant since 1959, before Singapore became
independent and the PAP currently holds 83 of the 93 elected seats in Singapore’s single
chamber Parliament. The Workers’ Party is the largest opposition party in parliament.
Socio culture of Singapore
Singapore’s social and ethnic fabric is a unique blend of cultures and people – Malays, Chinese,
Indians and expats from various countries. Singapore’s lifestyle is multi-cultural with each of
these ethnic communities maintaining their unique way of life and at the same time living
harmoniously. Singapore’s society is cosmopolitan due to the influx of foreigners in recent
times. People are amiable and courteous to each other. High emphasis is placed on communal
and racial harmony.
Effects of Coronavirus
Singapore has been one of the success stories of how a country can successfully handle the
pandemic before it gets a chance to wreak havoc. The effectiveness of Singapore’s approach
lies in its combination of subtlety and pervasiveness where the citizens worked in tandem with
the government to ensure the virus from hitting the economic sectors too hard. The
unemployment rate was the highest during the peak of Covid-19 when it reached 3.6 but it is
slowly recovering and is currently at 3.3 in 2021.
Product Liability Consideration
Product liability refers to a manufacturer or seller being held liable for placing a defective
product into the hands of a consumer. In general terms, the law requires that a product meet
the ordinary expectations of the consumer. When a product has an unexpected defect or danger,
the product cannot be said to meet the ordinary expectations of the consumer.
Intellectual Property Right
Intellectual property is a broad categorical description for the set of intangible assets owned
and legally protected by a company from outside use or implementation without consent. An
intangible asset is a non-physical asset that a company owns.
This right is protected in both these countries by the respective ASEAN and EU regulations.
Our intellectual property will be protected by the laws in the respective countries.
14
Choosing the Best Country to Trade In
When it comes to starting a business operation in any country, many factors play a deciding
role to determine whether there is potential and suitable environment available for the particular
business to flourish. Now that CATS EYE has decided to step outside the national market, it
be critical to analyze and compare certain factors to determine possible international markets.
In order to figure out the best window of opportunity for CATS EYE from Singapore, Italy and
Malaysia, below table provides factor specific comparisons.
Factors
Bangladesh
Italy
Singapore
Malaysia
Capital
Dhaka
Italy
Singapore
Kuala Lumpur
Constitutional
Parliamentary
Parliamentary
Parliamentary
Federal
Form
democratic
constitutional
constitutional
constitutional
republic
democratic
democratic
monarchy
republic
republic
Currency
Taka
Euro
Singapore dollar
Malaysian ringgit
Per capita GDP
$2,064
$42,378.61
$58,500
$11,414.21
GDP (PPP)
$5,139
$44,248
$41,479
$27,220
Population
167.6milliom
60.36 million
5.704 million
32.6 million
4.2%
Singapore
Tariff
tariff
6.1%
rates for 2018 was
0.24%, a 0.17%
increase
from
2017.
Labor force
81.95 million
24.3 million
15
3.74 million
15.58 million
Labor force by
agriculture:47%
agriculture: 3.9%
agriculture: 0.7%
agriculture: 11%
occupation
Industry: 13%
industry: 28.8%
industry: 25.6%
industry: 36%
Services: 40%
services:
Unemployment
4.10%
Flexibility of legal Flexible
67.8% services:
73.7% services:
(FY 2011 est.)
(2017)
(2012 est.)
9.9%
4.11%
4.7%
Flexible
Inflexible
Moderately
environment
53%
Flexible
Political Stability
Moderately
Stable
Very Stable
Stable
Healthy
Healthy
Healthy
High
Moderate
Moderate
2.3%
2.6%
6.4%
Unstable
Relation
with
Bangladesh
Cultural
Differences
Growth in textile 10.55%
industry
Most
✓
Brand
Recognition
Most
likely
to
✓
✓
have the highest
demand
Easier
route
✓
to
✓
export
Thorough analyzing of the above table reveals why CATS EYE have chosen as its next
destination of expansion. The higher net income per capita, marginal tariff and convenient
logistics have made Singapore a unanimous selection. Pairing that with the trade and
investment friendly nature with low corruption make Singapore the ideal hub for expansion.
16
Market Entry strategy for Singapore
When Manufacturers decide to be involved in the International Market, they various unique
entry strategies available to get their product to end consumers. There are six different ways to
a company can choose to enter a foreign market
1. Exporting
2. Turnkey projects
3. Licensing
4. Franchising
5. Joint ventures with a host country firm
6. Wholly owned subsidiary
Each of these entry strategies holds its own share of advantages and roadblocks but Singapore
is a Unique Market place, where some of these strategies hold more value than others.
Initially export is perhaps the first strategy any business would like to implement. Exporting is
the process of direct selling of goods and / or services in another country. This method offers
the lowest risk as well as being cost-effective due to not needing invest in production facilities
in your chosen country. As all goods are produced locally and then sent to foreign countries
for sale it is very easy to initiate. In addition, as Singapore is seen as an Export hub of the world
transportation and logistics suggest that this would be most effective entry strategy as the
majority of costs involved with exporting only will come from marketing expenses.
However, this might have been beyond reach of other entry strategies if not for the businessfriendly operating procedures found in Singapore. Due to Singapore being an open market with
the lowest tax rates, foreign investors are encouraged to invest in Singapore.
17
ASEAN countries are known for their investment friendly mode of operations and this can be
clearly seen from the graph above how the FDI or foreign direct investment is on the rise and
when compared to the global scene they are one of the most invested countries.
Singapore, among the ASEAN countries is one-step forward when it comes to foreign
investments. As seen above in the comparison between ASEAN countries Singapore has almost
non-existent paid-up capital requirement. Additionally, the license to obtain for business are
very friendly in nature with only few industry specific licenses being challenging to obtain
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Moreover, the COVID-19 pandemic has made a lasting impact in International business. In
addition to severely obstructing and limiting transportation and logistics, it has also crippled
the global economy. Among the ASEAN countries, Singapore has taken a step to provide fund
stimulus and access to ASEAN clients. This compared with fast-track digitalization has enabled
foreign Investors to regain and reestablish.
Additionally,
the
fast-growing
E-Commerce
has
also
provided
a
boost.
Therefore, from analyzing the points above it can be concluded for Singapore, a wholly owned
subsidiary (WOS) would be the most beneficial entry strategy for a company like CAT’s EYE.
A wholly owned subsidiary is when a foreign business acquires an established firm and sets up
a new operation. CAT’s EYE can take the advantage of Low tax rates, close to non-existent
paid-up capital and exposure to ASEAN markets. Additionally, should they choose Export,
although the local labor cost would be lower, but Transportation and Logistics cost would be
an huge obstacle which is ever so rising due to the Covid-19 Pandemic. Furthermore, the access
to ASEAN countries market is another benefit that would be tempting for CAT’s EYE.
19
Strategy of Internationalization (SINGAPORE)
There are four basic strategies to compete in international markets and the appropriateness of
each strategy depends on the pressures for cost reduction and local responsiveness in the
industry. These Strategies are as follows:
1. Global standardization
2. Localization
3. Transnational
4. International
As CAT’s EYE look to operate in multiple international markets including Singapore, Italy
and Malaysia. Here a global standardization where a low-cost strategy is implemented globally
or International strategy where the products are manufactured locally then exported will not be
suitable. Due to different demographics and production facilities outside local country, this
cannot be implemented. Additionally, though localization offers CAT’s EYE a competitive
edge, but due to aggressive competitors, the company will have to reduce its cost structures.
This will however not be possible as there are substantial differences across nations with regard
to consumer tastes and preferences and cost pressures will be substantially great. All of these
strategies lead to adopting a transnational strategy where CATs EYE can differentiate their
product across geographic markets to account for local differences and foster a multidirectional
flow of skills between different subsidiaries in the firm’s global network of operations
preferences and tastes. This strategy enables the company to operate in a number of countries
by varying the degree of coordination. They have a central corporate facility but the functions
like decision-making, R&D and marketing powers are localized. The apparel is influenced by
both the local fashion trends and the international one, thus this strategy can help in including
both international and local trends in the product and its marketing. For example, a central
corporate facility established at Bangladesh can oversee operations done by CAT’s EYE
Singapore.
Product Pricing
The average price of our basic T-shirt will be $1.90/BDT,156.00 compared to the current
market average of $2.20 while offering a better-quality assurance. Prices however may vary
depending on the buyer’s requirement, design, and workmanship.
20
Conclusion
Cats Eye has displayed remarkable entrepreneurship and achieved widespread recognition by
establishing a distinct corporate culture in the garment industry. Singapore is the country to
which we have decided to export. As shown in the chart above, Singapore has shown more
growth in terms of exports and is the perfect country for us to export our Cat's Eye products.
We have done a detailed comparison for three of the countries that we have chosen and the
most efficient and the best country for us to export would be Singapore considering the
population, GDP and considering the political and economic factors. Cat's Eye LTD is a wellknown brand in Bangladesh and we want the brand to hold its reputation and not be a “No
name” Brand, so it will be best if we export to Singapore as the currency difference isn't much
and if we export to Italy and Malaysia our brand would be lost and would lose its brand image.
Taking all into consideration, our primary goal is to establish our export business in Singapore.
The key objective is to increase the market of buyers to international level, as we are going to
export our ready-made products in Singapore from our three selected countries. We are eager
to see significant feedback from Singapore & on a letter date expand our export of products to
other countries as well.
21
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[Accessed 01/05/2021]
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