Research On The Development Strategy Of YH Company

In recent years,China has been the world leader in luxury goods market,but in 2015,luxury goods in Chinese market is frequently encountering a cold snap.At the same time,however,affordable luxury brands in the Chinese market for the middle class are well-developed.The high growth rate in the Chinese market is as same as the well-developed period of luxury brands.As the concept of luxury consumption in Chinese market has become increasingly mature,more and more Chinese young consumers become the fans of affordable luxury designer brands which lay more attention on personality and uniqueness.For domestic brand franchisees,affordable luxury brands with high market visibility and mature operation already had well-established distribution channels in domestic market.Acting affordable luxury designer brands is a perfect choice with both operability and broad development prospects.At the beginning,affordable luxury brand franchisees always encounter several problems,such as the level of control the value chain’s process is not high enough,the brand has just entered the Chinese market and limited by unsuitable marketing strategy,market acceptance is low,management situation is not ideal,the company cannot get the short-term profits.Although affordable luxury brands market has a bright prospect,but franchisees if cannot effectively solve the dilemma in the early development,alleviate the pressure of the money,is difficult to support until the brand to be accepted by the market.The final outcome is a good tomorrow,but the company died on the way to the tomorrow.Based on the affordable luxury designer brand VW’s franchisee YH company as the research object,on the basis of service profit chain,value chain and core competence theory,use correlation analysis tools such as PEST analysis,porter five competitive model,EFE matrix,IFE matrix model and value chain analysis to make a system analysis.The analysis firstly reveals that YH company has four external environment opportunities,namely,the domestic affordable luxury brands market had broad prospect and great potential,personalized affordable luxury brands with strong design elements become popular,lower tariffs make the product price difference shrinking both at home and abroad,strict government restrictions continuously establish on luxury goods.Secondly,it shows that the four threats are luxury consumption is affected by the government’s anti-corruption,supplier bargaining power is weak,the traditional sales channels become diversified and lead to be split,and the amount of affordable luxury brands which enter Chinese market is rapidly increasing.Thirdly,it discusses the five internal advantages of YH company,that is,relying on the abundant resources of the parent company,VW brand has strong potential on the affordable luxury market,gain more opportunities as the first franchisee in domestic market,have a good relationship with VW company and gain more support,and accumulate a certain experience.Finally,it shows that fourdisadvantages of YH company are lack of personnel encouragement which limited by state-owned enterprises,single and limited development space of franchising market,the huge investment at the beginning and slow money collecting,VW brand product pricing relatively high leads to consumption group limited.Through the analysis of the opportunities and threats,advantages and disadvantages,and by using the SWOT analysis method analyze the four strategies growth strategy,reverse strategy,diversification strategy and tighten strategy which can be adopted by YH company,and further using QSPM matrix analysis,finally it is concluded that YH company should adopt reverse strategy.According to the strategy,it proposes the specific measures from the perspectives of "to enhance the value of consumers as the guide,improve the commodity management system;strengthen cooperation with upstream and downstream,increase the value of the industrial chain;strengthen internal management,reduce the cost of the company;exert VW brand’s advantages,establish a favorable brand portfolio",and the specific safeguard measures to ensure the implementation of the strategy,such as strict corporate budget,brand maintenance,perfect salary assessment and so on.The innovation of this paper in terms of the theory,the domestic research field of affordable luxury designer brand franchisee development strategy research almost has no dabbling,failed to form a clear theoretical framework.Therefore,this study has a certain innovation.From the practical application point of view,this study provides an important theoretical basis on the future development of YH company’s strategy,at the same time give references to the relative brand franchisees business development.However,in the study of YH company’s development strategy,they analysis is incomplete and lack of depth,still need to continue deep studying the relevant theoretical knowledge,and always pay attention to affordable luxury brands industry and case studies.Meanwhile,implement the long-term concern to YH company’s development strategy,and further summarize the shortage of strategic choice and implementation of this paper,so as to better apply to the YH company’s development practice.