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MAR18470109
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BsC Business Management
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Business Organisations and Environments in a Global

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Context
Module Code (listed on QAB02C410H
Moodle and in LTAFP)
Hamid Khan
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Managing Organization
Coursework Title

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 Table of contents

1. Executive Summary…………………………………………………………………… 1
1.1 Purpose of the report and applied methods…………………………………....... 1
1.2 General presentation of source information and starting
findings……………………………………………………………………………... 1
1.3 Geographical context……………………………………………………………… 2
2. Company overview and goals………………………………………………………… 2
3. PESTLE Analysis. A brief overview ………………………………………………… 3
3.1 Political environment……………………………………………………………… 3
3.2 Economic environment……………………………………………………………. 3
3.3 Social environment………………………………………………………………… 5
3.4 Technological environment……………………………………………………….. 6
3.5 Legal environment………………………………………………………………… 7
3.6 Environmental context……………………………………………………………. 7
4. Claire’s Accessories: introduction to the Danish market. Porter’s Five Forces
application……………………………………………………………………………… 8
5. Expansion on findings and conclusion………………………………………………... 9
6. References…………………………………………………………………………… 10
 1. Executive summary

1.1. Purpose of the report and applied methods

The following report will work to evaluate whether the introduction of one of the UK’s
biggest fashion retail brands, Claire’s Accessories, will be a financially sound endeavour within
the Danish market. Simultaneously, this report will review risks and benefits, while aiming to
identify niches within the luxury goods business.

Throughout the evaluation process, two major business theories were applied,
represented by the PESTLE model and the Porter’s Five Forces. While the first aims to offer a
concise, yet detailed overview of Denmark’s core areas, the latter is aimed at reviewing risks
and identifying competitors and whether these may prove to be challenging in the brand’s
introduction to the Danish consumer.

The report’s findings proved that Claire’s Accessories will have success in being
introduced to the Danish market, with little threat coming from pre-existing brands, such as
Trine Tuxen, Maria Black and Stine A. This is supported by the high potential of the Danish
market as a strong competitor within the European fashion community and one of the European
countries with a remarkable educational system supporting the industry of fashion (Wetherly,
2018)

1.2 General presentation of source information and starting findings

In developing the present report, we have utilised a series of source data from online
platforms such as Trade Economics, Worldometers and the Danish Government’s website. The
existing graphs and tables were built upon the information collected from the above platforms,
and general considerations were made based on these numerical relationships.

Due to restricted access towards a full understanding of the Danish consumer profile,
we have treated carefully, and allowed the report to provide a general idea about who the
Claire’s Accessories’ Danish customer is.
 We have also been able to identify through the PESTLE model a series of advantages
and have worked towards identifying potential venues where we could develop a niche within
the market. This would then be intent on following the early Claire’s Accessories’ business
strategy of acquiring smaller companies, to facilitate the successful integration of the brand
within the market. Furthermore, we have also discovered that thanks to its profile, Denmark is
encouraging new and arising businesses in investing in the commercial pool.

1.3 Geographical context

Denmark is situated in the northern part of Europe, its neighbours being Norway and
Sweden in the north, and the Northern Sea, the Netherlands, Germany and Poland in the south.
On grounds of its opening to the Northern Sea, this enables good pathways for trade
and transportation into the country. Moreover, we ought to consider that Denmark is seen as
one of the countries with one of the best educational system from a creative point of view, thus
enabling for amazing collaborations with emerging creative minds.

2. Company overview and goals

Claire’s Accessories is an American brand with a history spanning over almost 60 years
within the beauty industry, with its key consumer being teenage girls aged 9-18 years. Despite
originally being a jewellery brand made up of 25 stores, its business orientation shifted once
the brand was acquired by Fashion Trees, a wig-making brand, in 1961.
The brand is currently present within 43 countries, with a wide variety of products and
goods, which aim to be accessible to the younger consumer, while maintaining the status quo
of being on trend.
Within the first 2 decades of its existence, the brand expanded mainly within the USA,
then successfully integrating itself within the Asian market, by purchasing rights for Topkapi,
and its main headquarters in Asia through the city of Hong Kong (1989). During the 90’s, the
brand continues its expansion towards Europe, when it starts opening stores throughout
England, Scotland and Wales, as it had acquisitioned Bow Bangles. Essentially, the brand had
gone to great lengths to acquire as many brands at a global level, in line with the new business
vision. As part of the new strategy, the brand slowly shifted its focus from making jewellery
only into creating accessory lines, ranging from beauty products, decorations and utilitarian
items.
Following the same continuous efforts to establish the brand as a global competitor,
Claire’s Accessories continued to acquire new companies, opening shops in France, Mexico
and India in the coming two decades, and capitalizing on the digital era of commerce. This
granted for several other shops and centres being open within countries within Europe and
Middle East. However, due to its continuous financial efforts to support this rapid growth, it
has been noted that the brand has filed for bankruptcy in 2018, in USA.
As part of their mission, Claire’s Accessories aims to empower their customers to
express individuality and is fully intent on enabling them to discover who they truly are. As
part of their core mission, they also appeal to making the shopping experience an entertaining
one, which can be enjoyed by friends and family, thus playing into their intention to contribute
towards developing a global community of consumers.

3. PESTLE Analysis. A brief overview.

Through the lenses of the PESTLE model, the current report demonstrates that allowing
the brand to continue its expansion within Europe will have great financial benefits, despite
any hardships encountered by the company within the United States.
Further to this, we were able to determine that thanks to Denmark’s importance within
the North-European hemisphere as one of the main economic pillars, as well as the strong
innovative spirit, this should facilitate an easy and lucrative integration of the brand within the
market (del Thomas, 2015)
When looking at the latest economic statistics for Denmark, we can easily notice that
the country is holding up a strong and stable profile, with small inflexions that could be seen
as detrimental to the state’s well-being.

3.1 Political environment

Similar to most European countries, Denmark is a parliamentary democratic state,

taking its political origin within the Ancient Greek model. Despite having Margaret II as its
monarch, her role is merely ceremonial, as most of the major decisions are taken by the Prime
Minister and the Parliament, a structure quite like that of the UK. Furthermore, the Parliament
is made up of several parties, which make The Folketing (Parliament). (Denmark.dk, 2019)

3.2 Economical environment

According to data from Trade Economics, Denmark’s Gross Domestic Product (GDP)
in 2018 was worth $351.3 billion. Main contributing factors were an overall increase in exports
(of roughly 0.9%), stemming from prime materials and non-consumable goods, as well as its 3
core industries: transport, manufacturing and public administration (see table 1 below).
 GDP
Denmark
GDP (USD bil.) 351.3
GDP Growth Rate (%) 0.9
GDP Annual Growth Rate (%) 2.6
GDP per capita (USD mil.) 62888.7
GDP from Manufacturing (DKK mil.) 70163
GDP from Transport (DKK mil.) 93556
GDP from Construction (DKK mil.) 26073
GDP from Public Administration (DKK mil.) 99557
Fig. 1 GDP gross overview for Denmark. Source Data: Trade Economics 2019.

From an economical point of view, Denmark’s spending towards GDP (51.4%) is

higher than its debt (34.1%) with roughly 14%, despite the low budget allocated to help boost
and maintain its GDP on a positive trend. Unlike the EU’s GDP growth rate (1.3%), Denmark
does not prove to be a strong reference point within the European context, partly thanks to its
established economic position within the Northern region as a main exporter of goods.
Claire’s would greatly benefit from the strong capital coming from the manufacturing
industry, as this is Denmark’s 3rd main contributor to the country’s financial prowess. When
connecting this to the flourishing and diverse environment within the field of arts and
entertainment, this will allow the brand to garner and find strong support among the potential
candidates for the industry.
Trading-wise, we have already established that Denmark has been capitalizing on
higher exports, reflected by the balance of trade being set at DKK 8392 million. Imports are
set at DKK 52690.5 million, while exports are set at DKK 61082.5 million. The same stability
is indicated by the low external debt (DKK 728 million) and higher foreign external investment
(DKK 735.4 billion). In line with Claire’s being introduced to the market, we are safe to assume
that we would not only find support coming and a high interest from the target consumer, but
also from potential fashion investors.
With low inflation and core inflation rates (0.5% and 0.6% respectively), and really
small price changes (0.1%), this will allow for a relatively small investment from the brand
towards making itself visible on the market. In support of this, we aim to consider the country’s
interest in investing in beauty products and the great quality of life, as this should facilitate
working out the estimative budget allocated by each consumer to spending on the brand’s
products, especially when we correlate this with the affordability of the products the brands
aims to deliver.
 Denmark European Union
Inflation rate (%) 0.5 1.4
Consumer Price Index CPI 102.9 105.59
Core Consumer Prices 103.2 104.69
Core Inflation rate (%) 0.6 1.2
Producer Prices 103.1 106.1
Producer Prices Change (%) 0.1 0.9
Export Prices 119.4 not applicable
Import Prices 113.2 not applicable
Food Inflation (%) 1.3 2.5
Fig. 2. Denmark core pricing indicators. Source data: Trade Economics 2019

Denmark Core rates

Corporate Tax rate (%) 22
Personal Income Tax rate (%) 55.8
Sales Tax rate (%) 25
Social Security rate (%) 8
Social Security rate for Companies (%) 0
Social Security rate for Employees (%) 8
Inflation rate (%) 0.5
Core Inflation rate (%) 0.6
Producer Prices Change (%) 0.1
Food Inflation (%) 1.3
Employment rate (%) 66
Labor force participation rate (%) 69.5
Long-term unemployment rate (%) 1
Youth unemployment rate (%) 9.7
Unemployment rate (%) 3.8
Fig. 3. Denmark core rates. Source data: Trade Economics 2019

3.3 Social environment

Denmark’s active population represents 63.55% of the total population, with most of it
being urban (88%), while the median age is 41.7 years. The sex ratio is dominated by females,
50.29%, while males are represented by 49.71%. However, this is can easily be considered a
fairly even distribution in between the two sexes (Worldometers, 2019).
From an employability point of view, the occupied positions are supported by mostly
full-time employees (2089 counted) and only 686 part-time employees. Furthermore, the
employability rates are lower than the European Union’s average, but Denmark’s labour force
participation rate continues to be higher than the European Union’s.
 The highest negative impact comes from the high unemployment rate among the young,
while still being lower than the EU’s average. With all these figures in mind, we may need to
consider carefully the available pool of candidates, and profile a dedicated and skilled potential
employee, as to maintain a strong bond among staff and nurture the collaborative culture the
brand strives to maintain.

INFO-DEMOGRAPHICS. DENMARK VERSUS EUROPEAN

UNION
Info Demographics Denmark 5.777.663 3.681.191 Info Demographics European Union 514.01 241.38
230,357

180,946
104,763

43,256
15,674

2,089
2781

686
E M PLOYE D AC TIVE UNEM PLOYED FULL- TIM E PAR T-TIM E
POPULAT ION POPULAT ION EM PLOYEES EMPLOYEES
(THOUSAND) (THOUSAND) (THOUSAND) (THOUSAND)

Fig. 4. Core Info-demographics for Denmark versus European Union. Source Data: Worldometers 2019

3.4 Technological environment

Despite its rather moderate progression in terms of economic welfare, Denmark

continues to sustain a strong position within the European context. Currently, the country aims
to integrate digitalisation within all its sectors, as part of their Techplomacy Initiative by 2025.
We are safe to assume as well that Denmark will most likely meet this goal with
resounding success, thanks to its economic power and strong trade relationships (which only
allows for ease of access to information and latest technologies). In support of this come two
strong contributors, in the form of a new proposal, currently active: the business and public
innovation policies. These have not only reshaped the way businesses are organised in the
country, but they have also majorly influenced the structure of the country’s economic stability,
in a positive manner. (Larosse, 2017)
As a strong competitor within many industries, Denmark intends on capitalising on its
relationships with both partner-countries and business partners. In short, this would only prove
to be a thriving environment for Claire’s Accessories as a new start-up business, founded on
shared values by both Denmark and the brand (The Danish Ministry of Foreign Affairs, 2019).
 3.5 Legal Environment
The Danish legal framework is as permissive as many European countries. There is no
major control over the way business is done within the country, and Denmark is known to be
a major supporter of foreign investment. Aside from their shown support in this regard, they
also aim to work towards supporting newly emerging businesses, considering their
Techplomacy Initiative.
The same can be said about the taxing system, which correlates beautifully with legal
environment, since no high taxing rates apply to businesses. Denmark’s purpose is to encourage
business emergence and success and avoid a context where the businesses find themselves
facing bankruptcy (Madsen, Reumert, 2015)

3.6 Environmental context

Denmark is known as one of the most environmental-friendly countries and has made
continuous efforts towards minimising its impact on the environment. As such, aside from laws
reglementing pollution and negatively impacting business practices, the country is a founding
member of the European Commission’s environmental committee, whose main purpose is that
of controlling and ensuring compliance with environmental laws among all state-members of
the EU.
Previously, its main concerns were air pollution, sewage, water pollution, deforestation,
waste and nature conservation, whereas today it is contributing alongside other countries (such
as Sweden) and main global entities (such as UN and OECD) towards raising awareness and
preventing the exponential increase of global warming, aiming to reduce the use of fossil-fuels
and invests heavily in research for renewable energy sources.
According to Sustainable Governance Indicators Environmental policies article on
Denmark from 2015, most Danish citizens believe the country is clean and are happy with the
efforts made by the governing powers to reduce its populace’s detrimental impact on the
environment. (SGI, 2015)

4. Claire’s Accessories: introduction to the Danish Market. Porter’s Five Forces

application

With an ideal setup for business implementation and supporting forces towards
organisational growth, as well as the economic prowess of Denmark within both the European
Union and global context, introducing Claire’s Accessories within the Danish market will be a
natural and easy process. Despite the presence of many other Danish and foreign brands, this
should only prove to be a situation where we are faced with friendly competition and even
support from competitors. (Michaux, 2016)
We aim to consider this as a new venue for Claire’s Accessories, which could
potentially lead to collaborations with local brands, the same way the brand expanded during
its first four decades. We can also consider that this would enable the brand to actively coerce
local, smaller brands into being integrated within an internationally reputed trust.
The greatest risk is the limited information we have on the ideal customer behaviour
and profile. The biggest threat comes from the lack of appeal of the Claire’s Accessories
products to young Danish girls. However, this can easily be rectified upon initiating the first
few stores within major cities such as Copenhagen, where we should be able to collect
information from customer surveys and reviews, ranging from their thoughts on the
affordability, quality and usefulness of the goods serviced. Even though we aim to make a
model based on Danish girls living within the capital city, this should be an accurate reflection
of the customer profile within the other cities, thanks to the predominantly urban population.
(Wetherly, 2018)
Additionally, we should be aware of two other components: the young population
represents roughly 15% of the total population and more than 50% of the population is
represented by women. With these elements in mind, as well as the country’s collaborative and
socially responsible nature, the brand introduction strategy will need to be built around the
following core values: collaboration, social awareness, family and friendship, in order to raise
the likelihood of more consumers purchasing the goods.
Simultaneously, we aim to develop a marketing and promotional strategy in line with
Denmark’s regulations on environmental impact and integrate its opening towards the digital
era. Through a quick adaptation of the Claire’s Accessories business model and merging it with
Denmark’s business and public orientation, this should facilitate a successful and quick
integration into the beauty goods industry. Moreover, our marketing strategy will find
resounding success in advertising and offering a series of products focused around the Danish
consumer, and exclusive to the country we intend on expanding the brand to. (Gilespie, 2016)

5. Expansion on findings and conclusion

With an urban population, regaling on great quality of life, and sturdy economics, as
well as a high buying potential, Claire’s Accessories will find little to no obstacles in being
launched in Denmark, thanks to its name within the global economy. We should also consider
this as a fully profitable venue to bring our business to on one hand, due to Denmark’s high
support towards business and innovation, as we could be perceived as an element of novelty.
(del Thomas, 2015)
With a thriving manufacturing industry and great balance of trade, this will make things
easier. Despite a slight reluctance towards imports, we should find the integration of local
prime materials and use of the available manufacturing industry in creating unique products,
tailored around the Danish consumer and exclusive to this market alone (Webster, Hamilton,
2015)
 Thanks to the high numbers of women and high young population rate, we may be able
to utilise this towards a successful integration, especially when considering that the Danish
consumer will have always allocated a portion of her funds to enjoying life and investing in
entertainment. Despite the pre-established competitors having a preceding history and a better
understanding of the consumer needs, we may capitalize on the strong, friendly competition
and create new business relationships with local buyers, marketing specialists and find means
to collaborate towards a later integration of local small businesses within the Claire’s
Accessories’ trust. Conclusively, Denmark is by far an optimal expansion venue for the brand,
with plenty of advantages and possibilities, aside from the thriving commercial environment.

References

a) Marmol, del Thomas, (2015), PESTLE Analysis: ‘Prepare the best strategies in
advance’
b) Webster, Philip; Hamilton, Leslie (2015), ‘The International Business
Environment’
c) Wetherly, Paul (2018): ‘The Business Environment: themes and issues in a
globalizing world’
d) Michaux, Stephanie (2016): ‘Porter Five’s Forces: stay ahead of the competition’
e) Gillespie, Andrew (2016): ‘Foundation of Economics’
f) Online Website: Sustainable Governance indicators. Available at: https://www.sgi-
network.org/2018/Denmark/Environmental_Policies
g) Online website: Claire’s Accessories Overview. Available at:
http://www.clairestores.com/company-profile/company-overview
h) Online article: Madsen, Jorgen Kjergaard; Reumert, Kromann (2015): ‘Doing
business in Denmark’. Available at: https://uk.practicallaw.thomsonreuters.com/8-
501-0226?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
i) Larosse, Jan (2017): ‘Analysis of National Initiatives on Digitising European
Industries’. Available at:
https://ec.europa.eu/futurium/en/system/files/ged/dk_country_analysis.pdf
j) Online website: The official Danish government website (2019). Available at:
https://denmark.dk/society-and-business/government-and-politics
k) Online website: The Danish Ministry of Foreign Affairs (2019). Available at:
https://um.dk/en/danida-en/strategies%20and%20priorities/techvelopment/
l) Online Source website: Worldometers (2019). Available at:
https://www.worldometers.info/world-population/denmark-population/
m) Online Source website: Trade Economics (2019). Available at:
https://tradingeconomics.com/denmark/forecast