Entering the Swedish market: The Karstadt GmbH case

Table of Contents:

  List of Figures  

  III  

1.  Introduction  

  1  

1.1.  Information about the Company  

  1  

1.2.  Scenario and Product Services  

  1  

2.  PEST Analysis  

  2  

2.1.  Political factors  

  2  

2.2.  Economic factors  

  2  

2.3.  Sociocultural factors  

  3  

2.4.  Technological factors  

  3  

3.  Risk Assessment  

  3  

4.  Market Entry  Plan

  5  

4.1.  Market Entry Strategy  

  5  

4.2.  Corporate and strategic marketing objectives  

  5  

4.3.  Market to be entered  

  6  

4.4.  Market Entry Alternatives  

  6  

5.  Operational  Plan

  6  

5.1.  Detailed Target Market Analysis  

  6  

5.1.1.  Demography  6

5.1.2.  Geography  7

5.1.3.  Psychography  7

5.2.  Market Positioning Statement  

  7  

5.2.1.  Product  7

5.2.2.  Price  7

5.2.3.  Place  8

5.2.4.  Promotion  8

  I  

6. Management Implications

8

6.1. People

6.2. Profits

6.3. Physical Evidence

7. Monitoring, Controls, Budget

9

7.1. Measurements

7.2. Control Systems

7.3. Budget

Bibliography

10

II

List of Figures:

  Figure 1 Organigram of Karstadt Quelle  AG

  Figure 2 Sweden s population by age and sex on December 31  2003

  Figure 3 Railroads of Sweden  

  Figure 4 The BCG Business Matrix  

  III  

1. Introduction

As one of Europe’s oldest and largest over-the-counter retailers Karstadt GmbH, subsidiary of Karstadt Quelle AG (Figure 1), operates exclusively in Germany. The present assignment puts forward the proposal that Karstadt GmbH should attempt to penetrate the Swedish market. Furthermore, a PEST analysis and a risk assessment as well as a market entry plan and a final conclusion will form different parts of this work.

1.1. Information about the Company

The KarstadtQuelle AG (Plc.) is Europe’s largest department store and mail order group. In 2003 the firm’s revenue was € 15.3 billion and the earnings before tax and amortisation of goodwill were € 225 million. 100,956 employees were employed by KarstadtQuelle at the end of 2003 (www.karstadtquelle.de). Karstadt GmbH (Ltd.) as a subsidiary of KarstadtQuelle consists of 212 department stores and 305 speciality stores which accounted for 45.7 % or €

6.972 billion sales in 2003. In addition, the well-known ‘KaDeWe’ (abbreviation for

‘Department Store of the West’) which is situated in Berlin and with 60,000 square metres of sales space the largest department store in Europe also belongs to Karstadt (www.karstadtquelle.de).

1.2. Scenario and Product/Services

Due to the problematic economic situation in Germany with decreasing consumption in retail trade KarstadtQuelle decides to enter new markets within Europe by moving to Sweden. The products/services provided by Karstadt will be restricted to the implementation of department stores in excellent city centre locations at the beginning of the process.

1