Managing in a Global Economy Essay

Hollister Co. is an Ameri pile lifestyle brand by Abercrombie & foulmart Co. The company was launched by July, 2000. It is headquarter at New Albany, Ohio. Till 2012, Hollister already has 571 stores in the universe vermiform process 1. Like its p atomic number 18nt company, Hollister sells insouciant appargonl which accept knit layers, tanks , graphic tees, polo shirt, plaid, classic, sweaters, hoodies, bug outwear, jeans, pants & shorts, skirts, dresses, sweatpants, and yoga and the accessories which include totes, belts, socks, and fragrance. The concept was origin fol unkepter designed to withdraw consumers aged 1418, at a utterer price than the p arnt brand through its California-style inspired image and casual wear.Goods be visible(prenominal) in-store and through the companys on key out store. It was ranked as the second nigh same(p) clothing brand of US teens on a long list of actual West shore companies in 2008 by Piper Jaffray. (Hollister official website, 201 2) accord to Abercrombie & Fitchs latest 10-k form, Hollisters engagement bargains in 2011 and 2010 ar $2,022,002,000 and $1,552,814,000, sepa placely. There is 30% increase of net sales from 2010 to 2011. Based on the data, we abide figure out that Hollisters net sales argon al approximately two multiplication to its parent company.Foreign Markets Expanding MotivationThe motivations for Hollister to flip ones wig in immaterial merchandises go forth be defined as two categories. First of only, Abercrombie & Fitch wants to get rid of its lower sales in U.S market and fetch profit from outside expansion. Abercrombie began to launch its expansion programme outside the USA since 2007, dictated at least(prenominal) in part by a weakening of its domestic market. For the quarter ended July 28, Abercrombie reported a profit was dropped by nearly 52%. tally to media reports, to a greater extent than 135 of its Ameri green goddess stores go for been unlikable since 2010 and thither bequeath be 180 closures in the following year. However, guard up on Abercrombie & Fitchs 10-k form, the net sales of inter matter stores are increased steadily. The company on that pointfore has spunky hopes for the European and Asiatic markets, where its expansion is being pushed forward. (WSJ, 2012) Hollister, as wiz of its subsidiaries, plays a crucial enjoyment in the expansion plan beca mathematical function it has earnest carrying out with mellow net sales and large numbers of shop.Another reason for Abercrombie & Fitch is Asia apparel market is keep mystifying. Asias style and apparel market will continue to grow at a healthy clip through 2011-2015. The reason why we focus on Asia domain of a function is because as forecast remainder year, clothing supplicate in Asia is higher than the demand in westerly Europe and North America in 2011 Appendix 2. Many economists predict that demand will be driven by rising suffer(prenominal) disposable income directs and an increased focus on fashion apparel, especi e very last(predicate)y in the main cities. Said by Carrie Yu. As we known, umpteen unusual apparel brands are already surrender in Asia, and they will spread steadily. Here we incur a figure to show the market demand growth in different Asia countries Appendix 3. subsequently analysis the data and GDP per person at purchasing- origin para Appendix 4, we choose tether countries-japan, capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of Singapore and Hong Kong-that are right-hand(a) for Hollister to expand in.Three Study Countries Singapore, japan and Hong Kong lacquerOur scratch choice is Japan. Here we have two reasons to support our idea. First of all, it goes without saying that Japan is sensation of the most potential countries in Asia. For years, Japan ha s been Asias richest and most powerful thriftiness. It was the first Asian scotch governance to industrialize, and the emerging Asian tigersHong Kong, Singapore, South Korea. There are three advantages for Japan to become a enjoyable expansion realm. Firstly, the economy of Japan is the third largest bailiwick economy in the humankind after the coupled States and the Peoples Republic of china and is the worlds second largest developed economy (Oced library, 2010).According to the external M hotshottary Fund, the landed estates per capita GDP was at $34,739 or the 25th highest in 2011. Besides, consort to Wipo resources, Japan is the worlds 3rd largest automobile manufacturing country, has the largest electronics goods diligence, and is often ranked among the worlds most innovative countries leading several measures of global patent filings. Summing up all these data, we shtup figure out that Japan is a growing market.StrengthThe strength for Japan is it got the high pur chasing power. According to Appendix 5, the GNI of Japan is 45180 US dollar in 2011, while GNI of US is 48450. However, it doesnt inculpate that the purchasing power of Nipponese is lower than America citizen. The consumer spending is enormously high in Japan. Spending is an important usance of consumers. Consumer spending plays a signifi give the bouncetly stinting factor since it usually coincides with the overall consumer confidence in a nations economy. High consumer confidence indicators usually relate to higher levels of consumer spending in the economic market.Consumer confidence provides organisations and pipelinees with an analysis on consumer perception. (EconomicsHelp, 2011) From CIA factbook, we can figure out that Japanese is the third country which got higher purchasing power parity toward to Asia area, besides China and India. Moreover, The Japanese are very loyal to unconnected p expectigious fashion brands such as Louis Vuitton and Gucci. The sales of these co mpanies have been growing steadily with support from materialization consumers. As a subsidiary of Abercrombie &Fitch, Hollister must play a leading role in fashion trends if we focus on marketing packaging.WeaknessThe main weakness for Japan divided by two parts. Obviously, the first weakness is the unpredicted geography phenomenon. eitherbody knows that Japanese business have got a tough condemnation by tsunami and earthquake in recently years. These two disasters are having large negative economic cause on Japan since it is a major role in global supply chain and as a producer of final produces. Based on this fact, we think Japan is not a good place to come in up facility in order to produce clothes. Second of all, According to Reuters (2011), Japans new government activeness faces a dilemma over how to keep its campaign promises while reining in huge debt, a fragile economy that could slip back into recession, and strains in ties with close security ally the United Stat es. Thusly, we think Japan will not be an appropriate country because it got unstable policy-making risk.OpportunityNo doubly that Japan is the core of fashion in Asia area. It is famous by its creativeness and design toward to the whole world. As a result, as an apparel company, Japanese market has potential luck to be entered. According to Japanese fashion market report (2011), here we have two advantages to rise that Japan is a country full of fashion. 1. Japan is a critical fashionable country because it holds some(prenominal) fashion events one-yearly. Thusly, Japanese consumers are sensitive to trend cycles in the world(prenominal) fashion market because there are so many brands enter into Japan market every year. 2. They are significantly influenced by Fashion Magazines. Although technology is developed these years, magazine is becalm playing an important role in Japanese teenagers life, like Mina, Rays, Vivi and etc. So if Hollister invest in Japan, focusing on magazi ne will be a good choice for this company when they doing marketing promotion.ThreatEverything has two sides. Since Japanese fashion market is full of opportunity, it is in like manner highly competitive. According to Imported Luxury Brands Market in Japan gravestone Research Findings 2011, imported luxury brands market in 2010 is estimated at 831.4 billion yen, 92.9 % of the size in prior year. This data mode that there are many companies already in the market. The number of competitors in Japan is huge. According to Appendix 6, 24% market is owned by US brands. After doing research, we known that Hollisters main competitors, Gap and American eagle outfitters, have already entered Japanese market. Whats more, even though they are owned by the uniform company, Abercrombie & Fitch, probably another biggest competitor, entered Japanese market since 2009. Appendix 7 In a conclusion, although Japan got higher purchasing power and fashion opportunity, it is still not an appropriate country to be entered because of the political risk and high competition.SingaporeSingapore is located in southeastern Asia at the grey tip of the Malay Peninsula the city-state of Singapore consists of a main is let pop out and some 60 islets. The country has a creation of 4,740,737 in which the capital and major cities occupy 3,654,103 people according to the data last year. Although the country seems not as large as many other countries, Singapores gross domestic product was $326.8 billion and its per capita GDP of 61,103.36 US dollars in 2011 estimates is comparable to that of leading Western European nations, and its high type of keep and steadfast trading links have secured its position as one of ASEANs leading (Global passage Warrior, 2012).Strengths1) Outstanding task system.When Japan cuts its incarnate tax arrange this Sunday, the U.S. will have worlds highest tax rate on business income. The following chart has shown the data. (Figure Source Isidore (2012), CNN Money)However, Singapores corporate income tax rate is low which in a immediately of 17% since 2010. It is often cited as the leading example of countries to slim corporate income tax rates and introduce various tax incentives to attract and keep global investments. Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for s conceiveholders. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempt from further taxation (Janus, 2012). Two of Singapores unique advantages are its low effective personal and corporate tax rates. Personal income tax has a tier system that starts from just 0% and goes up to 20% for income above $320,000. Similarly, effective corporate tax rate for Singapore private limited companies for profits up to $300, 000 is 8.5% and capped at a flat rate of 17% for profits above $300, 000 (Janus, 2012).Whats more, there are no dividend or capital gains taxes in Singapore. 2) High purchasing power.The GDP per Capita, in Singapore, when adjusted by Purchasing spring Parity is equivalent to 278 part of the worlds modal(a). Consumer Spending in Singapore increased to 27,485.40 in may of 2012 from 27,467.20 in February of 2012. Historically, from 1975 until 2012, Singapore Consumer Spending averaged 12,752.67 reaching an all while high of 27,485.40 in May of 2012 and a videotape low of 3,553.90 in February of 1975 (Trading Economics, 2012). 3) Exchange rate & Labor cost.The USDSGD spot exchange rate depreciated 0.0194 or 1.56 percent during the last 30 days. According to Janus (2012), The Singapore dollar has been consistently appreciating against major currencies. It also got about $260 billion based on average exchange rates or $252 billion based on year-end currency rates last year.Historically, from 1980 until 2012, Singapore Labor Costs averaged 96.00 reaching an all time high of 129.93 in F ebruary of 2009 and a record low of 57.37 in May of 1980. These data are all lower than Hong Kong and Japans (Trading Economics, 2012). 4) Political stability.Singapore is rated No.1 as the most politically stable country in Asia (Janus, 2012). 5) English is main language.Singapore has a 10-year compulsory education program commencing at the age of 7 years. English is the first language and the medium of instruction in schools (Global Road Warrior, 2012). This means nigh cytosine percent of People in Singapore speak and netherstand English well, which would bring much easier intercourse for Hollister to enter into the country, especially to the communication within the solicitude level of Singaporean while doing business. 6) Quick and escaped registration.It only maintains about 1-2 days to incorporate a company in Singapore, with the government providing assistance along the way (Janus, 2012). As the easiest place to do business in the world, Singapore company registration is a quick and easy process, which involves just two procedures that can be completed online within 24 hours for a retail outlet. A Singapore subsidiary can be wholly owned by a foreign company and is considered a separate legal entity from the parent company. Also, a Singapore subsidiary is in the main treated as a topical anesthetic resident company and thereof is entitled to tax benefits available to local companies (Janus, 2012).Weakness1) If you want to set up a limited liability company (LLC), there are two conditions that are required it must have two agents acting on its behalf in the country and one of them must be a Singapore resident, a native Singaporean, or soul who has a Singapore employment pass. 2) Singapore is among the most expensive in the world, as the cost of living here is very high. 3) Hollister has to film Singapore resident and qualified Singapore auditors to do the business noticeings to incline with government.Opportunities1) Singapore is one of the w orlds famous shop paradises. Its central business district has a lot of upscale shopping square from the latest fashion clothes, jewelry, watches, perfume, cosmetics to the entertainments goods and casual necessities etc. Singapores retail sector has done well in 2010 and well into this year on the back of the tourism sectors robust performance and in spite of a slowing economy in recent months. According to the latest retail sales index released by the Singapore Department of Statistics, Singapores retail sales excluding automobiles increased 7.4% year-on-year in August 2011(Janus, 2012). Hollister, as the subsidiary brand under Abercrombie & Fitch, has very large opportunity to get benefits from opening retail stores in the country. 2) Singapore is also ranked the No. 1 in tourism so there is the potential to do business.ThreatsFashion is a highly competitive industry worldwide, but Asia stands out for its stylish and practical design. Although Hollister is also a very famous Ame rican brand under A&F, it still faces tough competition from Asiatic fashion. Since Singapore emerges as global fashion apparel hub with large amounts of upscale shopping squares, the opportunity to open shops in this fashionable country could also become a big threat.Hong KongHong Kong is a Chinese special administrative region situated in eastern Asia, with a 455-mile coastline on the South China Sea and a 19-mile border with China. Hong Kongs population is 95 percent Chinese, with the majority coming from neighboring Guangdong province or within Hong Kong itself. The population was about 7,122,508 in 2011. Cantonese and English are the two official languages. Hong Kongs free-market economy was vulnerable to the global economic crisis of 2008, but its increasing integration with China helped it to quickly recover (Global Road Warrior, 2012). The GDP in Hong Kong was worth 243.67 billion US dollars in 2011, which rough equivalent to 0.39 percent of the world economy (Trading Econ omics, 2012).Strengths1) Well located.Hong Kong is located at the heart of Asia, alongside many of the regions most exciting business market such as Guangzhou, Taipei, Manila, and Bangkok etc. And it is the gateway to Mainland China. 2) exhaust avocation port.Easy government policies for foreign fashion brands. Hong Kong is known for its free port status and easy customs procedures. transaction is paid on very few products. 3) Tax-friendly economies.Hong Kongs profit tax is capped at 16.5 percent according to the 2011 study, and there are no capital gains and dividends taxes (InvestHK, 2012).Weakness1) Most of good locations have already occupied by large local fashion chains or early entering foreign fashion brands. 2) After the global monetary crisis in 2008, the economies of Hong Kong still need to recover. 3) Hong Kong has the lowest GDP in 2011 compared to Singapore and Japan.Opportunities1) There are large fashion-hungry population in the Hong Kong market, especially many people from Mainland China love to go shopping in Hong Kong. 2) Some foreign retailers are successful in the Hong Kong retail market. In addition, Abercrombie & Fitch was prepared entering into the country, which would in a sense lay a good foundation to its subsidiary, Hollister.Threats1) Competition with Many local fashion brands, such as GIORDANO, BALENO, Bossini, Esprit and so on. And what is worsening is that these local brands all offer very cheap prices. 2) Many other foreign fashion competitors Hong Kong shopping gists are creating space for Swedish brand Monki and U.S brands Gap, Forever 21 and American eagle. Others like H&M, Zara, Mango and Japanese brand Uniqlo have already established outlets in the city (Thondup and Tsang, n.d.). After reviewing the strength, weakness, opportunity, and weakness in the three countries, we chose to expand business into Singapore. We strongly recommend Hollister Co. to invest in Singapore where is a stable and strong economic, and a low risk country in political change.SingaporeMarketingSingapore is an island country. The land area is 714.3 Square kilometers. The population in 2011 is 5,260,000. The population density in 2011 is 7,257 per Square kilometers. Shenton Way is the tail largest financial center, the adjacent Keppel port is one of the worlds busiest ports. According to Singapores economic structure, the manufacturing sector accounted for 25%, the construction industry accounted for 5%, wholesale and retail trade accounted for 16%, acid and telecommunications accounted for 11%, the financial operate industry accounted for 12%, business services accounted for 12%, the hotel and catering industry accounts for 3%, the other accounts for 16%. Due to it is a minute country, shopping is considered a kind of sport in Singapore. The government draw up a lot of plans on developing their shopping market. For one thing, many shopping malls virtually per square mile are located in Singapore. Orchard Road, one of the famous shopping streets, is a 2.2 km long street and it is a retail and entertainment warmheartedness in Singapore. Orchard Road also contains a large number of high-end restaurants, coffee chain, nightclubs and hotels.There are many famous building and variety of retail store as well as there is large number of luxurious products with well-known brand. Theres practically a shopping sale of sorts all year round in Singapore, with the most notable one being the Great Singapore Sale. On the other hand, its a year-round shopping paradise. You only need to topic a walk down Singapores iconic shopping districts to find out whats in store for you. The best time to visit is during its annual eight-week Great Singapore Sale, when all kinds of discounts and deals pop up island-wide from late May through July. Great Singapore Sale 2012 will be held for 8 weeks from Friday, 25 May 2012 to Sunday, 22 July 2012. The Great Singapore Sale 2012 has been timed to coincide with the peak travel seasons to alter visitors to enjoy the fantastic deals all some.During the Great Singapore Sale 2012, you can enjoy up to 70% discount for everything on sale, anywhere in Singapore. From posh shopping centres in Marina Bay and Orchard to small stores in the suburbs, you will find fabulous deals for clothes, gadgets, beauty treatments, spa, attractions, and even food (Great Singapore Sale, 2012) Furthermore, Singapore set large variety shopping malls to meet the different requirement of various conferences. The heathen shopping enclaves in Singapore include Little India and Chinatown both are tourist attractions in their own right, steeped in ethnic colors and flavors. (Singapore Shopping Madness, Yong Shu Hoong)For instance, Chinatown mainly offers authentic Chinese products including tea, herbs, medicines, foodstuffs, silks, cheongsams, handicrafts, household items and antiques. Finally, Singapore duty free shopping prices at all three terminals are competitive with most place s in Asia. The slippery greenback means rates are fluctuating constantly. Pick up a 50ml Dior jadore eau de toilette for around S$96 (US$76), Chanel Alure EDP 50ml at S$112 (US$89). (Singapore Shopping Madness, Yong Shu Hoong) charitable Resource forethought charitable Resources Management PracticeDue to the explosive growth of the Asian economies over the past two decades, substantial attention has been focused on the human resource management (HRM) practices of Asian businesses. Cultural diverseness of manpower in modern business organizations against the backdrop of globalization has attracted the attention of many researchers and analysts. By the 21st century, Singapore has developed into advanced and high-income economies, specializing in areas of competitive advantage. As one of the four little dragons in Asia, Singapore can be an interesting subject to study and it is also important for MNCs to visualise Singapores advantages and disadvantages of its human resources man agement practice. Hollister Co. is an American lifestyle brand by A&F Corporation.The concept was at a lower price point than the parent brand through its SoCal-inspired image and casual wear. Hollister Co. could take some advantages of Singapores human resources management practice to expand its business in Singapore. According to a demographic survey, as of 2011, the population of Singapore is 5.18 million people, of whom 3.25 million (63%) are citizens while the rest (37%) are permanent residents or foreign formers. The government is considering capping these workers, although it is recognized that they are crucial to the countrys economy, as foreign workers make up 80% of the construction industry and up to 50% in the service industry. (Building and Construction Authority, April 2011) Singapore is a multicultural country with a majority population of Chinese (74 percent), with substantial Malay (13 percent) and Indian minorities (9.2 percent). The country has four official lang uages consisting of Mandarin, Malay, Tamil and English.English is the main working(a) language and is the mandatory first language in all schools in Singapore. Most Singapores Chinese derived from southern China, especially in Fujian, Guangdong and Hainan, of which 40 percent is Fujian, the followed is Chaoshan, Cantonese, Hakka, Hainan and Fuzhou. To developing human resource management practice for Hollister Co., we should understand Singapores basic Human Resource Management (HRM). Hollister Co. is categorized as a service business while Singapore is a country which custodys are highly cerebrate to services sectors. In addition, considering the features of Singapores location, demography and other fields, its human resources is consisted of Western and Asian features. We will focus on Singapores HRM style and features of work forces to develop the human resources management practice for Hollister.Human Resources Management StyleLeadership and the Workforce in Singapore is a su rvey that pronounced by the Singapore Human Resources Institute. Data were obtained from 192 respondents who were engaged in a wide variety of Singaporean industries. A come up of 68 per cent of the respondents are HRM practitioners. Many of the respondents are supervisors reporting to senior management such as CEOs and managing directors. (Chart 1) completely the data shows that globalization has had its impact on Singapore in a much more pronounced way. Singapore has been reputed for very advanced HRM practices both at the national and the international levels. In addition, Singapore has been especially known for its international HRM practices in a small city state. On the other hand, Singapore didnt focus on manufacturing it is a city state with a greater focus on financial services and other services instead, such as banking and insurance.Moreover, Singapore has a similar diversity culture of shopping centers manned by equally culturally diverse workforce. (Malikanrs, 2010) Singaporean enhances on performance record and job experiences, appropriate training and seniority when considering promoting its employees. Singapore has no set patterns of recruitment for either the entry level or place level positions due to affecting by the Western model. However, Hofstede (1984) found that the national culture of Singapore is high in power outmatch. In high power surmount cultures, superiors and subordinates treat each other as unequal. Singapore is also called a nanny state in which people are supposed to do exactly what they are told. The mixed unique feature of national culture therefore makes Singapores HRM practices more complicated.Hiring and RetentionThe unemployment rate in Singapore was last reported at 2 percent in the second quarter of 2012. Historically, from 1992 until 2012, Singapore Unemployment Rate averaged 2.4 portion reaching an all time high of 4.8 Percent in September of 2003 and a record low of 1.3 Percent in September of 1997. The em ployment rate for older residents made good progress. A record 61.2% of residents aged 55 to 64 were working in 2011, up from 59.0% a year ago. The employment rate for both males (from 75.0% to 76.4%) and females (from 43.4% to 46.3%) in this age group rose to new highs in 2011. Singapores workforce is inherently diverse due to their multi-racial community. Employees from different generations, gender, nationalities and cultures often work together in the same organization. It is therefore important for organizations to put in place policies and practices to build an inclusive and harmonious workplace. A diverse workforce that is well-managed can bring about better business performance and higher employee engagement.Training and AdvancementThe profit in educational profile of older residents was another contributing factor as the better educate were more likely to participate in the dig market than those less(prenominal) educated. The educational profile of the labor force contin ued to improve, as the better educated younger residents enter the labor force and the comparatively less educated older cohorts retire progressively. The share of leg holders in the labor force almost doubled from 15% in 1999 to 28% in 2010. Conversely, the lower educated labor force from 36% to 22% over the same period. (Chart 2)CompensationChart 3, 4, and 5 in appendix show the average salary, change stateover rate, and worked hours of Singaporeans. The average salary for Singaporean to work 46.3 hours per week is around Singapore $ 4,000(about $ 3,000). The average over-time work hour is 3.7 hours a week. (Employment Situation in Fourth Quarter 2010, 2011)Ideal Human Resource ManagementFirst of all, we would like to talk about language skill. As mentioned above, English is the official language in Singapore. In addition, Singaporeans have high level of education and language skills in average. Therefore, the company can hire local employee without worrying about language barri er. Furthermore, well analyze workforce. Due to the mixed unique feature of national culture, Singapores workforce is inherently diverse. Employees from different generations, gender, nationalities and cultures often work together in the same organization. On the one hand, it is easy to train and educate new employees to understand Hollisters organizational cultures and requirements. On the other hand, Hollister Co. also has to understand the mixed unique feature of national culture. With the aging of population, Singapore government also encourage foreigner to go there and look for a job. In the meanwhile, Singapore advocates foreign enterprise producing products which is suitable for the elderly.This is another opportunity for Hollister Co. to expand their business in Singapore. Finally, well talk about hiring, training, retention, promotion and salary. The unemployment rate in Singapore is very low, the educational background of workforce is becoming higher and higher, the low la bor turnover and high level of wage show the Singaporeans are likely skill oriented workforces. The average monthly wage in Singapore is around 4,000 Singapore dollars which equals $3,000. It is a little moment lower than the average income that American household makes. (How much does the average American make breaking down the us household income numbers, 2011) Because Hollister Co. does not have to pay so much money for workforce training, we purpose Hollister Co. offer a somewhat high wage than the current clothing stores in Singapore and use bonus to motivate employees.Political and Legal EnvironmentLegal EnvironmentThe Republic of Singapore has a legal system largely based on the British Westminster model, where the power to govern and administer the country is divided among the executive, the Legislature and the Judiciary. Ranked by the World Banks report, Doing Business 2007 How to clear as the most accommodating country to do business in the world, Singapore is a strat egical and reliable base for foreign investors to invest in the emerging Asian markets. (Overview of the Legal Environment of Singapore, RSM Chio Lim) Singapore is well known as the Switzerland of Asia. With a population of approximately 5 million people, Singapore has an dumbfounding 90% literacy rate, and over 85% of inhabitants have a secondary or higher education. The country has almost zero crime, zero corruption and no drug problem. (Singapore incorporation Advantages) (International rankings of Singapore, Wikipedia)Political environmentPro-business environment peerless of characteristics in Singapore is its pro-business environment. It means that Singapore has an environment that is favorable for foreign investments and can attract many foreign entrepreneurs. Furthermore, it is easy for investors to set up businesses and make higher profits. Compared to other countries, investors only have to take 1-2 days and they can incorporate a company in Singapore. Because of pro-busi ness environment, Singapore has become one of favored countries for investment (Singapore internalisation Advantages, 2012).Financial assistanceIn order to help start-up companies to gain funding, the Singapore government agencies set up several financial assistance schemes to let start-ups gain access to funding to turn their business ideas into reality. Moreover, Singapore government sets up many private sectors to help investors improve efficiency intone capabilities of their company (Singapore Incorporation Advantages, 2012).Great tax systemFor a starting business, taxes cost is always a top priority. One of features in Singapore is its low effective personal and corporate tax rates. For the personal income tax, Singapore government is based on personal income to design a tier system that starts from 3.5% to 20%. For corporate tax, Singapore private limited companies for profits up to SGD 300,000 is below 9% and capped at 18% for profits above SGD 300,000.(Singapore Incorpora tion Advantages) After 2010, corporate income tax rate will belittle from 18% to 17% in Singapore. Furthermore, there is no capital gain tax. It represents that Singapore government uses a single -tier tax policy. This policy is that when the income has been taxed at the corporate level, companies can give shareholders dividends for tax free (Singapore Incorporation Advantages).Political systemsSingapore government has an open attitude and its vision is broad to the whole world. Its political system is using a rational, pro-business way to enact laws, decide priorities and sets regulations. For example, there is almost no restriction on foreign investment including manufacturing and service activities. Any business is supported by political infrastructure and granted maximum encouragement from the government. This support is an important way to let businesses grow and prosper (Singapore Incorporation Advantages). In addition, the immigration policy is open and flexible in Singapor e. It assists the relocation of foreign investors to set up businesses here. If a business entrepreneur needs to run his business or and hire foreign professionals, the government can make appropriate Singapore work visa provisions to meet his needs and wants (Singapore Incorporation Advantages).Free trade agreementsFree Trade Agreements is a significant system in Singapore. It means that most products can be imported without barrier. Businesses can enjoy many benefits including tariff concessions, preferential access to certain sectors, meteoric entry into markets and Intellectual Property protection. Moreover, Free Trade Agreement is a way to connect Singapore to their trading partners such as United States, Europe, China, Hong Kong and, Japan (Singapore Incorporation Advantages, 2012).(Singapore Incorporation Advantages, 2012)High Quality of keepOne of reasons why many investors set up their business and relocate to Singapore is the theatrical role of life. Singapore is in a c onvenient location and provides a great public and private transportation, a dear and clean environment to live. It also offers an outstanding support system for businesses. Singapore is suitable for work and living.(Singapore Incorporation Advantages, 2012)Economic and Financial EnvironmentIn fact, the economic situation in Singapore is very strong and stable, because the attitude of government is open-minded and this country is anti-corrupt. The economic growth is also steady. Singapore is one of countries in the world that has the largest per capital Gross Domestic proceeds (GDP). The Gross Domestic Product (GDP) is equal to the broad(a) expenditures for all final goods and services produced by a country in a period of time and measures national income and output for a countrys economy. According to the World Bank, the Gross Domestic Product (GDP) in Singapore was worth 239.70 billion US dollars in 2011. The GDP value of Singapore is roughly equivalent to 0.39 percent of the w orld economy. Historically, from 1960 until 2011, Singapore GDP averaged 51.8 billion USD reaching an all time high of 239.7 billion USD in December of 2011 and a record low of 0.7 billion USD in December of 1960 (Trading Economics, 2012).(Trading Economics, 2012)The annual growth rate in Gross Domestic Product (GDP) measures the increase in value of the goods and services produced by an economy over the period of a year. It considers a full year of economic activity and avoids the need to make any type of seasonal adjustment. The Gross Domestic Product (GDP) in Singapore expanded 2.00 percent in the second quarter of 2012 over the same quarter of the previous year. From 2007 until 2012, Singapore GDP annual growth rate averaged 5.1 percent reaching an all-time high of 19.8 percent in June of 2010 (Trading Economics, 2012).(Trading Economics, 2012)Singapore exchange rate is range from $1.30 to $1.50 for the last 10 years. It is kind of stable. Monetary Authority of Singapore (MAS) m anages the exchange rate of the Singapore dollar. Investors can transfer funds in and out of Singapore freely in any currency. Furthermore, Singapore government bond has very good rating. Standard & Poors (S&P) in August 2011 gave it AAA and Moodys gave it Aaa in 2008. According to China Post, Singapore banking system is rank top four in the world. When other country have problem with financial crisis, most of Singapore banks were rated B by Moody. We have to realize more about Singapores banking system for doing business.Banking SystemCash and CheckIn Singapore, for foreigners or tourists, it is very convenient to bring their own currency and exchange from market to airport. Foreign currency banknotes and travelers checks can also be changed easily at most banks. In addition, ATM link to global banking networks can be found everywhere. Foreigners or tourists can pay for most things by using a credit card in Singapore. (Singapore Banking System, 2012) Singapore banks study checks t hat can be processed electronically. Writing check can only use black and savoury inks. If a person only wants to deposit and does not cash the check, he has to draw two tally diagonal lines in the upper left corner. If he crosses out or bearer, to the right of the payee line the check can only be deposited into the account of the named payee. When a person deposits check, he has to write his name, account number and telephone number on the back of the check. (Singapore Banking System, 2012)ATM-Automated Teller MachineATM machines for local banks are everywhere in the Singapore. In fact, all of the Singapore local banks and some of the international banks such as Citibank, HSBC and Standard Chartered have issued ATM cards. It considers that foreigners and investors have to withdraw money immediately in a place. However, there are not many branches and ATMs in the international banks. Here is a limitation and daily withdraw amount from ATM cannot exceed SGD$3,000. (Singapore Banki ng System, 2012)Cash FlowBecause using check will take time to clear the bank, companies have to take that into consideration for their cash flow. There is a well-established banking system with three major local banks that offer a full service of consumer banking in Singapore. It includes ATMs, telephone banking and internet banking. In addition, besides local banks, some international banks in Singapore are doing the same business. Recently, those international banks have been allowed to set up branches and 15 ATMs. (Singapore Banking System, 2012) score StandardsSingapore accounting standards are followed the International Accounting Standards and International Financial reportage Standards (Ifederal official) issued by the International Accounting Standards Board. Financial Reporting Standards (FRS) is accounting standards in Singapore. All companies with financial period starting on or after January 1, 2003 have to comply with Financial Reporting Standards (FRS) (Introduction t o Accounting Standards in Singapore, 2012). One of the main principals of Singapore accounting standards is accrual-based accounting. It is the same as United verbalize General Accepted Accounting Principle (GAPP). Under accrual basis, the revenue and expenses are recognized and put down in the period when they occur but not receive or pay cash.They are put down in the accounting records and reported in the financial statements in a period of time. The function of preparing financial statements on the accrual basis is to inform users not only of past transactions including the payment and acknowledge of cash, but also of duties to pay cash and funds that have received in the future (Introduction to Accounting Standards in Singapore, 2012). Actually, there are contains about 39 different standards with each standard named as FRS X in Singapores accounting system. For example, FRS 1 represents Financial Statement, FRS 2 represents inventories and FRS 18 means revenues. In addition , each standard involves a specific topic like presentation of financial statements, recognition of revenue, accounting for inventories, and so on. (Introduction to Accounting Standards in Singapore, 2012)Cultural of SingaporeIn Hofstedes theory, there are five-spot dimensions of culture, which are power distance, individualism, masculinity/femininity, uncertainty evasion, and long-term druthers. The five dimensions are used to make a distinction between country and country. The family of Singapore is essentially consisting of Chinese people. Around 77% of Singaporeans are Chinese. Therefore, the culture of Chinese does influence Singapore a lots. For example, the Buddhist-Shinto societies have an additional dimension which is long-term orientation (Geert Hofstede, 2011). Singapore Five Dimensions elaboration Asian Countries Dimension Culture http//www.geert-hofstede.com/hofstede_singapore.shtml (Geert Hofsted Cultural Dimensions-Singapore, 2011)Power distanceWith Chinese popu lation, Singaporeans are affected by Confucian thinking and values, so they adhere to a class-conscious relationship in their society. They believe that their society is composed of people who are in different standing and unequal relationship. The differences in standing are the signal for people to evaluate each other. The lower standing people should heed what a superior says. In addition, junior and less experienced people are expected to keep their opinions in their hearts. This kind of high power distance has been characterized in Asian society for at least two thousand years (Geert Hofstede, 2011).IndividualismIn an individualistic society, we can find the relationship of people is loose. The United States is the most individualistic society, but Singapore is ranked 53th out of 66 countries (ClearlyCulture, 2009). In Singapore or other Asian societies, children are raised(a) to stay with the family. Children are educated to be a part of the group and stay in the group when they are infants. Children are taught to be dependent on the group, to make decisions which benefit the group, to support the group, and to maintain the honor of the group. The group can be family, school, or company. All of the decisions which are made by the elders for the children are common. After the Singaporean children become adults, they are not expected to cut off the former relationship (Geert Hofstede, 2011). masculinityA high score on this dimension means competition can drive this society to success. Traditional Chinese culture is a typical masculinity. Singapore has almost 77 percent of populations are Chinese. Children are always taught to compete with other people in the school. Singapore is in the almost middle of the scale but a little on the feminine side. That means that there are still some softer aspects of culture like leveling with others and sympathy for loser in Singapore (Geert Hofstede, 2011).Uncertainty avoidanceComparing with other countries in the worl d, Singapore is a country with low degree of uncertainty avoidance. Singaporean comply with their rules because their high PDI. That is why Singapore is a Fine country (Geert Hofstede, 2011). Because Singaporeans are indirect and implicit in(predicate) in their communications, they will not publicly use the word no likewise, their yes does not usually mean assent (Kwintessential, 2011). Unlike other Asian cultures, the western cultures also affect Singapores culture. Therefore, the degree of facing uncertainty avoidance is lower than other Asian countries.Long-term orientationThe short-term orientation is related to truth and the long-term orientation is related to virtue. Singapores cultural qualities show the doggedness and sustained efforts support the long term investments. People believe that the truth depends a lot on situation and time in a society with a long-term orientation (Geert Hofstede, 2011). Doing business in Singapore, the relationship with other people is very im portant especially you must respect the elders. Also, you must be more patient because the organization will show their purpose which is for long-term profit, not short-term gains (Kwintessential, 2011). organizational StructureAn organizational structure is setting the company into different levels, including person and work, so each person needs to perform and accomplish the company goals (Chapman, 2008). There are two types of organizational structures which are flat organization and hierarchal organization. A flat organization is an organization which is few or no levels between managers and employees. The advantage of a flat organization is top management contact directly with the staff level employees. Middle managements are eliminated, so it can also reduce the organizations budget cost. In this structure, the communication between managers and employees would be improved and the organization is fast to respond to consumers and market conditions.The disadvantage of a flat or ganization is difficult to maintain when the organization grows bigger. A hierarchical organization is the layout of a pyramid. Every employee obeys someone else in this organization. The advantage of a hierarchical organization is the management can control closely. Also, the role and responsibility of each employee are distinguished clearly. The disadvantage of this organization is the decisions will be difficult to make because the organization is consisted of a multilayer management. It be a lot to maintain a multilayer management and the communication would be slow from the bottom to the top (Colette).Hollister Co. is a subsidiary company of Abercrombie & Fitch, so the management chart of the Hollister is the same with Abercrombie & Fitch. The following table is Hollisters organizational structure. In this table, we can consider Hollister is a hierarchical organization. An Executive VP or senior VP head all major business processes of the company. The CEO at the top, EVP/SVP o n the second, EVP/SVP on the third and SVP on the fourth level are four basic layers at senior management.This hierarchical structure makes Hollisters management make decisions quickly and let employees in each group understand their roles and responsibility clearly. On the other hand, there are still some disadvantages, which are high costs and many layers of communications, in this structure. For example, the SVP of Supply chain needs to go through two management layers in order to reach the CEO of Hollister. The hierarchical structure delays the communications between management and employees. A hierarchical structure costs a lot to maintain for Hollister. Hence, in a recession, Hollister might restructure to reduce costs and improve communication.Source http//www.cogmap.com/chart/abercrombie-fitch-co (2010)Hollister still can use its hierarchical structure into its international markets such as Singapore. Singapore is an open country and there is no limitation in Singapore, so H ollister can use any types of organizational structure they want. If Hollister use the hierarchical structure successfully in its home country and in other international markets, Hollister should use the same structure when they expand to Singapore. Singapore is also a hierarchical structure country because its high power distance.Hollisters International intricacy StrategiesAfter review Hollister Co. and Singapore cultures and structures, we put forward three strategies which Hollister can use to expand its business to Singapore by exporting, licensing or wholly owned affiliates. Exporting is the first way the company can expand into a new market. By exporting, Hollister does not need to invest in Singapore and can test Singapores market. The disadvantages of exporting are Hollister has to suffer tariff and non-tariff barriers, high transportation costs and depend on foreign importers for product distribution. The second strategy is Hollister can give a licence of its design to a Singapore Apparel Company. This way Hollister can earn profit without investing and worthless tariff and non-tariff barriers. The disadvantage of licensing its design, Hollister might be subjected to the local apparel company becomes its competitor.Hollister also cannot control the attribute of products which the licensee produces, so Hollisters brand or reputation is on risk. The third strategy is that Hollister can expand to Singapores market by itself. Hollister can choose a place where there will be a lot of people, including domestic residents and tourists, to visit such as CentrePoint, the most popular mall in Singapore. The advantages of expanding itself are that Hollister can have complete control and receive all of the profits. The disadvantages of expanding itself are the high costs and the greater loss if it fails.RecommendationAfter review three strategies, we recommend Hollister to expand itself in Singapore. Hollister has enough capital to invest into Singapore beca use it has a powerful backing, Abercrombie and Fitch. This way Hollister can keep their quality of products and have complete control. Hollister can test the market and the market condition by opening the first in Singapore. In order to be success, the most important things are that Hollister needs to learn Singapores culture and establish the relationship with the consumers and suppliers. Hollister can adapt to the Singapores culture and consumer gustation by reviewing a quarter of sales. After its sales grow stably, Hollister should continue to open more stores in Singapore.