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Authors:
Gabriele Suder (SKEMA Business School)
Published in:
2010
Length:
15 pages
Data source:
Field research

Abstract

As part of the Finnish textile industry, Marimekko is an integral part of a large market grouping of more than 500 million consumers, a single currency for 16 member states and more than 20 million companies: the Single Market of the European Union. The group designs, manufactures and markets premium clothing, interior decoration textiles, bags and other accessories under the Marimekko brand. Its designs are distinctly known across Finland and abroad. Interestingly, as the EU states, ''textiles and clothing are among the most traded goods in the global economy. After China, the EU is the world''s second largest exporter of textile products''. A 2005 surge in imports from the Far East had caused significant damage to this sector in Europe, and the international economic outlook had weakened notably during the second half of 2008, when economic growth slowed down globally into the 2010s and the Euro crisis began. In Finland, growth slowed down quickly towards the end of 2008. At the beginning of 2009, the economic outlook for the Finnish textile and clothing industry further weakened significantly when the number of orders diminished and profitability dropped. In addition, international competition, counterfeit products, and illegal imports were weakening the sector. Deregulation and liberalization of the EU market led to a business environment that is uniquely integrated but also particularly challenging. It is conceived to enhance competition and, through this, the competitiveness of European companies worldwide. In this context, Marimekko,s management decided to give its Europeanization of cross-border activity a boost, in addition to its interests in the USA and Japan. This case sheds light on the strategy of cross-border expansion, and of incremental Europeanization of Marimekko, with its challenges and benefits stemming from market grouping effects. It also illustrates the importance for European business to adapt to the changing globalized business environment, using those particular, highly advanced politico-economic market group effects to enlarge its home base.

Topics

Internationalization; Single currency; Euro; Market entry; Uppsala model; Market grouping; Internationalization strategy; Expansion; Lobbying; Economic crisis; Global economy; European integration
Size:
SME (small to medium-sized enterprise)
Other setting(s):
1999-2010

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