French Market Limitations

5.2. Limitations for emerging into the French market

Emerging into the French market is a difficult task because of their established heritage brands, their high standards on quality, and the extensive offer. Also, there are political and economic factors that may pose a barrier to the entrance of the Latin American products.

5.2.1. Political Limitations

The political environment is composed of an interacting set of laws, government agencies and pressure groups that influence and limit the activities of both, organizations and individuals in society. The existence of laws and regulations meet at least three purposes: promoting competition and protecting companies from each other; ensuring fair markets for goods and services and protecting

Economic limitations

Economic conditions are critical for strategic planning, as it affects not only the size and attractiveness of markets that the company serves, but the capacity to serve them profitably. This may limit the level of resources that companies can use to try to meet demand. The shortage of raw materials, energy costs and credit may impose significant limitations on the ability of a business to develop new products to maintain inventories or to invest in new production facilities.

France is not a country that promotes imports, mainly because it hurts the job prospects and wages of less skilled workers, and because it fears it will diminish its distinctive culture. Therefore, there is a high import/export cost in France. For importing into France, there is a minimum entry below which duty is waived. The import duty and taxes payable are calculated on the CIF value—the value of the imported goods and the cost of shipping and insurance. The duty rates applied to imports into France typically range between 0-17%. Additional customs fees can be charged to cover the expense of performing any required examinations, verification and or testing of the imported

The positioning of products should be based on their cultural content. Let’s say that a piece is handcrafted by native people using local materials and ancient processes. This makes it a rare and unique piece and therefore, its added value results on a product with a high cost. However, a high price for an unknown brand may not be the strategy which will boost sales, as even though it conveys quality and status, customers may prefer to buy a branded piece for the same price. This was one of the strongest limitations that the pop-up store “di.me” faced.

Lastly, capacity of production is another important limitation for the Latin American designers. Many of the brands are small and some produce hand-made products, therefore, it is hard to keep up with the demand and produce the quantities that concept stores need. “El Camino” association for example, cannot enter to any other stores because of its limited production capacity.

5.2.3. Other