A Study On Internationalization Strategy Of Baigou’s Suitcase&Bag Industry

China is a big producing country of Suitcase&bag. The Suitcase&bag industry in Baigou is a pillar industry of Baoding, and it is also one of the pillar industries of Hebei province. As a big country of producing Suitcase&Bag in the world, China has produced nearly a third of the total production of the world’s Suitcase&Bag. Its market share cannot be neglected. However, due to excessive dependence on OEM production, our Suitcase&Bag industry has some bottleneck problems in the process of internationalization. China Suitcase&Bag industry has its own advantages. Lower labor costs, cheap raw materials, and industrial clusters have made China’s Suitcase&Bag industry be able to make great progress in the world market. As all knows it, our main success is in the low-end market, due to lack of sound international brand, we have not made significant achievements in the high-end Suitcase&Bag market. As we all know, there are five major Suitcase&Bag industry bases. I will use the SWOT analysis method to analyze the development of Baigou’s Suitcase&Bag industry. Through the analysis, we all believe that Baigou’s Suitcase&Bag industry will eventually go to the world, but there are a lot of problems in this internationalization process. So it is very important to study the internationalization strategy of Baigou’s Suitcase&Bag industry.China’s Suitcase&Bag industry is famous for base operation. As one of the most important industrial bases, the development of Baigou’s Suitcase&Bag industry has been highly anticipated. On September16,2010, Baigou city formed officially. Baigou is located in the security triangle hinterland of Beijing Tianjin and Baoding. It is102km south to Beijing,108kilometers east to Tianjin,62km to Baoding. The transportation is very convenient to many cities. Baigou has been fully integrated into the surrounding Beijing and Tianjin, which is also in the "a half-hour economic circle".Baigou have a unique cost advantage, geographical advantage and scale advantage. Due to the existing scale production capacity, Baigou has been the largest Suitcase&Bag production and sales base. There are two specialized wholesale markets in Baigou. But there are still a lot of disadvantages in Baigou’s Suitcase&Bag industry. Now there are not enough talent people who can provide adequate intellectual support for the marketing, especially for the design of the Suitcase&Bag, which constraints the development of Baigou’s Suitcase&Bag industry. Baigou’s Suitcase&Bag products are still concentrated in the middle and low-end market. Most of the business is individual workshop. The management mode will constrain the development of Baigou’s Suitcase&Bag industry. Baigou’s Suitcase&Bag industry has great opportunities, and at the same time, it also needs to deal with great challenges. With the right development direction, the Suitcase&Bag industry will get a rapid development. We need to pay more attention to the following problems during the development of Baigou’s Suitcase&Bag industry. For example, the competition from foreign brands, the introduction of professionals, the marketing model changes, the rapid development of e-commerce and the increasingly intense competition.At the same time, I will also analysis the global Suitcase&Bag market. Through the research of the global Suitcase&Bag market as well as several typical Suitcase&Bag markets, we will find the global Suitcase&Bag industry is mature, especially some of the famous Suitcase&Bag products were from abroad. These famous brands all have a long history, the great selling point of these famous products are their rich culture connotation. These brands occupy the top of the Suitcase&Bag brand pyramid, they can easily get high brand premium on the Suitcase&Bag market. We also noted that foreign Suitcase&Bag market is more mature, unlike China’s OEM production or processing, they pay more attention to the breakdown of the consumer market. After having a fixed consumer groups, they do not focus on selling products, but how to improve the ability of getting premium. Meanwhile, the developing countries have become their Suitcase&Bag products processing plants. Their low-end Suitcase&Bag products mainly rely on import. Therefore, we find that there is a great potential market for the development of China’s Suitcase&Bag industry. After years of OEM production, we have excellent production technology, the only thing which we lack is that we do not have our own famous brands, advanced management mode; there is no specific road to the international Suitcase&Bag market. As a large Suitcase&Bag industry base, Baigou has strong production capacity. Through the research, we try our best to find out the internationalization strategy for the Suitcase&Bag industry in Baigou. We believe that the future development of the Suitcase&Bag industry in Baigou region will be very bright. So it is very important to study the internationalization strategy of Baigou’s Suitcase&Bag industry.The product can be imitated, but brand culture can’t be copied. In order to get success in the international Suitcase&Bag industry in the world, we must create sound international brands. However, due to the long-term of OEM producing and sample processing, we have lost the power to create a new brand. Many companies dare not to invest in the product design and brand building. They are afraid to fail. Due to the rising of raw material, profit margins become smaller and smaller. Therefore, change from product marketing into cultural marketing becomes essential. Zhao Zhong Xiu, a professor of China Foreign Economic and Trade University, said that the direct cost of the luxury is not more than10%, so the rest are all brand premiums. Therefore, cultural marketing is an important part of the internationalization strategy of the Suitcase&Bag industry. The sound international brands can not only open up the market but also be able to bring a considerable premium.If we want to study the internationalization strategy of Suitcase&Bag industry, we inevitably have to mention the transformation of management mode. Most of the companies in Baigou are family business, so we have to consider the introduction of professional managers. We must change the family business model into the management model of professional managers. In order to have great progress, we must achieve the final transformation of management mode.The continuous development of the economy leads to the increasing demand of Suitcase&Bag. People pay attention to the practicality of the Suitcase&Bag as well as its favored decorative. So it requires the companies to refine the consumer position. Though the analysis of LV, we can learn that right consumer position can bring high brand premium.Baigou’s Suitcase&Bag concentrate on the low-end market; the added value is relatively low. So they are susceptible to the limitations of international trade barriers. Many countries have set anti-dumping and countervailing trade barriers for our Suitcase&Bag exporting. At the same time, due to raw material constraints, our Suitcase&Bag products have some problems in the detection of harmful substances. This will not only affect the export of our luggage, but also increase the cost of testing, thus it will weaken the cost advantage of Baigou’s Suitcase&Bag industry. The study on internationalization strategy of Baigou’s Suitcase&Bag industry is important to China’s Suitcase&Bag industry. I hope my research can be able to contribute to the development of Baigou’s Suitcase&Bag industry.