An Export Strategy for a Bridge Joint Manufacture - Essay Example

? An Export Strategy for a Bridge Joint Manufacture Contents Contents 2 Introduction 4 Business and Market Environment Analysis 4 PESTEL Analysis 5 Political 5 Economic 5 Social 5 Technological 6 Environmental 6 Legal 6 Industrial Life Cycle Analysis 7 Market Segmentation and Distribution Channels 8 Porter's Five Forces Analysis 8 The Threat of Entry 8 The Power of Buyers 8 The Threat of Substitutes 9 The Power of Suppliers: 9 Competitive Rivalry: 9 Customer Segmentation and Distribution 10 Customer Segmentation 10 Setting of Distribution Networks 10 Details of the financial issues, practicalities and technicalities 11 Financial Issues 11 Practicalities Issue 11 Technicalities Issues 12 Conclusion 12 References 14 Introduction Ennis Prismo based in United Kingdom is a company that works in the production of rendering products related to the category of manufacturing and other traffic products. The company works to serve a plethora of sectors right from road traffic mechanisms to production of bridge joints helping in relating different regions and also in rendering innovations pertaining to surface and technological designs. Ennis Prismo in terms of rendering services in such various categories related to public needs focuses to enhance on the dimension of safety, reliability, accountability and innovation. Ennis Prismo, an ISO 9001 and ISO 14001 certified company has gained the experience to serve the different service and product categories through the rendering of quality and high standard products. Ennis Prismo operating from its manufacturing plant based in Chorley, United Kingdom focuses on gaining market in different regions pertaining to European and African nations and also to countries relating to Middle East. Thus Ennis Prismo operating both in the traffic and other manufacturing and construction sectors pertaining to roads and bridges has become a highly known brand. Ennis Prismo in addition to marketing its products pertaining to European, African and other Middle East regions is now focusing to gain an effective entry into the American markets for its Bridge Joint products. The paper in this regard would tend to focus on the feasibility of the United States market as a growing export region for Bridge Joints manufactured by Ennis Prismo (Ennis Prismo, n.d.). Business and Market Environment Analysis The business and marketing environment for Bridge Joints in United States would be analysed based on two models based on PESTLE Analysis and also based on evaluation of the Industrial Life Cycle for the same in the region. PESTEL Analysis Political Political environment pertaining to the construction of bridges in United States being analysed reflects that the government of the region focuses more on the repairs and development of existing bridge structures rather than focusing on the construction of new bridges. A survey conducted based on the 2009 period states that out of the total expenditure incurred by United States government on infrastructural development only 6.2 percent was dedicated for the construction of new bridges and highways. However of late political emphasis pertaining to bridge construction is found to change with the collaboration of private bodies thereby gradually cultivating a market for the need of Bridge Joints (The American Road & Transportation Builders Association (ARTBA), 2012). Economic Pertaining to the economic situation in United States it is found that the budgets passed by both the regional and national governments less stress and focus has been rendered in the rendering of investments pertaining to the development of infrastructure related to roads and transportation. Owing to the lack of focus related to the sector a significant drop in the market for the products related to the construction of bridges is expected. Thus economic conditions in United States is found to be less favourable pertaining to the gaining of market for Bridge Joints by Ennis Prismo (The American Road & Transportation Builders Association (ARTBA)-a, 2012). Social Demand for construction and restoration of bridges in United States is earning new social demands. The people in United States now find the existence of bridges in raising the aesthetic beauty of the region and also helping in the ease of transportation of materials thereby reducing the costs of such. Further the rise in demand for bridge construction also relates to the development of the employment status of the people in the region (Copeland, Levine and Mallett, 2011, p.9). Technological The technological environment related to use of bridge joints in the construction of bridges in United States reflects that the bridge construction industry in the region focuses more on the parameters of cost effectiveness in using standardised processes and materials. The United States bridge construction industry thus lays less focus on the realms of innovation which again is the key driving force in the production of Bridge Joints by Ennis Prismo (U.S. Department of Transportation,. 2001, p.26). Environmental Bridge and other infrastructural development and construction industry in United States become the centre of controversies owing to the rise of environmental pollution relating to the rise of air and water pollution. Water pollution emanating from such is being gradually controlled through the use of controlling measures protecting the waste to being washed along to the seas and other water bodies thereby reducing the threat from such (EPA, 2012). Legal The legal environment of United States requires the bridge construction industry to continually inspect the quality of the construction services rendered along with the materials used for the same for helping in the avoidance of grave accidents in the future (Shenoy, 2012). Thus depending on the same the Ennis Prismo can focus on gaining legal support owing to the marketing of its bridge joint products for safe construction works. Industrial Life Cycle Analysis Industry Life Cycle Analysis related to an industry endeavours to analyse the relative position of the industry in terms of four definite stages along the industrial life cycle curve starting from introduction and proceeding over to growth and maturity position before declining over having crossed the saturation point. Industry for the manufacturing and marketing for bridge joints in United States can be perceived still in the Growth stage owing to the gradual understanding of investment requirement for the development of new bridges in the nation. During 2009 it is found that only 6.2 percent of the entire infrastructural spending was only dedicated to bridge construction works (The American Road & Transportation Builders Association (ARTBA), 2012). Thus a large amount of public awareness through the use of advertisement and other public relation functions need to be conducted both pertaining to public and private infrastructural and financing authorities to help gain financial and constitutional support. Again the market opportunities pertaining to the construction of bridges reflect a growing market pertaining to the North American region. It is found that bridge construction operations in the region require the networking of business to business corporations and also government bodies to business houses. In the current scenario the development and construction of bridges in the North American region is found to trigger the gains of around $3 trillion on a per day average basis thereby hinting on mass growth opportunities. Owing to the above fact it can be stated that construction of new bridges would inevitably make the rise for the demand of Bridge Joints manufacturing and marketing activities in the region. Hence based on the Industry Life Cycle the situations relates to Growth (Bridge Construction Business Network, 2012). Market Segmentation and Distribution Channels Porter's Five Forces Analysis The Threat of Entry The market for bridge joint manufactures earns a distinct relation to the market characteristics of the bridge construction industry in United States. Entry barriers being low pertaining to the bridge construction industry in terms of economic and financial requirements contactors with the lowest bid tends to gain the right of constructing public properties like bridges and highways. Thus Ennis Prismo to gain an effective market for its bridge joint products needs to effectively price such that in turn would help in gaining the market acceptability from contracting bodies involved in public constructions (ConstructionWebLinks, Inc., 2007). The Power of Buyers The parties that would be involved in the procurement of such bridge joint products are contracting firms that focus on taking up construction of public infrastructures like bridges and roads. These contracting agencies are constituted by general and sub-contractors where the general contractor generally decides on the budget relating to procurement of construction materials and thereby endeavours to reduce the cost of construction. Thereby buying power related to the public construction industry in United States is quite high requiring the Bridge Joint manufacturing firms to significantly lower the price of its produces (ConstructionWebLinks, Inc., 2007). The Threat of Substitutes Bridge Construction industry based in United States tends to focus more on the process of reducing the cost of construction has in store effective substitutes to the bridge joints under question. The bridge construction companies in the region tend to use products related to galvanization and welding to help in making effective and strong joints. Thus Ennis Prismo would need to effectively highlight the benefits related to the use of its bridge joint products to counter the rising market for substitute products in United States (Krokeborg, 2001, p.25-26). The Power of Suppliers: Power of suppliers or contractors dealing with the supplies of materials related to the construction of bridges in United States tend to reflect lower power of bargaining. The supplier groups fail to increase the price of the products owing to the need of rendering low cost public infrastructural projects as underlined by the government of the region. Thus Ennis Prismo acting as a foreign supplier for bridge joint products also would tend to suffer from a low bargaining power (Atallah, 2006, p.5; ConstructionWebLinks, Inc., 2007). Competitive Rivalry: Contractors rendering materials for construction of infrastructural projects like bridges and others in United States are observing that demand is more akin to the prevalence of rented equipments and materials owing to lack of need for new developments in construction. Competition among contractors is on the rise pertaining to rendering of rented equipments owing to which procurement of developed and new products are at stake (Illia, 2012). Thus Ennis Prismo to gain an effective market for its bridge joint products needs to plan on the rental plans relating to such as would help in mutual gains. Customer Segmentation and Distribution Customer Segmentation The target market segments for Bridge Joint products in United States consist of government agencies related to the construction of highways and also public bodies related to the enhancement of transportation functions in the region. Moreover the market for the bridge joints would involve a business-to-business trading thereby involving the Ennis Prismo, the production firm based in United Kingdom relating to bridge joints to effectively tie up with contracting parties involved in the rendering of infrastructural elements helping in bridge construction (Marsh, 2000, p.18). Setting of Distribution Networks One of the significant factors governing the selection of distribution and supply chain mechanisms in the deciding of effective transportation systems behind the timely reaching of construction materials needed for bridge construction is cost. Thus use of roads and barges as a transportation system gains prevalence in addition to the use of railways as a transportation medium. Thus Ennis Prismo can consider using the above transportation facilities for effectively transporting the Bridge Joint products to the targeted segments. Again the company can also work based on wholesale and retail networks to help reach the products. Opening of retail outlets in the vicinity of construction sites also helps in assembling the products for its effective use (Shahawy, 2003, p.35-36). Details of the financial issues, practicalities and technicalities Financial Issues Ennis Prismo being focusing on the export of Bridge Joint products, a significantly related construction product pertaining to bridge construction can gain financial and credit support pertaining to its export operations from export financing authority based in United Kingdom. Firstly the company can rightly avail insurance relate to its rendering of needed credit to construction companies based in United States in availing the product. This insurance scheme would help Ennis Prismo in safeguarding its position in cases where the importing company based in United States declines from making the needed payment. Moreover secondly, Ennis Prismo can also avail insurance related to investment operations made in United States to develop its retail and distribution operations pertaining to market development functions of Bridge Joint products (UK Export Finance, 2010). Practicalities Issue Ennis Prismo works in the incorporation of needed innovation and expertise behind the designing of the bridge joint products. However a potent evaluation conducted of the bridge construction industry based in United States reflects that it focuses more on the parameter of cost-effectiveness than on innovation. Thus, Ennis Prismo to gain an effective market in the region would need to work on price tactics like penetration pricing. Moreover the infrastructure development bodies pertaining to United States is also found to focus more on repairing the existing bridges rather than focusing on the development of new ones. Herein, Ennis Prismo needs to work out advertising and public relation campaigns taking into hold the government and private highway construction bodies significantly reflecting the benefits involved pertaining to its use. These practical issues being addressed would help enhance the feasibility of Ennis Prismo’s exporting operations to United States. Technicalities Issues Bridge Construction activities based in United States reflect more on development of the conditions of existing bridges rather than focusing on construction of new bridges. Moreover bridge construction activities in the region are conducted based on traditional measures and processes pertaining to galvanization and welding rather than taking help of modern instruments and means (U.S. Department of Transportation,. 2001, p.26). Technological innovation being low on the cards related to bridge construction activities in United States calls for Ennis Prismo to maintain effective communication with construction contractors helping the latter understand the benefits involved. Moreover social networking applications through the use LinkedIn and Facebook would also help Ennis Prismo effectively relate the product manufactured to several contacting and construction firms. The above strategy would also help Ennis Prismo augment the level of public awareness related to safe and effective bridge construction. Conclusion Ennis Prismo based in Chorley in United Kingdom is an established brand related to the production of transportation and construction equipments related to public infrastructural projects. The company has an expanded operational and marketing base spread along countries pertaining to Middle East and other European nations. However at present the company focuses on gaining an effective market related to the Bridge Joint products manufactured by it in the region of United States. On this account the project undertakes to conduct a market feasibility study related to the highway construction industry based in United States focusing more on construction of bridges to effectively understand the feasibility of Ennis Prismo’s exporting functions. Analysis is conducted based on separate models pertaining to Environmental and Industry Analysis along with study on market and distribution segments and networks further reflect on the strategies needed to be undertaken by Ennis Prismo to effectively reach the final consumers. From the analysis conducted on the above count it is observed that construction activities related to new and innovative bridges in United States does not hold prime importance than catering for only development of old ones. Further the construction industry related to development of highway infrastructure in United States focus more on reducing cost than on gaining on in innovation. Finally talking hold of the findings the analysis also identifies the financial, technical and practical considerations needed by Ennis Prismo to be kept in mind to counter the emergence of different constraints in the United States market for Bridge Joints. References Atallah, P., 2006. Building a Successful Construction Company. United States of America: Kaplan Publishing. Bridge Construction Business Network, 2012. Opportunities [Online]. Available at: http://www.bridgeconstruction.biz/index.php?p=8. [Accessed 8 August, 2012]. ConstructionWebLinks, Inc., 2007. U.S. Construction, Architecture and Engineering Industry: An Overview for International Investors [Online]. Available at: http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/Feb_2_2004/us_investors.htm. [Accessed 8 August, 2012]. Copeland, C., Levine, L., and Mallett, W., 2011. The Role of Public Works Infrastructure in Economic Recovery. Congressional Research Service [Pdf]. Available at: http://www.fas.org/sgp/crs/misc/R42018.pdf. [Accessed 8 August, 2012]. Ennis Prismo, No date. Bridge Jointing & Crack Repair [Pdf]. Available at: http://www.ennisprismo.com/downloads/Ennis%20Prismo%20BRIDGE%20JOINTS%20and%20CRACK%20SEALANTS%20Brochure%202012%20NEF.pdf. [Accessed 8 August, 2012]. EPA, 2012. Roads, Highways and Bridges - NPS Categories. Available at: http://water.epa.gov/polwaste/nps/roadshwys.cfm. [Accessed 8 August, 2012]. Illia, T., 2012. Contractors Are Renting Rather Than Buying More Equipment During Slow Recovery [Online]. Available at: http://enr.construction.com/products/equipment/2012/0723-contractors-are-renting-rather-than-buying-more-equipment-during-the-slow-recovery.asp. [Accessed 8 August, 2012]. Krokeborg, J., 2001. Strait Crossings 2001. Netherlands: Taylor & Francis. Marsh, E., 2000. Composites in Infrastructure - Building New Markets. United Kingdom: Elsevier. Shahawy, M., 2003. Prefabricated Bridge Elements and Systems to Limit Traffic Disruption during Construction. Washington: Transportation Research Board. Shenoy, R., 2012. Court rulings on I-35W Bridge rattle builders. Minnesota Public Radio. Available at: http://minnesota.publicradio.org/display/web/2012/07/31/disaster/i35w-bridge-legal-ruling/. [Accessed 8 August, 2012]. The American Road & Transportation Builders Association (ARTBA), 2012. FAQs [Online]. Available at: http://www.artba.org/about/faqs-transportation-general-public/faqs/. [Accessed 8 August, 2012]. The American Road & Transportation Builders Association (ARTBA)-a, 2012. 4.4% Drop in 2011 Highway & Bridge Construction Market Expected, ARTBA Forecasts Finds [Online]. Available at: http://www.artba.org/article/44-drop-in-2011-highway--bridge-construction-market-expected-artba-forecasts-finds/. [Accessed 8 August, 2012]. U.S. Department of Transportation, 2001. Steel bridge fabrication technologies in Europe and Japan. Washington D.C.: DIANE Publishing. UK Export Finance, 2010. Introduction to UK Export Finance [Online]. Available at: http://www.ukexportfinance.gov.uk/about-us/introduction-to-ecgd/. [Accessed 8 August, 2012]. Read More