Business Entry Strategy Issues - Case Study Example

International Business Consulting Project xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Business Entry Strategy Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Institution xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Evolute: Business Entry Strategy The lack of adequate water is a common problem in many countries with the most affected countries being the developing countries. According to a report released in 2006, at least 2.6 billion people cannot access basic sanitation and 1.1 billion lack an access to water despite the fact that this is a basic human need. Only 85% of the wealthiest persons in the society were found to have an access to piped water and this people only form 20% of the total population. The lack of adequate water has been attributed to by global warming and has been found to greatly influence the economy of a place. Since water short is a global problem, coming up with technologies that are environmental friendly and that would result to less water wastage will go along way in enhancing development (Aaker 2004). The development of the evolute is one of such technologies and is likely to receive support from all over the world especially by the environmentalists. Evolute Australian Mechanical engineering Company The water level is on the reduction and every technology that involves the reduction of water usage has a great contribution in the world today. Global warming has resulted in the change of season as well as reduced water table (Daniels & Radebaugh 2000). The toilets use a lot of water compared to any other facility in the house. To flash the modern toilet, at least 12 litres of water are required to flash the toilet after it has been used. Coming up with a means of ensuring a reduction in the use of water in flashing toilets while maintaining hygienic conditions is not only important but a need that should be met. Trainor and Hutton from Australia have developed a product which they claim that it only uses 10% of the water used to flash a regular toilet. The toilet is specially designed in that its opening that connects to the sewer line is sealed off by a metal sphere that keeps on rotating at the bottom of the toilets bowl. This sphere’s top is hollow to form a depression that is cup-shaped. When the toilet is used, the waste goes into the cup and the sphere rotates upside-down once the evolute is flushed. This ensures that the waste is released into the drainage pipe. Before the sphere rotates back to its position, it is rinsed by only one jet of water while the bowl is rinsed on the sides by another jet. Some water is retained inside the cup before it’s used. This technology does not only save on the water usage but also electricity since it used the water mains’ hydraulic pressure. The toilet does not also require cistern or an S-bend since the sphere seals off the sewer gases. While 6-12 litres of water are required for a convectional toilet, this kind of a toilet only uses one litre of water to flash the toilet. The toilet also requires only 70% of the total space taken up by a normal toilet hence resulting to a reduction in the amount of space used. Entry strategy The mission statement To develop and introduce technologies which are inline with the millennium development goals by maximising on the benefits while maintaining a low production cost. Vision statement To ensure sustainable product supply and continuously raise the profit margin by building customer confidence and maintaining competitive advantage. Values · All -- engineering company branch involved in the sale of EVOLUTE must maintain the highest standards while relating with the community, suppliers, customers and the surrounding environment. · The company establishes an environment that enhances employee development through offering rewards and training opportunities. · The company is responsive to customer need and seeks to build customer confidence. Objectives · To secure a high market share in the already existing market · To attract and maintain customer through timely delivery of products and services. · To become the leading sales company in the existing market · To expand the business and the amount of money shared to the shareholders to above average. Overall strategy The supply and purchasing chain is the main key in the companies operation. If the supplies are cut off at any one time, the delivery of the finished products will be delayed and such inconveniencies are likely to affect the customers and may even result to the loss of customer confidence. This chain involves 3 main elements which include the distribution strategy, operation strategy and chain supply (Griffin and Pustay 2005). The company will supply its products globally with the main target been the European countries due to favourable trading policies. To ensure a low operation as well a production cost, the company will purchase raw materials directly from the producers hence elimination the extra cost involved when trading via middle men. Since the aim is to maximise on the profit while reducing the cost of production, ensuring a wide and continuous distribution of the product is of great importance (Grant 2005). Positioning The main business centre will be located in Netherlands, fiji and Australia. This is due to the fact that in Netherlands, getting highly qualified work force is easier and the country acts as the base for sales to any European Union market. Having it as the central position from which the goods are distributed would hence ensure that the goods are well distributed in these countries (Dahringer, Mühlbacher 1991). In addition, the country is politically, socially and economically stable. In this country, selling goods to existing construction and engineering companies will speed up the entry of the new product into the market. At the same time, it will reduce the cost of advertisement since the companies already have an existing customer base. Customer confidence is important in any business operation and this can only be achieved through delivery of quality products without delay (Bradley 2004). Operating from this country will reduce transportation cost as well as the time required to deliver goods from the production site to the clients In Australia, the business can be best established through franchise in which the products will be sold though the existing companies and using their brand name. If the product is accepted locally, the possibility of having it accepted internationally also increases. In Fiji, there are favourable operation costs for the business as well as supportive trading climate. This also provides a good starting point since the product is made in such a way that it can be sold in any country including the markets in Asia-Pacific. In addition, the Australian financial basis is well established in this area. Brand To ensure a quick entry into the market, the brand will be of quality and will be sold using brand names from existing prominent and well established companies. This will be maintained through the production of quality goods, continuous training for the employees and the development of excellent customer care services. Target segments The target customers are mainly the constructors. This will include those working in real estate development since these are the main people in need. The target will include every person in the construction, building and designing sector. Training this individuals and empowering them with information will be of great advantage to the company since they will also act as advertisers (Thompson & Strickland III 2003). There is an increasing need for housing facilities and these people are well aware of where new buildings are being put up or where there is renovation of existing buildings. Strategic direction The need for toilets is not likely to be met any soon due to the large number of people without an access to a toilet or a sanitary facility. According to a report release by the United Nations from a survey carried out globally, there exists an area where there are no toilets at all or the existing is shared between both sexes. For instance, Karnataka was found to have at least about 50% of the schools in the area have no toilets. Many of the existing facilities have also been rendered unusable. In addition, the rising need for housing facilities means that more toilets will be required even in the future (Lambin 2000). Pricing The pricing of the evolute will be based on the total cost of production which includes the cost of purchasing the raw materials used, transportation cost, cost incurred in advertisement (Porter 2004). This total cost will be calculated and the cost of the evolute determined. The cost of evolute will be less than the current cost of existing toilets since production will be massive. The fact that this product supports the accomplishment of the millennium development goal will result to it being accepted without offering very low prices for the product. Raw materials will also be purchased in bulks hence reducing the cost of production even more. Communications Communication forms a basic part in business operations. As a result, communication will be prioritised and some finances will be allocated for this purpose. This will involve communication between the employees, employees and the management and all workers with the customers. Effective communication will be established through a clear determination of the chain of command. Sales and distribution The product will be distributed from a central manufacturing place. The customers will be offered transportation for purchased goods and discounts for those that purchase the goods in bulk. If this happens, the customers are likely to be retained in the company (Hill 2005). High quality customer care services will be maintained through out the operations. Lowering the quality of goods will affect the market for the good since it may lower customer confidence as well as customer loyalty. It is as a result of this that the company will establish every legal means including patenting of the new product to prevent the possibility of the development of counterfeit products. Area of operation The company should setup its operations both within the country and oversees with the main countries of operation being United States of America, United Kingdom, New Zealand, Hong Kong, Canada and Singapore. These places are the locations for main Australian firms and have proved to be effective and excellent markets for goods and services produced in Australia (Jeannet & Hennessey 1988). For instance, the direct investment made abroad by Australian firms in 2002 was $153.3 billion which represented an increase to of four-fold in ten years. Since this is a new product in the market, strategising the market in these areas would be of great advantage to the company as the country’s products have already gained acceptance unlike when introducing the product to a country where Australian firms have not flourished. SWOT ANALYSIS Strengths weaknesses Improved customer service The product is unique Low cost of operation Quick delivery of products and services Accessibility of media services Political support Supportive government policies High cost of labour Prospective customers lack awareness Dependency is borrowed cash to maintain a high supply Need for spacious ground from which products will be distributed Threats opportunities Political instability Inflation Major players in the construction industry may decide to come with a similar product Availability of labour Accessibility to mare customers Establishment of a global brand Expanding the market EU markets’ base for sales Support from government- the company will receive support from the government which will include incentives and subsidies (Kotler & Keller 2006). This will result to reduced cost of operation hence maximization of the profit acquired. The taxation climate also supports the establishment of the company in the area. Business entry mode The best entry mode into the market is through the global supply chains. This kind of supply chains is effective due to the increased use of Information technology and the ease in reaching customers globally. Marketing is also cheap since any advert can reach a large number of people through the use of websites such as facebook, twillie, tagged, among others which are accessed daily by many people. This method will allow the company to easily enter the global market because of its cost effectiveness and efficiency in service and product delivery. In this mode, procurement is done online through a global supply chain operator. Singapore and other regional procurement centres for the engineering company advertise the product to other projects outside the region. It is import to work hand in hand with the construction engineers since they are the main users of the product and are in a better position to advertise the product. This is attributed to by the fact that they are in direct contact with those individuals putting up new buildings and are mainly consulted by the customers to offer a customer the best choice on materials to be used as well as the design to be applied. In addition, the designers should be involved so that they would promote the use of this design of toilets for upcoming building and existing buildings being renovated. Despite the pre-qualification of the company to using global supply chains, promotion and marketing are a major determinant of the success in selling the new products. This requires a wide coverage of advertisement through global means such as the website and televisions. Promotions would include lowering costs especially for those that require the product in large quantities, giving discounts and free samples to prospective customers. The product being introduced is very unique and supports the millennium development goals. Since water and space has become a rare commodity in the world, this product is likely to be easily accepted by the majority. The basic starting point is introducing the product to Australia first and promoting its acceptance by the community. This is to ensure a strong client base in the country of origin and the operation cost in the home country is cheaper. In addition, there are fewer barriers to success in the domestic country than they are in the global market. Bibliography Aaker, D, 2004, Strategic Market Management, 7th ed, NY, John Wiley & Sons. Bradley, F, 2004, International Marketing Strategy, 5th ed, Upper Saddle River, NJ, Financial Times/Prentice Hall. Dahringer, D, Mühlbacher, H, 1991, International Markting, A Global Perspective, Reading, MA, Addison-Wesley Publishing Company. Daniels, D, & Radebaugh, H, 2000, International Business, Environments and Operations, 9th ed, Upper Saddle River, NJ, Prentice Hall. Grant, RM, 2005, Contemporary Strategy Analysis, 5th ed, Malden, MA, Blackwell. Griffin, W, & Pustay, W, 2005, International Business, A Managerial Perspective, 4th ed, Upper Saddle River, NJ, Prentice Hall. Hill, L, 2005, International Business, Competing in the global marketplace, 5th ed, NY, McGraw-Hill/Irwin. Jeannet, P, & Hennessey, D, 1988, International Marketing Management, Strategies and Cases, Boston, Houghton Mifflin Company. Kotler, P, & Keller, L, 2006, Marketing Management, 12th ed, Upper Saddle River, NJ, Prentice Hall. Lambin, J, 2000, Market-Driven Management, Strategic and Operational Marketing, London, Palgrave Macmillan. Porter, E, 2004, Competitive Strategy, Techniques for Analyzing Industries and Competitors, New York, NY, The Free Press. Thompson A, & Strickland III, A, 2003, Strategic Management, Concepts and Cases, 13th ed, NY, McGraw-Hill/Irwin. Appendix The Evolute Read More