Airsec Company - Aims, Pricing Strategy, Benchmarking, Barriers to International Trade - Example

Task 1

Aims and objectives

A security company was started by three researchers who were specialized in the engineering field. To guarantee the safety of the business they clinched to high technological advances by integration unmanned aerial vehicles which are also known as miniature drones with progressed technology application. The cameras installed in the company offices were able to capture images during the nighttime as well during the day. They also worked to ensure they provide real time WI-FI to improve linkages to a large group of receivers like cellular phones. The company aims at ensuring that they become the leading plant in delivering quality services in the whole security industry of the United Kingdom market by 2017. The company further seeks to enhance the market tactics used to ensure an increment in the sales revenue over a stated period which is preferably five years from the bottom year of 2015. The increment rotates around a ten percent with a balance downfall of the operationalized costs by 5 percent. The company aims at ensuring that within five years an increase regarding profit margins by an average value of 3% annually will be realized. Immediately after the realization of the profit, the company works towards ensuring maximization of the innovations that concentrate on the correct training of human resource so as to ensure they compete favorably in the market and serve in various positions in the company.

The company focuses on increasing the staff training budget by 10% per year, and the primary intention is to impose the best functional strategies on the workers through the use of the most leading technologies that help enhance the security sector. The company targets to reduce other expenditures that are operational so as to suit the required budget for the training.

To be a position to introduce a curative measure that ensure efficiency and that are environmental user-friendly. They put much emphasis on recycling of the waste products that have been used so as to reduce environmental effects such as reducing instances of the pest infections by 2018.

To take part in corporate social responsibility the company focuses on community commitments especially the local society. They intend to increase the corporate social responsibility budget sensibly by 2% annually for five years (Gersher, 2014).

Mission statement

Our mission is to emerge as the market principal in quality service delivery in the security industry by focusing on advanced technology in our operations in the United Kingdom. Moreover, we intend to enhance our market tactics to ensure increased sales revenues over a given period. It is also our duty to initiate a positive relationship with both suppliers and market, especially in the UK and India. We also intend to lead advanced human resources to meet the market demand through training of our employees to create global competitiveness in the area of expertise.

Task 2

The pricing strategy

Each price strategy that is used has both merits and demerit however much considerable a company can be. It is, therefore, important that the company explores the different pricing techniques such as price penetration, predatory pricing, market skimming and market pricing among other methods of approach. All the same, the pricing strategies do play a considerable role in determining the market structure. The pricing, therefore, decides on the number of customers served by the AirSec Company. The penetration pricing strategy is advantageous since it comes with low price for the goods and services thus allowing marketing access that increases the market shares. However, such a program is beneficial in that it does not reimburse the incurred costs such those of research and development as well as revenue loss due to the possible low selling prices for the AirSec company commodities. It is also disadvantageous since the technique may be inefficient when concentrating on short life cycle products. The pricing strategy of the company is much influenced by the customer orientation (Smith, 2011).

The predatory pricing strategy has various advantages in that it has the aspect of natural elimination of the competitors through lowering the price of the products. The customers purchasing habits can be changed through the approach since they will consider the goods produced by the competitor company. The disadvantages of the approach are that there is no method to be used to maintain the customers since their behavior is based on the price (Meehan, Simonetto, Montan, & Goodin, 2011).

The other pricing strategy is marketing pricing, and the plan encourages similar pricing about the rival firms. The demerits of the approach include small profits that result from the increased production costs. The market skimming strategy tends to initiate high prices since the clients are more willing to buy the products. The launching process is also accompanied the critical promotional crusade to put emphasis on the product and make it known to the people. The strategy, therefore, renews the customers taste and preferences for the old products. The method also facilitates the sales volumes especially for a product that is old fashioned. The strategy is limited regarding the risks associated with weak sales due to the possible indented images of the right kind.

In contrary, the fifth pricing policy is the discrimination pricing. The policy applies imperfect market situation, whereby the clients charged different prices for different market coverage and at a different time of the day. The pressing limitation is the small revenues resulting from the low purchasing powers by the clients. Pricing is an incredibly complex undertaking to be done correctly; hence, it calls for a collection of skilled practitioners to analyze the organization through a unique lens (Meehan et al., 2011).

Price war becomes the sixth and last pricing policy that the company adopts. This is an “economic dance” where the company earns a competitive advantage by unremittingly reducing the prices so as to outperform its competitors. The challenge with this strategy is that the resulting limited flow of information, increased costs of production and distribution might eventually lead to closure of the business. Customer preferences have the potential to significantly influence the decisions of the sales and marketing executives. (Smith, 2011)

In place of the above, in order to perform in the U.K. market, the organization should concentrate on the market pricing strategy. This is where the firm ensures that maximum profits are accumulated from those areas that are dominated by the company. These profits are ensured because the firm, in these areas, understands the market dynamics and can sustain its business operations. Alongside this approach can come the market mix, which helps the firm balance its usage of revenue and its prime target of achieving market supremacy. Thus, yet, a firm should never depend on any clear views that are internal or external in trying to meet its pricing objectives (Meehan et al., 2011).

Moreover, penetration pricing has to be part of any successful strategy India, since it is a new market. The approach will aim at attracting new customers in the region, who will be willing to try the new products. The company can thus recruit experts in the industry to help sustain a peaceful coexistence with competitors. Given the sensitivity of customers to prices, this method proves very suitable.

Table 1. Strategies for micro-marketing pricing

Source: Montgomery (1997).

Task 3

Benchmarking

Benchmarking entails identification of standards that employees ought to meet in ensuring delivery of high-quality services that distinguish a firm from the rest. In the case of AirSec, there are various approaches are used. They ensure that the management can use to shop floor assembly workers give their best at the firm. Among them is assigning a group of employees targets to meet within a specified period. The management is then obliged to continually monitor the groups to see if they comply with the standards so set. These standards must be in accordance with the company’s business objectives, such as the demanded quality of service provision. Carrying out this method will require the managers to stress the call for cooperation from all the employees in each group. The aim, overall, is to achieve an 80% compliance with the set targets. (Lynch, Haltiwanger, & Mackie, 2007)

Also the company applies a method where the employees’ expectations on the use and coordination of company resources by each employee are evaluated. The customer expectations is the considered vis-à-vis the budgetary allocation, together with the employee expectation evaluation to come up with a conclusion about the best approach. In all this, managers are obliged to ceaselessly encourage proper utilization of company resources by all, and make everyone aware of the demerits that come with misuse of company resources. Regarding the floor staff, the managers are humbly obliged to design appropriate codes of operation and fair remuneration plans so as to ensure they earnestly commit to their duties. Benchmarking, thus, encourages programs that ensure the company, as much as possible, limits the misuse of resources. Finally, compliant floor workers’ needs are then addressed by the criterion developed by the managers. Additionally, this criterion should also consist of ways to encourage healthy competition among the employees (Lynch et al., 2007)

The results obtained are used in the grading system of the employees and the benchmark arising from the comparison of both the external and internal expectation that determines the primary goal of the organization of profit measurement. Another importance of the reference is the determination of the cleaning standards by the management. Finally, it measures the levels of coordination of the floor staff members and meeting the set goals by the firm. Lastly, it helps in the selection process of competent employees to conduct the cleaning activities in the organization. The company can reduce many challenges faced by the most Companies, thereby increasing the chances of making more profits (Lynch et al., 2007).

Table 2. The matrix of different forms of benchmarking

Source: Kyrö (2003).

Barriers to International Trade

To any business, exportation comes along a few complexities and accordingly, AirSec is no special case in conveying items in India. Among the possible difficulties that AirSec will experience in its exercises is confronting the trouble in comprehension the practices of customers in the area, whose values and likings varies from that of customers in the UK. Business entities are started having a basic objective of being the leader in the trade which thereafter results in increased overall revenues overall revenues. Single firms operating adopt well thought out strategies to handle competition in the procurement of products and administrations to balance the impact of rivalry realized by their competitors. Numerous matters emerge because of association in the global exchange with people from India. One of the disadvantages prone to happen is to comprehend the customer behavior in the area. The customer behavior in Indian culture differs from those of customers in the UK, which prompts concentration on procedures and conduction of statistical surveying that will guarantee that Airsec meets the objective of dominating the market. The second hurdle rotates around the valuing strategy of pricing that may not work really in this region that confines the behavior of exchange for some due to several reasons. This is better exemplified by the export that may record meager turnover because of enormous levies charged on the administration of conveyance.

There exists a third hurdle which is the sector entrance as the administration injects more attention on local businesses as compared to foreign businesses. Then again, the business sector changes may bring about hindrances in getting to consumers in the region, which influences the degree of business sector scope. Customers in the UK, tend to be concerned about touchy to changes in pricing more than in India. Intersec ought to concentrate more on the fair cost of conveying durable products while as yet attempting to act in concurrence with the laws of the region. Correspondingly, the requesting the constitution of India to be in line with the bylaws of the area that supports the development of young commercial enterprises in the area has a tendency to reduce the rate of business sector spread. Furthermore, the significant process of coordination which includes item conveyance to the clients, for example, the conveying of consumer items may not be done in time, in this way diminishing the net revenues. There is a fourth issue which is the poor reach of a few areas which may repress the conveyance of products at the perfect time. The constricting processes started by the government of India may lessen the adequacy of the stream of products from outside India to the nation.

Similarly, the firm will probably experience the ill effects of eccentric severe climate situation and the workforce might not be in possession of sufficient understanding about the business sector variances. Henceforth, the productivity in administration conveyance may confront a huge test, and the shoppers may have less trust in the business operations. Again, the provision of service in another country's market is the conceivable obtaining of the sector share through cartels. The urge to get technical know-how Indian workforce can bring about a lessening in business exercises by the firm and even acquire misfortunes because of degenerate arrangements to obtain land and profitable resources. In conclusion, the Company may confront a test of misfortunes that brings down the revenues of the company through the restricted awareness about the business sector prerequisites. The business likewise may discover asset obtaining and complying with the government levies much costly; in this way, obtaining the biggest share in the market being another option to delivering of services (Levine, Locke, Searls, and Weinberger, 2000).

Table 3. International Trade Social Network and Business

Source: Rauch (2001).

Task5

Functional Areas

The conceivable danger to such situation is the supplier losing clients, as customers tend to not trust the usefulness of the gadgets. The business may likewise confront difficulties such as the likelihood of legal hurdles due to actions of such kind. Another issue is that of escalation of the production costs resulting from embracing the new technology in the operations of the business. The third repercussion is the incurred expenses from the compensation of the damaged items (Zuniga & Dini, 2013).

Other dire consequences of dangers because of harms of the components involve altogether the extended time and short duration impacts. The short duration impacts incorporate the decrease in the net revenues while the extended time impacts focuses on the inconvenience of maintainability issue due to the indented image of the business (Zuniga and Dini, 2013).

The business settled on a nonsensical choice of taking part in contributing an extra expense amounting to 1550 pounds to create UAV. Henceforth, the organization ought to engage in advertising activities in inspiring civic relations. Moreover, the company requires to force pay system for its workers so as to deal with impromptu costs. The organization will likewise need to change the pay structure for the staff to provide food for the spontaneous costs that debilitate its continued existence. The organization will undertake extensive research in its effort to identify the reason for the issue. Thereafter, the organization is expected to make an apology to the general population for the burden (Gersher, 2014)