International Market Analysis - Report Example

Companies that have a good level of growth eventually need to expand their operations to the global market to be able to achieve further growth. Physical Movement Company is an enterprise in the home care industry which concentrates in the sales of wheelchairs, walkers and other types of mobility products. They currently have sales of $25 million annually and are seeking further growth by exporting their products into the international market. Their initial strategy is to target three countries to introduce their products to begin their global expansion. The purpose of this report is to analyze the trends in the mobility market and find possible destinations for expansions taking into consideration factors such as the demographic, economic, cultural, social, behavioral, legal, political, and technological behaviors of the markets. A good strategy to utilize to determine the appropriate international markets to launch the company’s products is to research the industry and find an emerging trend or niche which may ease access and accelerate the expansion process. Mobility products are categorized as durable medical equipment. They serve the purpose of facilitating the movement of a person with a medical condition. These characteristics make their products a necessity for people with such a condition thus their products could be categorized as items which cultural or ethnic factors are not a barrier of entry. Products with conservative esthetic designs minimize any risks of cultural misunderstandings. The company has to realize that despite their products being a medical necessity for people with certain conditions they are not cheap since the price range of a basic wheelchair is between $200-500 (Shopping, 2007). Entering a country with low levels of income per capita is prohibited. The demographics and characteristics of the population of country are important data which must be considered by this company. The elderly are a population which face mobility problems as their bodies begin to break down due to old age. A good indicator to look for in a population is the life expectancy of the citizens of a country. Another common reason a person might face mobility issues is obesity. People with excess weight face many problems moving their bodies especially in obesity cases of 250 pounds or above. Another important factor which Physical Movement Company must analyze is the healthcare system of a country. A strong healthcare system can bring a lot of sales since the medical insurance can cover some or all of the cost of acquiring the equipment for the people in need of them. Specific industry data can provide the company with great insight on how to approach their expansion plan. In the United States there are approximately 2.2 million people utilizing manual or electric powered wheelchairs, but the worldwide demands is of approximately 100-130 million people of which one 10% are currently using or have access to such a device (Cooper & Cooper). There is plenty of room for companies to tap into the unattended mobility international consumer market. The main factor that is creating the need or demand for mobility products are injuries due to combat from warfare, with the greatest danger being landmines. Over 26,000 people are injured or killed by landmines over year (Cooper & Cooper). The landmines explosion result in direct injuries to the legs, thus leaving the victims in need of mobility products. A very interesting trend within this market is illustrated in Exhibit A. The exhibit shows the different medical conditions which cause the need for medical products. The information clearly indicates that obesity problems are creating the largest demand for these products due to medical conditions. Mobility products targeted for the obese people are categorized as bariatric. A good strategy the company can utilize to advertise its international launch of its products into the market is social responsibility. The company many not target some of the poor countries to officially launch its products, but this does not mean they could not be a part of the global marketing equation. Altruism is a respected corporate trait which is valued by the customers. The company could donate a large amount of wheelchairs, for example 1,000, to a poor country at war such as the African nation of Ethiopia. Such a donation would raise awareness about the problem of landmines during warfare and will help the victims of the conflict which many times are civilians not involved in the actual battles between troops. In a press conference the company can announce its donation and its international launch into the selected markets. The company selection of the three markets is based on three key factors which made these markets very attractive. The three countries selected were Switzerland, United Kingdom, and Japan. Switzerland was chosen due to the strength of its healthcare system. The selection of the United Kingdom was based on its high levels obesity among the population. Japan was selected taking into consideration the high level of age expectancy of a large population. Switzerland is a country with a population of 7,489,370 people with a GNP per capita level of $30,430 and life expectancy within the population of over 80 years of age (CultureGrams, 2007). The country is politically stable and it is pretty technological advanced evidence by the fact that 50% of its population is online (Nielsen, 2001). The income level and life expectancy are good metrics for the sale of mobility products, but the main reason this market was chosen is its strong healthcare system. Switzerland spends annually over $10 billion on social welfare which has allowed the country to build one of the top healthcare systems in the world (Strategis, 2006). The Swiss government believes in taking care of the health of its people which is probably why its life expectancy levels are so high. In 2002 in this healthcare market over 232,000 disabled people were eligible for disability benefits, among these group 57,000 of them use the government sponsored benefits to acquire auxiliary aids such as wheelchairs (Strategis, 2006). The United Kingdom has one of the strongest economies in the world and is a member of the prestigious international organization Group of Eight (G8) whose members represent the strongest eight industrialized nations in the world. The UK has a population of 60,363, 302 and per capita income of $32,210 during 2005 (CountryWatch, 2007). In this country obesity is a serious health problem. The country has the 3rd highest level of obesity worldwide with a 61% rate within the population (Loureiro, 2006). The strong ties the British have with the American government and the high level of acceptance of American products by the citizens of this country make this marketplace a perfect place to launch US produced merchandise. Bariatric mobility products are the perfect product to launch in this market. In the United States a country with the world’s largest obesity problem the bariatric products are the fastest growing category within the mobility products market. Japan has a population of 127,417,244 people, a real GDP per capita of $27,967 and life expectancy of approximately 81.5 years which ranks 2nd in the world (CultureGrams, 2007). A country with such high life expectancy is a great market for mobility products for a variety of reasons. “The changes of acquiring a disability increase with age and most people 75 or older have some sort of disabling condition”(Cooper & Cooper). The geographical distance between Japan and the United States is very large, a variable which can increase the price of the company’s mobility products due to higher shipping expenses. The people of Japan have a very traditional culture in which loyalty, professionalism and devotion to their people are highly valued. American products would not be instantly accepted as in the British market, but considering the medical advantage of Physical Movement Company products it should not be a constraint that forbids entrance into this market. Launching products into the international market require a careful study of the cultural, demographic, political, economical, technological, legal and demographic conditions of a country. Globalization is a reality in the business environment of the 21st century. Physical Movement Company needed to expand its horizons into other markets and decided to target Switzerland, Japan and the United Kingdom as its target markets to introduce its mobility products. Introducing the products is the first step towards becoming global. The company must closely monitor the sales progress in these regions and patience is required to achieve the long term goals of the company. Going global is a bold move, but a necessary one in other for corporations to achieve greater growth. References Cooper, R. , Cooper, R.A. Trends and Issues in Wheels Mobility Technologies. Retrieved July 15, 2007 from http://www.ap.buffalo.edu/idea/Space%20Workshop/Papers/WEB%20-%20Trends_Iss_WC%20(Cooper).htm CountryWatch (2007). United Kingdom. Retrieved July 15, 2007 from CountryWatch database. CultureGrams (2007). Japan. Retrieved July 16, 2007 from CultureGrams database. CultureGrams (2007). Switzerland. Retrieved July 15, 2007 from CultureGrams database. Loureiro, M.L. (2006). Obesity: Economic Dimensions of a ‘Super Size’ Problem. Retrieved July 15, 2007 from http://www.choicesmagazine.org/2004-3/obesity/2004-3-02.htm Nielsen.com (2001). Nielsen/NetRatings is launched in Switzerland. Retrieved July 15, 2007 from http://www.nielsen-netratings.com/pr/pr_010625.pdf Shopping.com (2007). Wheelchair. Retreived July 15, 2007 from http://www99.shopping.com/xCC-Wheelchair--price_range_270_670 Strategis (2006). International Market Research Reports. Retrieved July 15, 2007 from http://strategis.ic.gc.ca/epic/site/imr-ri.nsf/en/gr118722e.html Exhibit A: United States manual wheelchair usage trend Depot Lightweight Ultra-lightweight Bariatric Standing Specialized Current Number 600,000 400,000 200,000 50,000 5,000 100,000 Trend Level Slow Growth Moderate Growth Rapid Growth Slow Growth Moderate Growth (Cooper & Cooper) Read More