Individual Management of the Woolmark Company - Case Study Example

Menagement Individual Assignment International expansion proposes companies a great chance to improve their global presence and expend their business. For an Australian company, Spain represents a unique opportunity to enter the European market and gain large market share in this region. The Australian company selected for analysis is the Woolmark Company. The company was founded in 1936, and since that time it remains a leading textile brand in Australia. The company specializes in: “textile innovation, technical research and development that allows us to offer a range of benefits and opportunities to companies at all stages of the textile pipeline and beyond” (Woolmark Home Page 2008). Expansion to Spain will help the Woolmark position itself as a premium brand and increase its ales outside Australia. PESTEL Political Situation Today, Spain has a stable political situation marked by stability and democratic changes. Moderation characterizes the major political parties. A highly educated business elite, directing a developed economy, and with individual market power at their personal disposal, could only have supported a strengthened "free market" in political power to better pursue both political-social and economic ends on their own (Spain: the World Fact Book 2008). Business wants a political voice unencumbered by outdated bureaucratic restrictions and that reflected its achieved economic and market self-confidence. Spain is a parliamentary monarchy. The head of the state is King Juan Carlos I. Spain is divided into 17 autonomous communities and 2 autonomous cities (Spain: Country Profile. 2008). Legal Situation Recent years, there have been improvements in legal sphere marked by legal reformats and new laws adapted to the international legal principles. While corporate tax rates have remained relatively stable and tax credits were made available for job creation and investment, corporate taxes have increased significantly as a share of GDP since the early 1980s (after years of relative stability). Government plans to reduce subsidies for investment and job creation, including recent subsidies for employer contributions to social security for new hires, are likely to increase tax pressures on business. The highest marginal tax rate is comparatively high, as are the number of tax brackets (Spain: the World Fact Book 2008). Despite all of this, however, Spain is not a highly taxed country by European standards, although business people are more likely to compare their tax burden to their own earlier experiences than to the situation elsewhere. Many business people criticize state policies, but overall they would have to admit that the business climate has been very good. It is a monumental achievement for Spain that the prime focus of economic debate is on issues that are admittedly less interesting and not fundamental for the system, like the double taxation of corporate income or reorganization of pension benefits, and not on the monarchy, the constitution, or the legality of various political organizations (Bearden et al 2004). Socioeconomic Situation Spain is characterized by stable economic situation with 5% of the annual growth rates. Its GDP is $1.352 trillion (2007 est.). GSP per capita is $30,100 (2007 est.). From the EC perspective, the size of the Spanish economy placed its candidacy in a fundamentally different position from those of Greece and Portugal. Nevertheless, the relative brevity of Spains inclusion among the ranks of developed countries at the time of the democratic transition separated a large segment of the Spanish business sector, in sociological terms, from those in countries that industrialized earlier. Only the rise of democracy in both regions afforded these countries the political credentials necessary eventually to participate within the European Community, or at least, to cooperate much more closely with it (Spain: the World Fact Book 2008). The trajectory of Spanish efforts to join the EC and the final dénouement attest to this. The main industrial sectors are agriculture: 3.5%, industry: 29.8%, services: 66.6% (Spain: Country Profile. 2008). Unemployment rate is relatively low – 8,3% (Spain: the World Fact Book 2008). The physical size of Spain and its population is comparable to that of Poland. Spains level of industrial production and some measures of individual economic well-being were considered as somewhat similar to those of East Germany. Cultural/Demographic Situation The majority of the population are Roman Catholic 94%. Continuity emerges as closely intertwined with regional diversity, a result of the widely differing regional patterns of industrial development. With respect to issues relating to Francoism, the regions with the greatest degree of historical autonomist-nationalist demands, Catalonia and the Basque Country, were also fully industrialized prior to Francos assumption of power. Hence, in providing explanations of economic changes, business in these regions was less dependent on the economic policies of the previous regime. Thus, regional nationalist sentiments coincide with a lower psychological--or real-dependence on Franquist economic policies, a pattern not without political and sociological consequences among chief executives and association leaders (Spain: the World Fact Book 2008). Business people are by nature pragmatic. As the dénouement of the authoritarian regime neared and business experienced an increasingly evident exhaustion of the political system and the economic model it represented, it was natural that most of them, as individual citizens, would accept the development of democratic institutions. Indeed, most important segments of the business community welcomed the change. The activities of their incipient collective interest bodies reflected acceptance of the new political order and were structured to maximize membership interests under evolving circumstances (Spain: Country Profile. FCO 2008). SWOT Strengths The Woolmark Company’s image is based on its selling history and exceptional quality of its products. The mission of the company is: “to serve our shareholders by being a financially sustainable company that provides quality certification technology, product and services to the global wool industry” (The Woolmark Home Page 2008). It is possible to assume that cultural differences will not have a great impact on its operations in Spain. Weaknesses The main weakness is lack of international experience in Europe. In spite of the similar cultural traditions, the Woolmark will have to spend time and resources on cultural training and cross cultural management. Believing that people are a companys greatest resource and acting accordingly means, among other things, to keep in mind the implicit, but powerful, force of values shared by the members of the organization of a company (which in turn shape the behaviour of its individuals and groups) and to realize that managing people is not through (or at least not directly through) memos from budget meetings or computer reports, but through the subtle cues of a culture. All too often, the tools of management are seen and acted upon in technical rather than symbolic terms. Great firms tend to do an artful job of blending explicit procedures and formal controls with implicit social controls (Kotler, and Keller, 2005). Opportunity The main opportunity of the new market is the Spain does not have a developed wool and textile industry, so the Woolmark Company can contain a strong market position and create a strong brand image. Spains level of industrial output, its character of inter- versus intra-sectoral trade, product specialization, and labor force sectoral distribution, its available institutional mechanisms in the industrial field, and its historical evolution, placed the problems of the countrys industrial realities firmly among those of developed West European states, constituting the correct standards against which to compare Spain. These were also the standards against which Spanish policy makers and industrialists compared themselves (Kotler, and Keller, 2005). Threat The main weakness is different consumption patterns between Australia and Spain. Spanish consumers will have different needs and demands, so the Woolmark Company will have to adapt its products and prices to the new market. The total purpose of a marketing program will be to capitalize on existing and potential resources and translate them into profitable marketing ventures. To do so, business attempts to shape, change, and modify consumer behavior in order to bring it into line with corporate objectives and thereby gain competitive (Kotler, and Keller, 2005; Moss 1999). Recommendations In order to ensure successful market entry, the Woolmark Company should take into account customers demands and economic situation in Spain, industry forecasts and cultural differences. One-to-one marketers can differentiate customers, not just products, in order to ascertain and predict which customers are worth more than others and how to meet each ones individual needs. Historically and today, as mass marketers look at the market rather than the individual customer, they concentrate on getting a greater number of transactions during a particular time period or in a given geographic area. From the marketers perspective, these transactions are all independent of one another. Wool industry is underdeveloped in Spain, so the Woolmark Company will have a possibility to enter this market and create a strong brand image. The Woolmark Company should see a single customer not as a one-time transaction, but as a series of transactions over time (Robbins et al 2006). They think of the task of generating a greater share of the customers business as maximizing an individuals lifetime value to the firm. The true, current value of the customer is a function of the customers future purchases, across all the product lines, brands, and services offered by the firm. Mass marketing companies know how to manage products, and reward their successful product managers for selling more product and winning more market share. Bibliography Bearden, W. O., Ingram, Th. N., LaForge, L.W. Marketing, Prentice Hall, 2004. Kotler, Ph, Keller, K. Marketing Management. Prentice Hall, 2005. Moss, M. R. Mapping out Your Firms Success. Black Enterprise, 30 (March 2000), 104. Perreault, W.D., Cannon, J.P., McCarthy, E.J. Marketing: Principles and Perspectives. McGraw-Hill/Irwin; 4 edition, 2003. Robbins, S.P., Bergman, R. Stagg, I. & Coulter, M. Foundations of management, 2nd edition, Prentice Hall, NSW, 2006. Spain: the World Fact Book. 2008. Available from: https://www.cia.gov/library/publications/the-world-factbook/geos/sp.html Spain. Country Profile. FCO. 2008. Available from: http://www.fco.gov.uk/en/about-the-fco/country-profiles/europe/spain The Woolmark Company Home, Page. 2008. Available from: http://www.wool.com/about.php?id=3 Read More