External Factors Responsible for Commercialization in the International Markets - Essay Example

? Market Commercialization Introduction Commercialization is a process which includes the introduction of a new product and production method into the market. One of the major elements would be product development and commercialization through techniques like taking advantage of the progress in technological factors and imagining opportunities from the application of technology. A Product is defined as a tangible commodity and intangible service which helps the company to deliver superior performance. (1) Implications of Launching a Product into the Market in terms of Commercialization The key elements in the development and commercialization of the new product would include market development and penetration agility, markets share momentum with a suitable competitive advantage and profitability, which measures the rate of return concept as well as the shareholder’s growth (Ardalan, 2009). The accomplishment of various objectives and goals of the organization will be done through excellent commercialization techniques (Environment.fi, 2012). Commercialization includes technological services like linking of technological delivery and endorsements (Harzing & Noorderhaven, 2000; Cai, 2000). In order to commercialize new product development the technology used must match with the specifications and requirements (Santamaria & Ni, 2008). Commercialization of a new product allows the company to create differentiated products with and against the customer’s choices along with various values dimensions (Narotama, n.d.). To gain maximum value from the products and product developments services commercialization helps in gaining high return on investment from product development and also attain a market position relative to its competitors (Shirani, 2009). External Factors Responsible for Commercialization in the International Markets Cost: The cost of the raw materials and labor is required for the manufacturing of a new product and whether these factors would turn out to be costly or cheap or huge determinants for the success of the new product development. Materials and technology: The availability of the raw materials and technology influence the product design. Customer Requirements: The customer tastes, preferences and requirements influence the product design. The changes in the product design are done accordingly to the customer wants and requirements. Culture: Culture plays an important role in the determination of the new product launch. The culture of a particular country plays an important role in determining the success of new product launch. Environment factors: While designing a new product, factors like whether the materials (Edgell, Ruf & Agarwal, n.d.) can be recycled or they are environment friendly or not are important determinants for new product development. Company Image and Identity: Perception of the brand image among the customers plays an important role in the new product development process and the product design. Competitors: The impact of the brand image of the competitors needs to be considered while executing a new product development process. Government rules and regulations: The government rules and regulations play an important role in the development and commercialization of new product. Internal Factors Responsible for Commercialization Changing Market Dynamics: The standardization of the product design would be affected by changing market dynamics and would be established which would lead to an increase in the organizational outcome. Dominant Product Design: Dominant design would be defined as establishing a standard which would be inherent to the overall industry standards. Network Externalities: Network externalities would be existent only in those products where the perceived customer utility is available and the success of the product depends upon the taste of the existing customers and the easy availability of the complementary products (Morrello, 2013). Commercialization Models: A commercialization model is prerequisite for the companies which serves useful and purposeful as a guide to the marketer and also helps in minimizing the redundancies in the organizational systems (Barrett, Donaldson, Kiwiets & Pearson, 2009). Technology Innovation: Technology based innovation and breakthrough would be achieved after it is combined with attractive market opportunity (New York Times, 2013; Lashley & Morrison, 2012; New York Times, 2013). The coordination of technology and the business process would require the linking of various markets, technical and financial departments (Queensland Government, 2013) However, the factor varies accordingly from different products and technology has different usages in the manufacturing of different products (NKU, 2013; CIM, n.d.). Innovation and commercialization are often synonymous and a factor which affects the commercialization includes organizational resources, dominant design market heterogeneity, network externalities and new product commercialization (Lamb, Hair & McDaniel, 2011). Commercialization will be a significant contributor for utilizing the assets of the organization effectively along with identifying the slack in the tangible and intangible resources of the organization. The evolution of a product development process would facilitate innovation capabilities in the organizational outcome and would also lead to a strong establishment in the market. This strategy allows the organization to determine ways of how the products will be successfully distributed and introduced in several market segments. (2) Relevance of Time to Marketing Concept with Commercialization Plan and value Creation The timing of the launch of product to its product development process would be directly and indirectly affected by the timing of the product development and the execution of the successful marketing strategies. Successful marketing launch is dependent on various other factors apart from timing of launch of the products and the execution of the activities (Stanford Business, 2013). However, the successful coordination of activities along with customer focus helps in development of profit orientation of activities (Taylor, Tower, Der Zahn & Neilson, 2008). The concept of ‘time to market’ in terms of commercialization can be defined as the length of time taken from a product being envisioned till it becomes finally available for sale. The notion of ‘time to market’ is more prevalent in the industries where the products are outdated at a rapid rate. For example, in the electronic gadgets or computer industry products are outmoded within short spans of time due to new developments taking place every day. In the similar fashion, the concept of ‘time to market’ is also referred to as a process about how quickly a company can introduce a new product or service in the market place. Hence, a company with shortest ‘time to market’ will be the potential gainers. Consumers nowadays have become extremely demanding and as a result of that need of consumers keeps on shifting. In such circumstances, minimizing the time for launching a new product in the market will certainly create value for the organization. It can also act as a competitive advantage for the company. Innovations: According to author Cornford innovation is regarded as the (Vanasco, 2000) continuous stream of commercially relevant activities which would be determined by the quality of linkages between the two. More specifically, in the pharmaceutical industry the timing of the commercialization capabilities are totally dependent on the research and development (Fletcher, 2013). This department focuses on the technical knowhow capabilities and transforming the process into relevant pharmaceutical product (Ungson & Wong, 2008). The timing of the manufacturing process of the pharmaceutical product is prerequisite for the research and development team of the pharmaceutical industry. Moreover, it is regarded as the process of performing the research and development process from the laboratory to the final stage of presenting the product. Product Variation: The timing of the product allows the management in making product variation strategy. Collaboration & Profit: The primary stage would be identification of customer needs and requirements. The timing of launch of the product would enable the management to develop strategies which facilitate lower cost of production. Low cost of production would enable increased sales and generate higher amount of revenue (SmallBiz Connect, 2013). Value Creation: Timely launch of products enable successful product development and develop products as per customers specification and requirements. Critical effect on profits and Resources: The profits earned by a company acts as a strong business driver. This is principally because of the fact that the business operation of a company and other related expenses are generally incurred with the help of total profit earned. Therefore, if a company succeeds to earn more profit after launching new products, it will be a positive sign for the company. A company which has the ability to launch new products at a quicker rate, the chances of gaining success increases exponentially. Moreover, a company which can launch products at a quicker interval the chances of satisfying the demands of customers increase to a great extent. As a result of that the impact on profit will be positive. The resources of the company also increase as a result of reduced ‘time to market’. In other words, the company is able to save its resources by pursuing ‘time to market’ strategy. This strategy allows companies to reduce several types of cost. For example, the extra equipment cost, the supplies cost, marketing cost etc. Intangible resources such as goodwill of the company also increase in the marketplace. Several companies figure out that ‘the shorter a project is the less is the cost’ and thus ‘time to market’ (TTM) is attempted by companies as a strategy to minimize the cost. However, at times pursuing TTM compels the company to strengthen its human resource and as a result additional cost needs to be incurred. Thus companies need to maintain a balance between the available resources and the profit margins. This can be achieved by carefully utilizing the resources for a project. A feasibility study of the project would greatly help in serving the purpose and it will allow the company to remain profitable as well as make effective utilization of its resources. Although, commercialization would require a broader view than being specific to a particular industry it is regarded, that the process would involve proper knowledge transfer at all stages of production (Gillespie, Jeannet &Hennessey, 2010). For example, the 3M Corporation has difficulty in defining the product and process which is more technologically specific and Thus, the time element helps in not only successfully transforming the product into a concept, which also involves the understanding of product design, process planning, supply chain, marketing, financial management etc. As per theorist Castro, it is understood that the product concept cannot be transformed into an organization concept that revolves around the product. For example, in the digital and technology based companies the human resource department would be totally dependent on the web integration system, which helps in laying emphasis on the parts like salary administration, employee benefits, health insurance etc. Apart from integration of activities the company information can be shared through a system which helps in multiplicity of sources and purposes which makes us aware of the company strategy. Real information exchange system helps in facilitating sales, manufacturing and operation process. Commercialization actually encompasses the invention inducement, disclosure, development commercialization and product development theory (Birnik & Bowman, 2007). As per the invention inducement theory, which is actually directly hinted towards patents and their useful invention it also encompasses strategies that lead to patent protection and helps in motivating the invention of the medicines (Jolly, 2000).This theory presumes that if there is an unavailability of patent protection or any other protection of goods then it would lead to social protection. However, the disclosure theory encourages innovation capabilities of products and services and help in yielding high rate of return. This theory not only invites innovation and development of goods and services and helps in smooth affiliation of marketing activities. This theory helps in non reliance of measures. The development and commercialization theory focuses on the timing of the launch of a new product and delivery of service (Rafinejad, 2007). As per the process development theory it was observed that the societal benefits of the products are not determined easily and the utility can be understood only after an invention or innovation is made (Thompson & Martin, 2005). Technological innovation and commercialization cannot be fully planned and the integration of activities cannot be pre planned or fully decided like the construction of a building or any other infrastructural activities (Dutton, Walton & Abrahamson, 2001). Specialization in the commercialization activities is clearly evident in the pharmaceutical industry and is also responsible for the growth in beverages, manufacturing and other industries (Thompson, 2009).The consequences of specialization and commercialization activities have helped in developing several exit and entry marketing modes which have enabled the fast and smooth technological innovation capabilities (Arnold, 2003). References Ardalan, K. (2009). Globalization and culture: Four paradigmatic views. International Journal of Social Economics, 36 (5), 513-534. Arnold, D. (2003). Strategies for entering and developing international markets. Retrieved from http://www.ftpress.com/articles/article.aspx?p=101588&seqNum=3 Barrett, J., Donaldson, W., Kiwiets, E., & Pearson, M. (2009). Marketing. Cape Town: Pearson South Africa. Birnik, A., & Bowman, C. (2007). 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