Global Marketing Research: Bateman Company - Report Example

GLOBAL MARKETING RESEARCH: BATEMAN COMPANY By: Table of Contents Introduction 3 Pestle Analysis for Turkey 4 Political analysis 4 Economic Analysis 5 Social Analysis 5 Technological Analysis 6 Legal Analysis 6 Environmental Analysis 7 Pestle Analysis for Czech Republic 7 Political Analysis 7 Economic Analysis 8 Social Analysis 8 Technological Analysis 9 Environmental analysis 9 Swot Analysis 10 Turkey 10 Czech Republic 11 Further Analysis of Czech Republic and Turkey Markets 12 Trade barriers 12 Government Regulations 13 Taxes 13 Taxes and Import Duties while Importing into Czech Republic 13 Taxes and Imports Duty while importing to Turkey 13 Demographics 13 Czech Republic 13 Turkey 14 Market Entry Methods and Expiation 14 Introduction Batemans is a Lincolnshire based company. The ownership of this company is under George Bateman and Sons. The establishment of the company was in the year 1874. As at the moment, the company possesses sixty-nine public houses in different parts of the country. Batemans breweries play a significant role in contributing to the creation of employment opportunity in all its branches. For illustration, it both involves the use of skilled and unskilled labour force. Consequently, it positively contributes towards improving the standards of living. With the intention of marketing their products, the brewery has incorporated itself in the social media platforms. Furthermore, the social media also act as a point whereby the companies could attend to their clients. A notable example of this site is Facebook (About Batemans, 2014). Repeatedly the company has always rebranded its products. It is done with the aim of satisfying consumer demands with improved brands. The company has launched numerous brands, some of which include, Bohemian Brew and Biscuit Barrel Brew. Bohemian brew contains a number of flavoured brands. They include orange barley, mocha amaretto, and hazelnut brownie. Other rebranding changes consist of the Salem Porter brand. Its fermentation is done by the use of chocolate and comes along with an additional packet of black paper just in case a consumer will like to increase its quantity in the beer. Furthermore, the company has improved the duration necessary for fermentation of the beer to enhance the flavour (Thompson, 2014). Because of the improved quality of Batemans products, there is increased levels of consumption. It is among many more factors that have increased the desire for the company to expand the supply of their products to markets that possess a high potential for the thriving of the business. A notable example of the regions consists of Turkey and Czech Republic. However, there is always a need for pestle analysis of the potential markets. Through it, Batemans Company will be able to realize the existence of the necessary conditions to allow for a successful growth of the business. In this case, pestle analysis will be performed in Czech and Turkey. The main aim is to establish the viability of Bateman’s products in the two regions by evaluating their macro-environmental aspects. Pestle Analysis for Turkey Political analysis Turkey is an associate of numerous global organizations for instance, NATO, and the EU. As a result, this has considerably strengthened its global position for a long time. However, presently, the countries worldwide reputation and regional authority has declined significantly. It is because of the turmoil in the Middle East that has strained ties with nations such as Iraq, Syria, and Egypt. Furthermore, the Erdorgan Management absolutions alongside an important corruption issue have significantly led to possible uncertainty in the country because the government does not find it easy to tackle. In addition, the lack of agreement regarding political matters has greatly hindered constitutional reforms. A notable example is the failure in an effort meant to transform Turkey from being under the military rule to a civil rule. Even though amendments take place, it always happens on the constitution whose creation was under the military regulation. In addition, the government also faces the problem of slowed down peace talks with the PKK rebels, which is likely to result to the withdrawing of forces. Consequently, this poses a significant risk to Turkey’s peace (Turkey: In-depth PESTLE Insight, 2013). Economic Analysis Turkish economy is distinguished by having a steady banking segment and sound public finance. Elevated capital sufficiency ratios and outstanding asset quality of the banking segment have significantly influenced tremendous credit growth. On the other hand, constant primary surplus and an elevated position of fixed interest, lira-denominated liabilities have staved off constant volatility related to sovereign yields. Consequently, this has enabled the Turkish government in maintaining a debt profile that is sustainable in nature. Nevertheless, a perennially elevated current account deficit might be a major starting point of vulnerability in the event of a change of investors’ risk hunger. The economy depends on temporary external debts and volatile temporary flow. In addition, the Government of Turkey is going into Free Trade Agreements with a set of large companies. The major purpose of the agreement is to minimize barriers to trade by agreeing on factors that will improve trade (Turkey: In-depth PESTLE Insight, 2013). Social Analysis As at 2012, Turkey has a population whose medium age was around thirty years. It has the youngest population in Europe. The country is at a better position to increase its labour force by capitalizing on them. Nevertheless, to make this achievable the government ought to contribute towards improving their tertiary education result and labour laws. Presently one of the strengths of Turkey is the ability to increase their employment levels with great ease by capitalizing on the youthful labour force. Turkey also faces a number challenge. First, there are numerous cases of violence against women. According to statistical findings, violence against woman in Turkey has received a rating of thirty-nine percent. It is higher than twenty-two percent of the United States. Even though relevant steps have been taken with the aim of minimizing violence, it has remained to be a troubling issue. Second, the existence of weak labour laws has made it impossible for formation of labour laws. A notable example of the problem the workers undergo is the long working hours without pay. In order for the labor sector of the country to thrive properly, must necessary improvement on the labour laws (Turkey: In-depth PESTLE Insight, 2013). Technological Analysis The Turkish Government does possess a well-equipped information technology sector. Consequently, this offers an enormous investment opportunity for both the domestic and the foreign investors. In an effort aimed at strengthening the ICT sector, the government has further encouraged educational institutions to do, further researches related to the ICT sector. Year in, year out the users of the internet in turkey has been on the rise. The main reason behind the speedy growth of this sector is due to its privatization. A notable setback within this sector is poor IPR environment (Turkey: In-depth PESTLE Insight, 2013). Legal Analysis Turkey has a reasonably friendly business setting, which was strengthened following the enactment of the recent commercial code in 2013. Consequently, this fortified the investor protection system. Nevertheless, the existence of judicial inefficiencies, for instance, prolonged trials and political bias. These factors have continuously been an impediment to the administration of justice by the legal systems. In addition, FDI restrictions also act as a challenge. Reason being, some quarters are unreachable or only reachable to foreign investors. For illustration, some of these sectors include media and television broadcasting and air transport for passengers. However, concerning the future prospects there is the likelihood for the existence of improved investor protection laws (Turkey: In-depth PESTLE Insight, 2013). Environmental Analysis The Turkish Government possesses relevant environmental policies. Furthermore, it is known as a signatory to most of the international environmental treaty. Furthermore, the country is always part of the numerous environmental programs. There are various strengths associated with the Turkish Government. Due to constant updates on the environmental laws, they currently have a modernized set of rules. Furthermore, different bodies under the environmental sector have various duties, for instance, recycling, environmental remediation and many more. Apart from the positive sides, the Turkish government also faces challenges. First, there are elevated pollution levels. Consequently, this raises the need for waste treatment systems, water purification plants, and solid waste management setup. Second, they poorly perform in terms of environmental health and nature conservation (Turkey: In-depth PESTLE Insight, 2013). Pestle Analysis for Czech Republic Political Analysis The Czech Republic has in place a successful modulation to democracy. In addition, it has been with the promotion of democratic values. The country’s open-minded media laws further recommend its democratic ideologies. However, the political scene is characterized by high levels of corruption. The most noteworthy instance of political corruption in recent times in the country has been the arrest of eight high-top officials in the government of former Prime Minister Petr Nečas. It was in June 2013, which resulted in the collapse of the government. With the increasing cases of organized crime, the government departments also involved, the country has to pull up its socks to curb corruption. Early polls were called in October 2013 once the caretaker government appointed by President Zeman failed to survive a confidence vote in August 2013. The sudden elections did not harvest clear winners, but three major parties, CSSD, ANO 2011 and KDU-CSL.that together resulted to 111 seats in the lower house of the parliament, are possibly to form a coalition government (Czech Republic ). Economic Analysis The Czech economy has well-developed infrastructure and an outstanding automotive industry. The country’s finance sector has shown considerable elasticity in times of crisis due to high liquidity support and well-organized management of non-performing loan. However, a lack of caution in lending by credit unions could undermine the confidence of investors in financial institutions as a whole. The government’s fiscal position is bettering due to sternness measures adopted by the earlier government. Nevertheless, the country’s lack of variation of its exports away from EU economies, which adds to more than 80% of its export size, is an area of weakness. Due to this, external tremors could expose the country—especially as the country depends largely on export goods for the growth of its economy (Czech Republic ). Social Analysis Healthcare services in Czech Republic are well developed and well structured with the country owning an excellent stock of doctors and well-trained medical graduates. The incoming government after the former government has promised to better healthcare system. Leave alone introducing social improvements closely related to the minimum income and pension system but also working to provide a care system that provides care for those who are in need most of it and which enables people to retain their independence and their self-respect too. However, the country has a poor record in terms of population tertiary education attainment, which drives down the availability of skilled labour since most people are uneducated hence unskilled. According to the European Commission, the country will see a key flow in the aging population in the first leading years of this century, which will create one of the largest fiscal-related pressures experienced by any EU nation (Czech Republic ). Technological Analysis Czech Republic is also receiving increased investment in Research and Development. It is in order to provide a stimulus to the European Unions’ competitiveness’ and is useful an economy’s relative level of investment in generating new knowledge. The country has also adopted this indicator to help focus on policy decisions and public funding. Investment in Research and development is not however broad-based since multinational dominate the Research and development scene and internal firms in managing research. The technology sector is also limited by poor co-operation between businesses and research institutions. In order to improve collaboration, the government has initiated projects by the ministry of Industry and Trade and technology intervention in the Czech Republic. The Government has also taken into account major infrastructural projects. However, their justifiability because of inadequate already existing Research and development infrastructure and knowledge base of small degree remains a concern (Czech Republic). Environmental analysis The Czech Republic is a member of a numerous of international contracts and agreement. The Organizations cover wetlands, biological diversity, desertification, illegal trade in endangered types, whaling, Tran boundary air pollution, hazardous waste and its disposal and protection of the ozone layer. The government has also put into account the continued increase in use of renewable energy. In an effort to reduce greenhouse gas release in the country that also results, in future risks such as Distorted pricing that pose a big threat to achieving environmental goals (Czech Republic). Swot Analysis Turkey Internal Environment Strengths Weaknesses 1. Turkey is located between Asia and Europe (Abilov, 2010) 2. It associated with the west. In addition, it is a member of various global organizations for instance IMF, NATO and OECD (Bagci, 2011). 3. Its economy is market oriented and greatly diversified with growing service and industrial sectors (Turkish Economy ). 4. They obtain power from underground economy (Council of Europe: Shadow economy in Turkey alarming , 2011). 5. It does possess a large youthful population (Demography and Labor Forces , 2014). 1. They do have a huge amount of external and internal debts (Turkey and External Debts, 2014). 2. Has constantly experienced increase in level of inflation (Inflation). 3. It is unable to carry out tax reforms, privatization, and structural transformation within the banking sector (Komili: Inflation, budgetary deficit could derail economy, 2013). 4. Has been suffering from depreciation of the country’s currency (Candemir, 2013). 5. Turkey experiences political instability due to the inner war (Turkey Profile , 2014). 6. The organs of the state are not well organized. External Environment Opportunity Threats 1. There is reduced barriers due to becoming a member of the European Union. 2. Increase in global integration, which provides opportunities for investors (Europe as a Global Actor, 2013). 3. It can utilize its resources efficiently. 4. Presence of the youthful population offers numerous opportunities for physical labour and workforce manipulation (Turkey’s aging population outpaces youth growth, 2010). 1. May experience striking economic recession 2. It might experience trouble in the event that the banking sector goes bankrupt. 3. They might lose their strategic power as being an associate of NATO due to the emergence of strong ties with United States and Russia (Bagci, 2011). 4. It may experience high levels of crime rates, due to activities like sex-slave that might give rise to increased criminal activities (Number of Prostitutes in Turkey, 2010). Czech Republic Internal Environment Strengths Weaknesses 1. The Czech Republic boasts of well-established infrastructure and an efficient automotive industry (Automotive Industry, 2014). 2. There is the availability of independent regulatory systems/authority. 3. There is the presence of profitable and substantial financial sector (Country Report Czech Republic, 2014). 4. The country offers a stable business environment that possesses elevated levels of trade, financial, fiscal, and labour freedoms (Kiizek). 5. Czech Republic has stable banking sector (Financial stability reports, 2013). 6. There exists an open economy (Working in the Czech Republic, 2010). 1. The Czech Republic government is unstable (Briegel, 2013). 2. There are increased levels of corruption, which might affect the successful thriving of a venture. 3. The constant dependence on the exports exposes the country to external demand shocks (Briegel, 2013) (Czech Republic Exports ). External Environment Opportunities Threats 1. The country considerably depends on exports from other regions (Briegel, 2013). 2. There is greater purchase power among the retailers (Briegel, 2013). 3. The Czech Republic offers necessary conditions for the emergence of new products and markets. 4. The consumption of alcohol products has been experiencing a significant growth (Heleyova, 2006). 1. Three companies largely possess the market share of the alcohol industry. They hold a percentage of 76.5. 2. There is political risk resulting from an unstable government (Will Czech Republic be politically stable). 3. There is intense competition from other competitors in the market sector. 4. Czech is also known as a big producer of beer, therefore penetrating the market might not be easy (BBC news, 2006). Further Analysis of Czech Republic and Turkey Markets Trade barriers There are minimal trade obstacles in both Czech Republic and Turkey. Reason being; they are both affiliates of various international organizations. Therefore, they have opened their borders for goods and services and potential investors from member countries (Czech Republic: 2014 Index of Economic Freedom, 2014). Even though, both countries depend on the imports; the level of dependency on the imports in Czech is much higher. Consequently, this offers necessary grounds for the introduction of Bateman’s Products in both countries. Government Regulations Since both the government of Turkey and Czech Republic is members of global associations, the existing rules are only meant to ensure that businesses operations are in-line with the treaties they signed. Therefore, existing regulations are only inclined towards improving economic activities between member states and limiting cases of competition from non-members. Taxes Taxes and Import Duties while Importing into Czech Republic It refers charges to be incurred while transporting products into Czech Republic. It is either as an individual or as a commercial body. By importing products into Czech, one will require paying excise duty and additional fee to the customs for the purpose of product examination (Import duty and taxes when importing into Czech Republic, 2012). Taxes and Imports Duty while importing to Turkey The amount taxable from the imports is calculated on the basing on the complete shipping value. It involves the costs associated with importing goods and the taxes payable. In addition, imports also experience taxes associated with sales and consumption (Import duty & taxes when importing into Turkey, 2012). Demographics Czech Republic The level of alcohol consumption in Czech Republic has been on a constant rise. About a survey conducted in Czech, the standard of drinking of men is double that of the women. In addition, it was found out individuals in their youthful age also have higher levels of drinking. Clearly, the target populations in Czech Republic are mostly the individuals of male and female gender both in the middle age and in their youthful age (Czech Republic). From a general rating, the level of consumption of alcohol regardless of sex, age, and level of education is at 12.1 for each capita (Lifestyle- Food and drink- Alcohol > Consumption- Current: Countries Compared, 2010). Turkey The general ration of the level of alcohol consumption amongst the citizens of Turkey is at 1.5 litres for each capita (Lifestyle > Food and drink > Alcohol > Consumption > Current: Countries Compared, 2010). As compared to other nations within the same region, it is lower. The level of alcohol consumption of the Turkish nationals in the youthful has been decreasing significantly from the past to the present. The reduction in alcohol uptake among the youth is due to the enactment of stringent laws associated alcohol (Youth in Statistics, 2012, 2013). However, among individuals of the middle age the trend has still been on the rise. Statistical figures reveal that beer are consumed in plenty, and then wine (Sonemz, 2014). Market Entry Methods and Expiation There are various market entry methods. First, three companies majorly own Czech’s alcohol market share. In this case, the most reliable form of market entry for Bateman Company is either through licensing, exporting or through a joint venture. Despite the place having a high consumption level of alcohol, the market share distribution among three companies. With the use of licensing or joint venture, Batemans products are to gain competitive advantage from other existing ones. The benefits associated with entry into a joint venture consist of access to new markets and distribution channels. Sharing of loss in the event of any uncertainty, and access to experienced workforce (Joint Venture-benefits and risks, 2014). Since Czech Republic relies mostly on imports from other countries, it will be more efficient if Bateman Company will invest in foreign direct investment (Net.WorkSpace, How to Enter a Foreign Market). It will enable a reduction in imports of alcoholic products from other countries. An advantage associated with this form of entry is that it will give rise to increased supplies and consequently, increased sales (Shapiro, 2007). The most reliable way to enter the Turkish alcohol industry is by franchising and joint venture. It will serve a more convenient way to a Bateman company to introduce their products into the Turkish Market. By franchising, Bateman Company will be able to minimize risks associated with joining new markets. Furthermore, a franchise form of entry will enable both Bateman Company alongside the other company with the ability to easily purchase, store and display their products (Advantages and Disadvantages of Franchising, 2014). In addition, a franchise will enable selling of proven product (Hatten, 2010). It will be suitable since the country experiences cases of political instability (Letsch, 2014). References Abilov, S. (2010). Turkey Between Two Worlds. Retrieved December Saturday, 2014, from Washington Review: http://www.thewashingtonreview.org/articles/turkey-between-two-worlds.html About Batemans. (2014). Retrieved December Friday, 2014, from Batemans : http://www.bateman.co.uk/home Advantages and Disadvantages of Franchising . (2014, October). Retrieved December Saturday, 2014, from FranExcel : http://www.franexcel.com/resources.php?id=24 Automotive Industry. (2014). Retrieved December Saturday, 2014, from Czech Invest: http://www.czechinvest.org/en/1automotive-industry Bagci, H. (2011). The Role of Turkey as a New Playerin the G@). Retrieved December Saturday, 2014, from KAS: www.kas.de/upload/dokumente/2011/10/G20_E.../chapter_15.pdf BBC news. (2006, November Teusday). 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