Manchester City as a Potential Market for a Rent-a-Bike Scheme in the UK - Case Study Example

Manchester City as a potential market for a rent-a-bike scheme in the U.K Universal proceedings and competition affects approximately all contemporary businesses and organizations are more and more facing confrontations as a result of the ever altering external and internal business environments. The financial and political connections concerning the movement of funds, goods, and persons across state boundaries jointly with ideas and principles have augmented the speed of change, vagueness, indecision, and unpredictability. For firms to stay competitive and global in scope as well escalating there financial foundations they require to go on board on market entry schemes that will augment high-quality results in terms of discovering new and suitable markets. (Allard, 2005) The UK city selected by the OYBike Company to market the rent a-bike scheme is Manchester city which is regarded to be among the biggest cities in the U.K. Therefore OYBike Company will not face many problems during its business transactions because the city is considered to be globalized. According to latest research the U.K is considered to be among countries where bikes sales can pick up within a very short time since the residents are reportedly said to like riding particularly in Manchester city. The first-class economy, steady exchange rates, supple import duties, improved trade tariffs and further significantly a good business environment are aspects that supports international marketing activities in Manchester. Through the concept of globalization, the U.K particularly London and Manchester cities take pleasure in the benefits connected with economic policies put in place by the European countries since they have embraced the concept of globalization. For these reasons therefore OYBike Company may not experience a lot of problems in form of business or trade regulations while introducing the rent a bike scheme in Manchester since fewer economic rules and systems will be faced by the company unlike if the investment could have been done in other countries. The figure below shows one of the favourite models of bikes that OYBike Company markets in various European countries and now considering marketing it in Manchester City in the UK Source: Bryan, M. (2007): mountain bike, retrieved from http://www.mountainbikephotographer.com/ accessed on 25/11/2007 As a marketing consultant I will recommend OYBike Company to carry out situational analysis better known as PESTLE analysis. PESTLE analysis is very critical to any company who needs to go global and OYBike Company should make use of this notion in an attempt to make bigger its market share that is by expanding to Manchester city. This examination purely engrosses understanding the governmental and organizational trade environment setting and the OYBike Company should pay concentration to the following issues: (Gronroos, 1994) The first factor is that of political factors whereby the OYBike Company have to deal with the political differences or interferences that might be practiced by the U.K government especially in Manchester city. Latest research reveals that political systems of nations may have negative effect to the carrying on of businesses, for example some countries practice capitalism while others practice collectivism political structures. The U.K administration exercises capitalism form of system because it allows for factors of production to be privately possessed and the government performs only marginal roles that the private segment of economy cannot carry out unlike in communism and collectivism that emphasizes on collective goals rather than stressing free movement of factors of production. Therefore it will be ideal for OYBike Company to invest in the U.K particularly in Manchester city because there will be fewer restrictions and therefore we can wrap up that it will benefit from first-class external political environment in the city. (Mark, 2001): Economical factor is another issue that OYBike Company should consider which mostly deals with financial factors in the business economic environment. Such issues may comprise foreign exchange charges, money and worldwide monetary structures like the inflation, use of Euro currency, counter trade, balance of payments, monetary policies, and fiscal policies among others. After carefully carrying out cautious investigation of these issues OYBike Company does not face a lot of these issues except only that it may be subjected to few of them e.g. inflation rates and the equilibrium of payments. The other key factors are that of social factors which OYBike Company has to evaluate before going investing in Manchester city in the U.K. Such issue within Manchester city e.g. source of income, family, social structure and education may impact positively or negatively the way OYBike Company will market its bikes. It is important to note that social factors always influence our attitude, views and interests on the approaches we analysis products from some companies particularly those touching their way of lives. (Philip, 1996) Technological factors are also significant factors that OYBike Company should consider before investing in Manchester city in the U.K. It should be noted that superior technologies through innovation processes are being experienced by a lot of firms as a consequence of the notion of globalization. Globalization has occupied centre phase in this century and the application of e-commerce and internet marketing is on the increase and thus OYBike Company will benefit from such technologies. Therefore the company should consider using superior techniques that will facilitate production and supply of the bikes to Manchester city in order to meet the requirements of the customers, for example produce high-class quality bikes that will have competitive edge over those that are produced in the U.K particularly in Manchester. OYBike Company should also evaluate the legal factors before marketing the bikes in Manchester city. The way OYBike Company will operate or function with regards to functioning rules of law in the city for example how OYBike Company will handle the lawful rules in the U.K particularly in Manchester is more significant since it will avoid disagreements and thus augment the achievement of the firm’s objectives. OYBike Company in its business settings will be engaged in authorized business exercise of marketing bikes which is legalized by the existing U.K laws since such activity is not illegal. (Lee and Carter, 2005) The target market of rent-a-bike scheme products is arguably reported to be big globally including in the U.K. Although research suggests that many people living in the U.K and especially in Manchester city prefer using other means of transport like private owned vehicles it is also indicated that bikes are a favourite to many because they posses it for fun and exercising purposes in order to keep fit and thus there exist substantial market of which if OYBike Company will make use of in order to increase momentous market share and thus dominates the region in sale of such bikes. Therefore OYBike Company manufacturing and marketing managers should produce and target customers that include both the young and the old folks in the society in Manchester city. It is therefore important for the management to utilize recent technologies for example in producing bikes that are light and those that are considered comfortable to the old. It should consider marketing bikes that the youths view them as stylish and of latest models. With such strategies the company will win the hearts of both the young and the old in the society and thus the sales will go up significantly. OYBike Company is considered to having a larger market share in Europe and through diversifying strategies the company is now exploring new markets in the U.K. Research reveals that OYBike Company and its rent-a-scheme programs have prospered because the company has concentrated in particular market segments instead of competing across the entire market in the world. With such specialization therefore the company stand a chance of performing well in the chosen target market for there products. (Cullen, and Boteeah, 2005) For OYBike Company to succeed in introducing rent-a-bike scheme in Manchester city it must consider the mode of entry to the market. Mode of entry in this particular case involves ways in which the company will seek to market its bikes Manchester city. Such a mode to be chosen will depend on the excellence of the company’s bikes and the environment of competition that competitor companies use in trying to enlarge there market shares and to sustain there expansion. According to research, there is are variety of modes of entry to diverse markets and OYBike Company has to choose the efficient ones after carefully evaluating cost benefit analysis that will include cost to be involved, risk and the extent of control which can be put into effect over them in terms of safety measures. Therefore OYBike can use either joint ventures or direct method of modes of entry to markets its bikes in Manchester city. (Kotare and Helena, 2004) Under direct method it will involve OYBike Company exporting the rent-a-bike schemes bikes to be sold directly to Manchester in the U.K. It is frequently regarded as the complex method of entry since the proprietor or the exporter of the merchandise is completely accountable for the business responsibility for example identifying the proper market for the merchandise and establishing the appropriate distribution means to be used. Therefore it should be noted by the OYBike Company that this mode necessitates much consideration in terms of organization and the capital to be used in the complete exporting process. It is also debatably the most excellent method since the exporter may gain from getting utmost profits and may take pleasure in long-term expansion thus the business can continue its base in those countries and in this case in Manchester city in the future. It will be ideal for the firm since it will be good for the future of the company and thus solidifying its market share in the city hence can expand easily to other major cities in the U.K. at a future date. (Hill, 2005) Joint venture partnership is another method of entry that OYBike Company should utilize when entering Manchester city in the U.K. This method of entry is termed as a partnership formed by one or more firms with a sight to carry out an ordinary business jointly. They contribute evenly to the trade and have the same opinion to share any proceeds in a definite percent in the ordinary course of the dealing. Such a business is called equity joint venture and it is good because there is partaking of risk and loses among the partners. Another kind of joint venture is that of contract joint venture which engrosses formation of new companies in which both foreign and local investors share possession and control. (Lee and Carter, 2005) Therefore this method of entry will be an ideal situation if the OYBike Company because it is still young in the U.K and wish to explore other markets for their bikes in other cities in the U.K. thus such method will be appropriate because it needs fewer resources to invest in. conversely, it has possible problems that may take the form of sharing of profits, employment matters, market exposure and decision making process due to diverse long-term interest of both partners. For every company including OYBike Company to be successful in its marketing strategies adopted and to acquire sufficient market share it must embark on promotional activities that will lead to exploring new markets. It is therefore advisable for OYBike Company to particularly engage in promotional activities such as vigorous advertising of the rent-a-bike schemes bikes in various media such as televisions adverts and newspapers adverts that are commonly associated with the people of Manchester city in the U.K. (Cullen, and Boteeah, 2005) Such adverts should be made attractive should be made attractive and appealing to target market so that they will be able to buy and try the bikes being sold. The company also should utilize after sales service method of attracting and maintaining customers in Manchester city in order to sell the bikes to many customers in that city. Also for the first few months in Manchester city OYBike Company can offer discount to the potential customers and engage in selling the bikes at low prices for sometimes than the prices offered by its competitors in the U.K. Such strategy of selling the bikes at low prices for sometimes can be referred to as a strategy of acting to be loss leaders in order to mislead the comp4etitors thus might make losses in trying to ape OYBike Company. (Hoyer, and MacInnis, 2001) However, all these promotional tools should only be used after the management of OYBike Company has carefully carried cost benefit analysis. Such analysis should not impact the performance of the company negatively in the long-term but instead create more opportunities in the market. The company should carefully allocated expenses to such promotional activities without affecting the profitability of the company adversely in order to meet the set objective. At some instance before the company introduce the rent-a-bike schemes bike in Manchester city, it must first carry out test marketing in order to project the performance of the bikes once introduced in the city. Therefore for OYBike Company to succeed in Manchester city it should carry out constant evaluation in order to make sure that the company’s marketing practices are a success in the long-term. The managers responsible should observe how the rent-a-bike schemes are performing in Manchester city and compare it with the old markets in other European countries or cities where such projects have been undertaken in order to make viable decisions that will guarantee success in the market place. OYBike Company should also take the advantage of globalization notion and engage itself in dynamic marketing schemes for example the use of technology in discovering new markets like Manchester city in the U.K. The company should therefore utilize on-line marketing techniques in order to boost the likelihood of the business to discover additional and various markets in the U.K. (Bowker, 1991) Read More