It is a decision of the company’s directors to expand KWEICHOW MOUTAI to UK market. The companies have enough capital to finance this process and be able to establish itself in the market. The company will now join a global market as it will be moved to other countries. This paper will discuss on how the company is prepared to enter the global market.
Background of KWEICHOW MOUTAI
1.1Current marketing position
KWEICHOW MOUTAI is a company that is striving well in the market. It is making sales and profits at a rate convenient for it to expand. The company possesses more than seventy-five percent of the sales in the line of its products. The company shares are rated highest in the market. Thus, the company can be said to have dominated the market. The company is well established as it offers the best quality of the goods. It also has the advantage of possessing the best technology and a very conducive working environment all that have contributed to the growth of the company.
1.2 International marketing experience
The company is not new in the international market since it has played its part well in the market (BRANDT 2007). To begin with most of its directors are also directors other companies in the global market so they know what the international market entails. KWEICHOW MOUTAI Company has been trading with the neighboring countries. The company obtains some of its raw materials from the neighboring states since they are cheap there and accessible. The international market is also reliable, convenient and profitable all other factors constantly held. The company can, therefore, be said to experience well in international marketing as we have seen that it have been able to acquire markets in neighboring countries and India
1.3 Explore new markets
The company is well-equipped will personnel’s who are well skilled and who can come up with effective international marketing strategies. To acquire a good market requires the company to have carried out good research (Jacobs 2005). It has been the company’s strategy to use experts to study the new market. It analyze it critically to know its opportunities, advantages and difficulties associated with its entrance and maintenance. Due to the changing trends in business, for it to survive and achieve its objectives the only way to do this is to explore for new markets, to increase the number of customers who will buy more so as to increase the profits.
Rough market screening of potential markets
KWEICHOW MOUTAI Company carries out a rough market screenings for potential markets through its group of experts. Market screening involves gathering significant information about a certain market in relation to the product the interested company offers. The company wishes to use Europe as its rough market continent. For the management to know, this market analysis will be carried out under PESTLE. PESTEL is a market strategy that entails examining political factors, economic factors, social factors, technological factors, legal factors and economic factors surrounding a market. To start with are the political factors in Europe, these are the political events that can influence the company’s decision to enter the market (Porter 2011). Europe, the tax rates are moderate, due to this the company will be able to pay them if it joins the market. The trade restrictions that have been set in Europe are “bottle-necks” thus they require a lot to pass through them. In terms of stability, Europe is politically stable with stable governments. According to the economic factors of Europe, the market is friendly. The economy of Europe classifies as developed continent. The interest and exchange rates of Europe are favorable for trade. There is no inflation, and the currency value is business friendly. Europe as a continent it has attained a credible economic growth and development. The people living in Europe have a high per capita income hence the living standards are high. Social-cultural factors are those issues on how people relate with each other and the matters touching on social life of people and cultural beliefs, values and norms of a certain society (REIS PINHEIRO 2011). People in Europe are cautious about their health they will, therefore, not consume any product in the market. The employees would like to be protected from hazard working conditions and provided with protective gears. The population growth rate is low, however, there is market for the products, the issue of age structure in Europe is such that those people who are 30 years and above are the largest population. The career attitude of the Europe people is that the utility is subjective; hence, the goodness of a job will be on individual tastes preference, comfort, and perception. The products KWEICHOW MOUTAI Company sells acceptable by people in Europe. In Europe, reading newspapers is a habit of everybody. Hence, using them to advertise the company will be very effective and fruitful. On technological status of Europe; Europe has undergone a technological transition on technology. The technology in Europe does not threaten the company entry into the market. There are means appropriate for production. Information is an important ingredient in business activities; there are quality communication infrastructures. There is also ease in access to the internet that facilitates business activities such as this case of global marketing. The infrastructures in Europe will not draw back the business but will take it to another level. There are reliable means of transport from one city to the other and from one country to the other. The governments in Europe continent encourage on innovativeness, for this, there are technology incentives to promote technology advancements. There is a high rate of automation in the continent this is an advantage to the company as this will reduce the number of employees require by the company (Porter 2013). On the legal factors to be analyzed under PESTEL, these are matters concerning law. These are matters on rules and regulations such as registration of the company to the country. The legal factors also include patent rights among others. The employment laws that fall under legal factors are that which the company can be able to comply. The company can be able to meet the minimum wage requirement. Rules on environmental pollution in Europe are very strict, however, the company production do no waste much wastes. Environmental issues are to prevent soil pollution, air pollution, noise pollution, and water pollution. It has raised a lot of concern to protect the ozone layer. This approach to market analysis is beneficial to the company because it gives an overall picture of the organization in relation to the market. The value of money or currency in Europe compare to that of USA the margin is business gap. The currency’s demand is very high and is part of the international market currencies. The economy in Europe is promising since it is stable; there is no inflation and very high price fluctuations. Europe is a large continent comprising of many countries. In each of the countries, there are viable opportunities that need to be filled.
Fine marketing screening
Fine market screening is a series of activities aimed at analyzing all the parties of the market. The KWEICHOW MOUTAI company is surrounded by internal and external environment. Internal environment is that which the company can control while the external environment is forces that the company cannot control. Internal environment comprises of forces within the company. Participants of the internal environment are the employees since they provide direct services to the company. In UK, there are many qualified managers, for this reason, an internal environmental issue on management changes will not be a big challenge. Employees in Europe are provided with better working conditions and their unions monitor the wages paid to them. However, in Europe there is no habit of employees going on strike over petty issues. The cultural changes are part of the internal environment (Papp 2010). The cultural changes such as gender, beliefs, and values are held constant, and employees adapt a new company`s culture. The culture depends on the influence of the key leaders of the organization. Finance is part of the internal environment because finance is the steers of the business operations. External environment in UK are events that are outside KWEICHOW MOUTAI Company. The events are unpredictable, and the company cannot prepare early for them. An example contributing to this environment is the government and competitors among others (ÖZ 2009). These events include changes in the economy, for example, inflation, increase in interest rates and exchange policies among others. Competition in UK is very stiff as an external factor that the company cannot control. The other event in UK is the political issues such as the political instability. UK government is outside the company`s control, the regulations that the government passes, for example, tax rates, duties among others cannot be controlled by the company. Then the other issue on the external environment is the industry; this concerns how the industry is concentrated.
Analysis of UK market
4.1 analysis of consumer behavior
The analysis of UK market is necessary since it is the target market of the company. The forces of demand and supply determine the flow of goods in any market. In UK, the demand of goods is high while the supply is very low. Demand for goods is the quantity of goods that consumers are willing and able to buy at any period. The factors that make the market demanding is the availability of disposable income. In UK most of the people are employed, this means people are earning a living. Money on a consumer can be put into three uses these are spending or consuming, saving, or saving (CLAPHAM, 2008). Most people in Europe put their money into two common uses these are spending and saving and for this reason; there is a lot of disposable income. Since there is an aspect of a large supply of goods in the market for KWEICHOW MOUTAI Company to benefit with the largest demand for its goods, it will need to observe the following. The company needs to strategies on the price of its goods and services (BOSSEL 2003). All other factors held constant the decrease in goods and services increases the demand for the goods and services. Branding is a marketing strategy being observed in UK; these are aimed at catching the attention of the customers. The company will have to ensure its products emerges the best to win a large market share. The other issue of concern in UK market is that people prefer quality than quantity. It is a developed country where people have large per capital income. The consumers are ready to spend their money but on the quality of goods and services. They measure the utility of goods in terms time duration the product will take among others. The government is responsible for providing money and monitoring the prices of goods and services. The government provides public goods these are defense, education, health and education and infrastructure. Forces of demand and supply therefore, determine the market flow of goods and supplies. The market is an open market where the firms have the freedom to enter and exit the market. A firm has high chances of surviving in the market if it can minimize the cost, produce quality goods and satisfy customers. Customers are the leaders in the market. The level of technology has led to the availability of all goods at minimum costs.
4.2. Competitors with the market
The market for goods and services is similar to that of capital. However, differences occur on some of the areas of the business. There is no case where businesses exceed consumers. Thus, the success of the business is at the hand of the business itself. Profitability in the market varies, as the market is an open market and a free market. The profitability of any company will depend on the demand of its products. The competition of the goods and services will also be on how a certain company can strategize. The company with the best strategy possesses the large market share (Nowicki 2009). These strategies are selling, distribution strategies, and marketing strategies. It is the qualifications, skills, tactics and experience of the personnel of a company such as managers, researchers and developers and markets among others. It is very expensive to enter into the market in UK. There are many costs involved for a new company to join the market. The costs are much higher in like our case where the company is from another country (Porter 2013). The costs of construction or initiation cost, legislation cost and tax among other costs are some of the costs involved in the market. For a company to make a profit, it must be able to sell beyond the market costs, selling, distribution costs, and production costs. Firms have adopted different distribution channels in the market. Every firm develops a plan on the best available and accessible means to distribute its goods and services with the motive of reaching most customers to sell more recover costs and make profits. Consumer behavior is a concept that many industries, companies and firms in UK market are investing on as they try to understand how consumer reacts under different circumstances. The knowledge is very important to know what to produce, how to produce it, when to produce it, in what quantities to produce it and how it reaches the customers. UK market like any other market undergoes trends of depression, recession, and boom. It is up to the companies to identify the best market conditions at a specific period. Among the factors that were mentioned earlier about the success of the company in the market are access to essential products that others do not have and the ability to utilize the advantage of economies of scale.
SWOT analysis of KWEICHOW MOUTA
The SWOT analysis of KWEICHOW MOUTAI Company is a technique meant to analyze the strengths, weaknesses, opportunities and threats all which surround the company. The company has the following strengths; it has a competitive advantage because it unique selling strategies, it is well equipped with resources both assets and people. The company also has good and reliable finances; it can conduct researches on markets, reach them and occupy them, it has good technology and strategically located (Worthington 2010). The company has the following weaknesses; employees lack morale and commitment, problems with identifying a good reputation, failure to meet deadlines and timescales, lack of patent protection and limited access to natural resources. The weaknesses pull back the company, so as to move forward the company should focus on the available opportunities. Opportunities are viable gaps; they include a gap of a good not yet in the market, possession of reliable technology, friendly government regulations and removal of barriers in entry to UK. However, KWEICHOW MOUTAI Company faces the following threats. The consumers are likely to shift to other companies’ products; there is a threat of the emergence of competitors, threat of new regulations, and the threat of high bargaining power of consumers and suppliers.
In conclusion, the KWEICHOW MOUTAI company has high chances of surviving in the global market. After careful analysis of the Europe country where UK is located it gives an overview of the market and later on analyzing the environment of UK portrays the market conditions in relation to the firm. The market in UK proves to be promising if strategically invested. An analysis of the strengths, weaknesses, opportunities and threats facing the firm is important to determine the survival of the business. The company should now make a decision based on the analysis carried out about the strategy to join a global market.
I would recommend that the company to invest in the viable market which it has already identified in Europe. However, the company needs to construct budgets on cost of entering the market, and then imaginary profit and loss and income statements based on statistical data and speculations. It would be much cheap if the company constructed a subsidiary in Europe where it can produce its products rather than sending them there as finished goods. The reason is that production cost in Europe is cheap; it will also prevent failure to supply to the customers due to delays to import. In UK, there are a lot of qualified personnel and who can provide quality services at affordable price or cost. The company should, therefore, employ many of its employees from UK. Europe shows to be s a good place to conduct business; the company should identify the specific cities and locations where the company should initiate the business. It is also important to understand the rules and regulations of the country the business are being established. These are the bylaws and company acts concerning the KWEICHOW MOUTAI type of company. The company should have understanding on cultural conflict resolution policies since it I now joining another country. The knowledge will prevent the conflicts from occurring which will build the reputation of the company.
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