Discuss about the Brand Resonance in Franchising Relationships for Strategic Management.
For achieving the strategic initiative of ToolsCorp of expanding in the global marketplace, the products and service portfolio that can be provided globally needs to be determined. The products built by the company are lawn furniture, lawn mowers, power tools, microwaves and ranges. To try and seek its place in the global market place, the organization shall also analyse the market. The customer needs, target market and competitors shall be analyzed. The strategic implementation shall be discussed where the business location and special equipment shall be outlined. The potential ramifications or risks, and feedback mechanisms are devised (Mullins, 2012).
For launching the company in the global marketplace, ToolsCorp needs to conduct a preliminary analysis regarding the format, quality, prices, and selling points. The target market also needs to be analyzed.
The market for ToolsCorp can be divided into various segments on the basis of common interests, needs and changing demands. The various segments are:
Geographic Segmentation
ToolsCorp wants to take an initiative for global expansion from Tennessee, which is currently established in the south-eastern region of the United States. The company can consider expanding in the other parts of the United States and cross the territorial boundaries. Not just America, but other countries such as Australia and India can be explored for expansion. Both the countries have significant business opportunities (Bodea & Ferguson, 2012).
Demographic Segmentation
The segmentation can be done on the basis of gender, age, occupation and education level. The products of ToolsCorp shall suit both men and women. The lawn mowers and microwaves simplify the work and make it automated. The people who are career-oriented shall prefer purchasing microwaves as it makes work easier. The people who have gardening or related occupations, they shall purchase lawn mowers. The lawn furniture can be purchased by all age groups of people. Precisely, the products of ToolsCorp are suitable for the age group 25-50 (McDonald & Dunbar, 2011).
Psychographic segmentation
The people who have an active social life can be categorized under this market segment. The people with a great aesthetic sense who believe in making their place and environment look beautiful are also targeted. These are luxury products and the people with a luxurious lifestyle are subject to target. The people willing to spend their leisure time lavishly are most responsive under this segmentation. The traditional methods of cooking and cutting the grass from the lawn are outdated. The people wish to simplify their work and opt for technological innovations are categorized under this market segment (Wedel & Kamakura, 2012).
The target market is chosen as the people belonging to the age group 25-50 who are career-oriented, have a have a social-economic status and prefer moving with the technological trends. Not just residents, the products are suitable for the professionals who own hotels and tourism spots. The product category is also suitable for the municipalities, garden and park owners who open spots for the people willing to relax. Also, the power tools are useful in the construction industry as the contractors and architects use these equipments to serve their purpose (Hair, 2013).
ToolsCorp shall be sold in retail stores as well as supermarket giants such as Walmart, Woolworths, Tesco, Marks and Spencer and various others. The companies are famous in selling electronics and they attract a large number of buyers regularly. These multinational retailers have a wide range of products and services. Moreover, the products such as lawn furniture, lawn mowers, power tools, microwaves and others can also be delivered online globally. The consumers have developed an online shopping attitude as they are reluctant to visit the stores. Therefore, ToolsCorp can expand the markets online to increase sales. The delivery charges may be applicable based on the distance and weight of the product (Dent, 2011).
The global market positioning of the products of ToolsCorp should be seen as a reputable and luxurious range. The prices charged shall be competitive with the luxurious brands as the organization needs to position itself as a luxurious brand. The company must ensure purity and high quality of products and services so that the retailer giants consider involving it in the sales (Bruggeman et al., 2012).
For microwaves, there are various international such as LG, Samsung, Morphy Richards, Black and Decker and various others. These brands hold a high amount of market share in the global market. These brands are renowned for its range of electronics and appliances (Kapferer, 2013).
The famous power tools brands are Metabo, Bosch, Hitachi, Dewalt, Stanley, Cheston, Powertec and various others. These companies provide a wide range of products such as drill, angle grinder, glue guns, power and hand tool kit, screw guns, nailers and staplers, blowers, power planes, welding machines and various others. All these brands are sold in the international market retailers such as Walmart or have online reach (Stuart, 2014).
The lawn mowers have a few competitive brands such as Stihl, John Deere, Modern Tool and Die (MTD), Global Garden Products (GGP), Toro and various others. These brands are renowned in the markets and are mostly sold at the retailer giants such as Walmart, Tesco and many others (Husqvarnagroup.com, 2016)
One-Year Objective
The first year objective is to establish itself in the market and make the people aware of the brand. Heavy marketing strategies shall be adopted to make the people aware of the new company in market. Advertisement shall be made using television commercials, social media and hoardings to make an announcement of the new brand. The celebrities can also endorse the brand. The proposal for the first year is to focus on the brand awareness and creating stimuli to generate sales (Jeyarathnam, 2012).
Five-Year Objective
For five years, the objective is to capture a greater market share. The customers of the competitors identified in the previous section must be attracted towards the company so that they choose ToolsCorp over other available brands. The objective is to enhance the market reputation by increasing operations in five more countries by penetrating one country every year (Jeyarathnam, 2012).
Ten-Year Objective
The ten-year objective is to become an multinational giant company for tools and electronics. The product portfolio shall be twice of what it is currently and the services shall be expanded. The objective is to be the top most company for tools and appliances with its services in over 25 countries. The company shall also form strategic alliances so that the company provides mutual benefits in terms of pricing and operations (Jeyarathnam, 2012).
The strategy can be implemented using franchising as the market-entry strategy. Since the objective is to expand market share, franchising can easily help in entering foreign markets. The products and services can be sold using a licensing relationship. ToolsCrop may provide license and offer assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration. In a traditional franchise, the focus is not on the system of doing business, but mainly on the products manufactured or supplied by the franchisor to the franchisee (Badrinarayanan, Suh, & Kim, 2016).
Supply Chain Risk
The organization is the implementation of strategies to manage the daily and exceptional risk. If the business is expanded globally, there might be a supply chain risk as there shall be greater number of intermediaries for ToolsCorp. With greater number of intermediaries, there shall be activities and people added between the company and end-consumer that makes the supply chain physically vulnerable. There is a risk that the end-consumers may not receive the goods in the appropriate manner. With online deliveries, the goods may be damaged in transit (Girling, 2013).
Financial Risk
There is a requirement of heavy investment for expanding globally. Not just finance, there is a requirement of human resources, organizational resources, and capital requirement for running operations. All the operations and processes require significant finance for smooth flow. If the global expansion strategy is not met in the determined manner, it may lead to heavy losses. Also, there is a major requirement of investment for marketing activities. If the marketing communications are not delivered in the appropriate manner, it shall not generate sales and revenue (Girling, 2013).
Political Risk
Different nations and territories are bound by political risks and instabilities. The government of different countries offer trade barriers and tariffs. It may be risky for ToolsCorp to penetrate different countries as there maybe geopolitical risks involved. The import and export barriers may also make trade difficult (Girling, 2013).
Competitor Risk
The competitors who have high reputation in the global market might make the competition intense. The intense competition may restrict ToolsCorp from expanding in the global market (Girling, 2013).
The feedback can be derived from the customers in different nations based on the perception of the brand. Surveys and questionnaires may be generated in every six months so that the company knows which direction to move in (Girling, 2013).
References
Badrinarayanan, V., Suh, T., & Kim, K. (2016). Brand resonance in franchising relationships: A franchisee-based perspective. Journal Of Business Research, 69(10), 3943-3950. https://dx.doi.org/10.1016/j.jbusres.2016.06.005
Bodea, T. & Ferguson, M. (2012). Pricing segmentation and analytics. New York, NY: Business Expert Press.
Bruggeman, J., Grunow, D., Leenders, M., Vermeulen, I., & Kuilman, J. (2012). Market positioning: the shifting effects of niche overlap. Industrial And Corporate Change, 21(6), 1451-1477. https://dx.doi.org/10.1093/icc/dts009
Dent, J. (2011). Distribution channels. London: Kogan Page.
Girling, P. (2013). Operational risk management. Hoboken: Wiley.
Hair, J. (2013). Essentials of marketing research. New York, NY: McGraw-Hill/Irwin.
Husqvarnagroup.com,. (2016). Competitors | Husqvarna Group. Husqvarnagroup.com. Retrieved 12 August 2016, from https://www.husqvarnagroup.com/en/about/market/competitors
Jeyarathnam, M. (2012). Strategic management. Mumbai: Himalaya Pub. House.
Kapferer, J. (2013). The new strategic brand management. London: Kogan Page.
McDonald, M. & Dunbar, I. (2011). Market segmentation. Amsterdam: Elsevier/Butterworth-Heinemann.
Mullins, J. (2012). The new business road test. Harlow, England: Prentice Hall/Financial Times.
Stuart,. (2014). Tool Brands: Who Owns What? A Guide to Corporate Affiliations. ToolGuyd. Retrieved 12 August 2016, from https://toolguyd.com/tool-brands-corporate-affiliations/
Wedel, M. & Kamakura, W. (2012). Market segmentation. Boston: Kluwer Academic.
Major Competitors
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