Discuss about the Gaining and Sustaining Competitive Advantage.
With the increase in globalization, the business environment has become highly dynamic and due to this, different countries have become quite close to one another in terms of business and other related aspects. Singapore is often considered to be one of those countries which tend to have one of the largest economies among the different countries present in the globe. The country is a world famous tourist destination and is visited by thousands of tourists annually (Stead & Stead, 2014). Hence, the purchasing power of the country is high as well and this market is quite attractive for any country who wants to export their goods as the chances of a good product being a hit in Singapore is quite high. Singapore also looks out for various products which can be hit in the country.
The reason why this has been recognized this as an opportunity is because the demographics and the lifestyles of the different people have been changing and the Singapore population and tourists have been looking out for better quality products and imported items. Hence, Australia can look up to this as an opportunity to bring about business for their economy as it is one of the best companies present around the globe and hence the company chosen for the purpose of this report named the Yours Truly Chocolate (Barney, 2014). The brand is a socially conscious brand which can attract the population of Singapore and creates a positive image. The report will be following a structured format whereby the external environment of Singapore, the chocolate industry and the market trends will be discussed which will then be followed by recommendations on the same.
The Yours Truly chocolate company was established in South Australia in the year 1989. The company is the producer of high quality confectionary whereby the delectable flavors and the texture has been reflected. The company supports the local industry which can be stated to be a bonus for the market and the general economy. The company sources raw ingredients regularly and runs on local production (Gronroos, 2016). The way in which the company treats their staff tends to determine the highest level in quality. The business makes continuous changes in its technique in order to be able to ensure that it is able to provide best to the different customers.
The company wants to provide the best products and also keep the environmental considerations in mind. When an organization or a customer is producing a chocolate from the Yours Truly Chocolate company then they will be supporting the South Australian manufacturers (Truly, 2018). The products are made from pure Australian ingredients with the help of which they can assist the organization. The products are quite healthy in nature and out glute free as well as GMO free.
In the domain of Strategic Management, the Pestle analysis has a high relative importance as it goes a long way in helping a business organization to understand and ensure that the Yours Truly Chocolate in Australia is able to make the right choices and is able to have an access to the given market in Singapore The PESTLE analysis is primarily concerned with the study of the different factors which range from Political, Economic, Social , Technological, Environmental and the Legal factors (Baker & Saren, 2016).
The political risk in Singapore is fairly quite low. The country is governed by a stable political party and is a democratic nation (Hollensen, 2015). The people tend to believe in the government and their decision making because the company s easily able to provide the company with a better standard of living. This has also enabled various business opportunities for Singapore. Although there is a restriction of free speech for opposition parties, there are several legal and political restrictions as well. The dissemination of content is another issue which is considered to be a political factor.
The economy of Singapore is a free market and it is developing at a very fast pace. The per capita income is quite high and the corruption free environment goes a long way in supporting the business sector (Morschett, Schramm-Klein & Zentes, 2015). The company is quite competitive and the knowledgeable workers tend to strengthen the state of the economy. The legal as well as the financial framework is vert supporting. The economy has been diverse recently, which tends to support the industry and makes it quite stabilized. However, the given constraints have been recognized:
The country of Singapore is an Asian country and thus its economy is based on traditional as well as family values. The residents of the country tend to work hard and fulfill their materialism desire (Goetsch & Davis, 2014). This has been able to support the company to fulfill their productivity needs and thus the purchaser power of the different customers is quite high. The literacy in the given country is very high and the standard of living is above average.
The technological advancements present in the country is high and it is the primary reason behind the development of the country (Rothaermel, 2015). The internet tends to play a major role in the advancement of the country and has eased the connectivity throughout the country. The cost of conducting is very low and this has boosted the social networking. The e-commerce and B2c models have flourished and this has ensured that the electronic sector develops considerably.
There are various legal laws and restrictions prevailing in the country which tends to bring about a strict environment (Frynas & Mellahi, 2015). This is because, legal, regulatory and business settings are very crucial to support the economic growth. The various acts and legislative rules are Electronic Transactions Act, Intellectual Property Rights, Amendments to the Evidence Act, Content Regulation, Tax Issues and Import and Export Procedures.
The Ministry of Environment works well to ensure that the pollution in the given country is minimized and that there are several measures with regard to water pollution and control as well. Hence it can be stated that the country is a remarkable one and business on both national as well as international platforms will be profitable there (Meyer, Neck & Meeks, 017).
Strengths
Weaknesses
Opporutnities
Threats
The porter’s five forces is a useful tool which can be used to analyze the different factors of the Chocolate Industry in Singapore and the manner in which it can have an impact on the Yours Truly Chocolate Company.
During the initial stage, high capital is required. This is because there exists special requirements of the food industry which need to be abided by. It requires knowledge of a wide range of ingredients and lastly the supply chain is very complicated. Hence, the threat of new entrants is very high.
The threat of substitutes in the given industry is very high. These threats are threats about non chocolate snacks, chips and fruits (Eden & Ackermann, 2013).
The bargaining power of buyers is very moderate. The number of buyers have been increasing considerably and the switching cost is quite low. There exists lack of threat of backward integration which poses threat.
The bargaining power of the suppliers is moderate. There are a large number of suppliers present in the given industry. The supplier does not pose a threat of forward integration and there exists undifferentiated raw materials which makes relationships easier. However, suppliers are considered to be crucial, because this product is very important for the industry.
The Threat of rivalry in the given industry is very high. There exists advertisement battles, price wars, high range of flavors are required and lastly, the quality of the products also needs to be quite high which makes survival difficult.
The two different positioning process relating to Yours Truly would comprise of Luxurious, and cheap along with high or low.
The Yours Truly Chocolate will be priced moderately but the quality of the product will be optimum and belonging to high quality. It would be in the segment of luxury and high quality. The given table maps the positioning of the Yours Truly Chocolate Company in Singapore.
|
High Quality |
|||
|
Luxurious |
Yours truly chocolate |
Hershey’s M and M |
Cheap |
|
Cadbury |
Mars |
||
|
Low quality |
Singapore tends to import various Australian products these days from products like children milk to agriculture to vitamins and bottled waters. As the tourism attractiveness of the place is very huge, chocolates and other snack products are increasingly popular (Carroll, Primo & Richter, 2016). Hence, these tend to make such products quite popular in the given domain and this gives rise to different opportunities for the Australian company.
However, the health awareness of the Singapore population is increasingly and more people are becoming health conscious which then tends to create a barrier for the chocolate companies, However as the Yours Truly chocolate company tends to produce healthy products and gluten free items , the given threat would not cause a problem for the Australian enterprise. The people of Singapore have a high cultural acceptance in terms of collectivism and hence, the companies looking for expansion can do well (Foxall, 2014). The tax is between 13 to 17 per cent which is preferable.
The competition between different companies engaging in the chocolate business has been increasing considerably due to the increase in the tourist visits, furthermore, there are various other chocolate brands present in the industry like Hershey’s, Mars , Cadbury and Nestle along with M and M which provide intense competition to the company. Although the competition which is present is
The cost of the company Yours Tricky is mainly considered with the price of the raw materials chocolates, exporting costs and the cost of packaging for the chocolates. The costs vary according to the demand and the shipment size.
The cost of production of the chocolates will cost around 50$ for every 5kg being produced. Furthermore, shipping and exporting the chocolates will add approximately 13% for the VAT. The price at which the chocolate will be sold in Singapore is approximately 85$ Australian dollars for 5 kgs being sold. Hence, the company will be earning approximately 35$ for every 5kg being sold (Barney, 2014).
As stated earlier, the company wants to position itself as a luxurious chocolate which is good in taste and is healthy as well. That is the reason why the price has been set this high. The company wants to focus on being different and healthy which will enrich the vision of the company in the eyes of the different customers (Armstrong et al., 2015).
|
Revenue Gross Sales Sales Allowance Net Sales |
308.320 -0.00 $308.320 |
|
Production fees VAT fees Marketing Expenses Total Expenses |
-$53.600 -$16.800 -$10,000 -$80.400 |
|
Profit Before Tax |
$227.92 |
|
Tax |
-$22.188 |
|
Profit for the year |
$205.732 |
Target market
The target market for the chocolate company will be the younger generation. However, the main target market is the tourist group. These tourists will be willing to buy the product and hence, they will also be the target market of the company. The demographics will be middle to high income group people.
As the chocolate being given will be gluten free and will also be free of any unhealthy materials, this will suit the needs of the population who want a healthy lifestyle. The people tend to adapt to the needs of the lifestyle of US and Australia and for this reason they would like to have products from Australia as it is believed to be 100% fresh. They would conceive this premium and luxury with their own healthy habits.
Hence, the marketing strategy of the company needs to highlight this aspect and ensure that the freshness and healthy aspect of Australia is highlighted.
The social media networks can be used as the primary network which helps the company to get in touch with the different customers. Singapore has an access to the advanced technology which can be taken advantage of in the given scenario. Mediums such has Facebook and Twitter can be used for advertisements. Hence, these can be used effectively. The company needs to make an ad which highlights the benefits of chocolate and enriches its tastes. The company can form a website which will help the customers to know more about the given products,
The marketing campaign for the company Yours Truly will be as follows:
Conclusion
Therefore, from the given analysis it can be stated that or the Australian company, Yours Truly Singapore is an appropriate destination whereby the growing tourist population can be taken the advantage of. The Crowd of Singapore and the tourists visiting the given place tend to like the idea of the pure and healthy food like the west. Hence, instead of going with the different popular European chocolates like the Hershey’s` M and Ms and others, the company can opt for the new healthy and gluten free Australian products.
The given analysis highlighted the external as well as the internal environment successfully along with suggesting the market strategy which will go a long way in heling the firm to become successful. Hence, the opportunity for Yours Truly Company is a good one for Australia into the Singapore market.
Although the opportunity for Yours Truly company is a very attractive one. However, the company needs to ensure that it is successfully able to enter into the given market. As the Singapore company is not aware of the brand, the company will not be able to find success if the marketing strategy is not successful.
It may also face competition problems relating to the competition which it receives from the other European brands and hence, for this purpose the product offering needs to be good enough so that it can compete effectively.
However, advertising on the right social media may be helpful for the company.
References
Ahmadi, M., & Wheatley, K. (2016). A SWOT Analysis of Big Data. Journal of Education for Business, 91(5), 1-6.
Armstrong, G., Kotler, P., Harker, M. & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Baker, M.J. & Saren, M. eds., (2016). Marketing theory: a student text. Sage.
Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson higher ed.
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Carroll, R. J., Primo, D. M., & Richter, B. K. (2016). Using item response theory to improve measurement in strategic management research: An application to corporate social responsibility. Strategic Management Journal, 37(1), 66-85.
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.
Engert, S., Rauter, R., & Baumgartner, R. J. (2016). Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, 2833-2850.
Foxall, G. ( 2014). Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.
Goetsch, D.L. & Davis, S.B. ( 2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.
Gronroos, C. ( 2016). Service Management & Marketing: Managing the Service Profit Logic. John Wiley & Sons.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education Limited.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
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Truly, Y. (2018). Chocolates online | Yours Truly Chocolates | Adelaide | South Australia. [online] Yours Truly Chocolates. Available at: https://yourstrulychocolates.com.au/ [Accessed 20 Jun. 2018].
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