Expanding Hayward Tyler’s Business In France: A Strategic Analysis

Background of the organization

The market condition in the 21st century is challenging and competitive enough to create a hindrance for firms of any size big or small. Rivalry is one of the biggest challenges a business faces in the contemporary world. To survive in the competitive market, business organizations need to strategically use their resources and avail every opportunity that comes through their path. Hayward Tyler (Luton) a company in the UK is interested to expand their business in an international market and that market that can prove to be beneficial is the market of France. This paper focuses to evaluate situations and accordingly make discussions whether they should expand to France or not and if they will expand that what market entry mode they should opt for. The paper will be focusing on the environmental and competitive analysis of France so that Hayward Tyler can create the marketing strategy. The company should follow a marketing strategy that would help them create a sustainable competitive advantage. Additionally, an in-depth analysis of STP will also be provided so that the company can formulate its marketing strategy accordingly. 

Hayward Tyler is driven by excellence in engineering, the company is known for the reliable and good quality motors and pumps, and is also known for the good quality service that supports their products and legacy of brands. The environment in which the company operates in the energy sector, and it is one of the demanding sectors increasing competitiveness. Especially in China, India, UK, USA there are around 2,300 BCPs and more than 600 nuclear pumps in power plants, the company provides long-term consistency and precision performance (Anon, 2020). The company focuses on the employees, they not only take care of the needs of the customers but also of the employees and this ideology has made the company consistently grow and perform and also provide quality service. Laufs, Bembom, and Schwens, (2016) postulated that taking care of the employees, customers and meeting the expectation are signs of a good company whether SME or a big firm.

Hayward Tyler thinks that they have expanded their business successfully in the USA, China, and India and now they want to look forward to expanding in one of the countries in Europe so that it will help them expand their business more. The reason, why France as a market has been selected, is because of the Brexit, second, it falls under European Union, thirdly, it is a developed country and hence the chances of earning profit will also be more, lastly, the company will get a wide platform to sell their products. Since 1958, France has been a part of the EU. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020). The company wants to expand so that it can expand its sales and increase its brand name.

The objective behind expanding the business

There are a few things that Hayward Tyler should keep in their mind before expanding their business in France. The market of France needs to be evaluated properly, for getting a better business result. To do that the external environment of France needs to be analysed and that can be done with the help of PESTLE analysis along with that Porter’s Five Forces will also be used to analyse the competitiveness. 

Political, economic, social, technological, environmental, and legal factors affect any country’s environment and the same is with France, these macro-environmental factors will be evaluated and help Hayward Tyler understand the factors that would prove harmful or useful in the path of their success. 

Political Factor- France has a semi-presidential form of government (BBC News, 2020). Hayward Tyler might face issues related to corruption, stability in politics, and interference of the government. The political stability index of France according to the report published by The Global Economy, (2020) shows that in the year 2019 the index (political) of France was 0.32, this means that the political scenario in France is quite stable and will be an opportunity for Hayward Tyler. The score of France in the rule of law is 1.41, which might be a concern. The effectiveness of any government affects companies positively or negatively. In terms of the effectiveness of the government, the score of France is 1.38 as mentioned by The Global Economy, (2020), which will again be an opportunity for the company, and it is suggested that the company should use this opportunity to control the market of France. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020).

Economic factor- HaywardTyler wants to expand so that it can increase its sales, serve more customers, and increase its share in the market (Weforum, 2020). This is the reason why the company selects France as it will provide a huge spectrum of the market base. A report that has been published by the World Bank, (2020) shows that in the year 2019 the GDP of France was approximately $2.716 trillion. Approximately $42450 is the GNI of France (World Bank, 2020). The rate of inflation in France was 1.3% and so it was declared as one of the safest and most secured countries, where business can be done (Global Competitive Index, 2019). Since 1958, France has been a part of the EU. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020).

Market Evaluation of France

Social factor- The population of France according to the reports published by the World Bank in the year 2020 was 670,559,887 (in the year 2017). This will be an opportunity for the company as they will get a huge market base of customers, one reason being the high living standard of the people. There are a few things that Hayward Tyler should focus on if they want to increase their sales, these are the culture, arts, and tradition of France. In France, the rate of unemployment in the year 2020 was 8% as mentioned in the reports by The Global Economy, (2021). The effect of a pandemic might cause a certain amount of problems, though not major (WTO, 2021). 

Technological factor- According to BBC News (2020), the French National Research Agency is a reliable source of advancement for the French government. The creative components may be beneficial to the firm. Throughout the world, France has been recognized as one of the most technologically advanced nations, notably in the fields of science, information technology, and space exploration.

Environmental Factors- Even thoughFrance is regarded as the most persuasive country on the globe, the government is unable to control climate-related challenges. The most common ecological difficulties include pollution of the air, water, and noise, as well as biodiversity double-dealing and other issues. To work in France, Hayward Tyler needs to respect the environmental rules (BBC News, 2020).

Legal factor- If the company plans to work in France, it’s critical to observe the Employment and Labour Act of 2021. Hayward Tyler should focus on the employees’ well-being by making sure that they receive proper compensation, a stress-free work environment, additional time pay, leave, a safe working environment, and many more. The French delegates can labor for up to 4.5 years straight without taking a break in the middle. In a week, the total number of hours worked is 35.

There are a few things that Hayward Tyler should keep in their mind before expanding their business in France. The market of France needs to be evaluated properly, for getting a better business result. To do that the external environment of France needs to be analyzed and that can be done with the help of Porter’s Five Forces (Bruijl 2018).

Rivalry- Rütschi, KSB limited, Pollard Pumps are some of the renowned pump and motor manufacturing companies present in France. These organizations are highly technologically advanced and provide excellent service. They have already built a strong customer base in France. And would provide a tough competition to Hayward Tyler, and so the company needs to be unique in the way they approach customers to survive. The services should be based on keeping in mind the French client specifically (Klapper, Biga-Diambeidou, and Lahti 2016).

• Bargaining power of suppliers- In France, the suppliers’ bargaining force is reasonable. Any company with a permit can obtain a discount on unprocessed components for their products. These advantages might help the company gain a sustainable benefit.
• Bargaining power of customers- The majority of this organization’s clients are from various service sectors; the clients’ barraging power is reasonable. The products and the design of the things are dependent on the providers, and as a result, the company must adhere to the financial requirements. By being clear, Hayward Tyler may increase its market share and expand its client base by focusing on meeting the needs of its customers and producing exceptional products and services.
• The threat of new entrants-The hazards of new participants are considerable in this business because of the low entry limits. Many companies have been focusing on this current domain for the past few years, and as a result, the level of competition has increased. This fierce competition may force the organization to reassess its pricing and target French clients in the early stages of the company to gain a foothold in the market. In light of this, the organization’s marketing system should be changed to reduce the risk.
• Threats of a substitute- To distinguish its products from others, the company might focus on its client-driven help plan. The organization should remember just one thing; clients’ interests are changing; thus, the organization should also pursue the client’s path to establish a credible brand image. Oneren, Arar, and Yurdakul (2017) stated that the threat of replacements in this business is quite significant since substitutes provide a large number of suitable things. This might have an impact on the organization’s growth and should be mitigated if Hayward Tyler provides appropriate service.

PESTLE Analysis

The culture of every country is different (Adekola and Sergi, 2016), so Hayward Tyler should consider the culture of France before deciding anything. The company should collect all the information before entering France, it will help the company perform in a better way. The Hofstede model will be used to understand the cultural aspect of France in comparison to the UK. 

• Power distance- The score of France is 68, this means the children from an early age are motivated to be independent (Beugelsdijk, and Welzel, 2018). The score of the United Kingdom is 35, which means that the (Hofstede Insight, 2021). This means that citizens of the UK are more emphasized on reducing disparity and fostering equality whether it is related to payment or education. Thus, the difference between the two countries based on power distance is quite huge. 
• Individualism- Society, and individuals are interrelated to each other (Kristjánsdóttir et al., 2017), the score received by France in terms of individualism is 71, which that the people in France are quite independent. The score of the UK is 89 (Hofstede Insights, 2021), which means the individuals in the UK prefer not to mix their personal and professional life. The gap regarding the aspect of individualism is quite less. 
• Masculinity- The part of Hofstede’s framework focuses on the factors that encourage people to work towards the betterment of society. The score of the UK is 66 and that of France is 43 (Hofstede Insights, 2021). It could be derived from the score that France supports feminist culture, and the UK supports masculine culture. The people and the culture of the UK are driven by success (Jackson, 2020) and again a lot of differences could be found between UK and France. 
• Avoidance of Uncertainty- The part of the approach deals with the uncertain situations, that might prove detrimental and the ways to minimize the risk. The Score of the UK is 35 and that of France is 86 (Hofstede Insight, 2021). Thus, from the score, it can be understood that there is quite a lot of difference in terms of happiness and satisfaction (Yldrm, Arslan, and Barutçu, 2016) between the country. 
• Long-term orientation- This approach determines ways by which a country learns from its past to improve the present and reduce the challenges. The score of France is 63 and that of the UK is 51 (Hofstede Insights, 2021). 
• Indulgence- Indulgence is the way countries satisfy their needs and desire. The score of France is 48 and UK is 69 (Hofstede Insights, 2021). Again, there is quite a difference. 

This part of the paper will deal with the STP and the 4P’s of marketing.

Hayward Tyler needs to segregate its clients based on factors such as demographics, behavioural, geographic, and psychographic. In the case of geographic factors, Hayward Tyler should focus on the urban areas of France, because all the big companies and clients are based in urban areas. Coming down to the demographic segmentation, and behavioural segmentation the products that are sold by the company are motors and pumps and hence demographic segmentation will not be needed. The nature of the assistance and the appropriateness of the pricing make the most difference in the organization’s ability to attract clients. In the case of psychographic division, Hayward Tyler should concentrate on large and medium-sized businesses, partnering with clients and surveying them to determine what their needs are, as indicated by Miguel (2014).

The nature of the assistance and the appropriateness of the pricing make the most difference in the organization’s ability to attract clients. In the case of Hayward Tyler should concentrate on large and medium-sized businesses, partnering with clients and surveying them to determine what their needs are, as indicated by Miguel (2014).

• Positioning the brand is the most important thing that the company should do to maximize sales, and for this, the company needs to properly communicate with the clients and make them understand the product of the company. The products should be displayed in such a way that they should be in the minds of the clients. A customer-driven service should be provided in France (Blankson et al., 2018).

• Product Strategy- Hayward Tyler is driven by excellence in engineering, the company is known for the reliable and good quality motors and pumps, and is also known for the good quality service that supports their products and legacy of brands. Especially in China, India, UK, USA there are around 2,300 BCPs and more than 600 nuclear pumps in power plants, the company provides long-term consistency and precision performance. The culture of France will be given value (Zhang et al., 2018).
• Price Strategy- The competitive pricing strategy will be used, the company will produce a good quality product at a good price thus, it will maximize sales and generate more revenue (Chen et al., 2016).
• Place Strategy- Hayward Tyler should focus on local companies and distributors to reach the clients, as well as various social media platforms must be used to interact with clients (Festa et al., 2016).
• Promotion Strategy- The online and the traditional promotion strategy should be used to convey messages and services related to the products, moreover French as a language should be used for conversing effectively (Lahtinen, Dietrich, and Rundle-Thiele, 2020).

By using the Upsala model it can be said that the Hayward Tyler is in the fourth stage of internationalization (Expansion of international sales). The organization has focused mostly on countries like India, China, the USA, and the UK so they know how to expand their brand in the international market as it has done before and was quite successful in it. The only thing they have to do is to do market research on France and very cautiously invest, to maximize sales (Forsgren, 2015).

Hayward Tyler needs to decide what market entry mode they need to use before entering the market (France). All the opportunities have been utilized in places like China, the USA, India, and the UK. Now the company needs a new market to grow their business. The sole reason behind the expansion is to maximize sales and improve their brand name in Europe. France is a developed nation and hence provides a big market to the company to sell their products (Erickson, 2017). The pact that has been signed by UK and EU has enabled free trade. 

There are various ways by which a company can enter a market for instance- Exporting, authorizing, licensing, joint venture, foreign direct investment. Based on the external environment in France, it can be said that the market is a bit complex because the clients are different and their perspective is different so an effective approach should be selected to enter (Nippa and Reuer, (2019). By evaluating the market of France, it can be said that the joint venture market entry mode needs to be used. 

Hayward should work together with various local businesses/firms/distributors of France so that they can easily reach the clients as the market of France is entirely new to them. The local forms/distributors know how to approach clients, and effectively deal with to maximize sales and profit. Moreover, they also know the norms and policies of businesses in France (Parameswar, Dhir, and Ongsakul, 2018). It will reduce the chances of risk. The French language should be used to communicate instead of English to make a more effective impact in the minds of the clients (Hollender, Zapkau, and Schwens, 2017). For the French clients the price, quality, and after-sales service matter a lot. In France no informal activities are allowed, everything needs to be legalized and carried on in a systematic way (Qunyong, 2017). Thus, the joint venture mode of entry will prove useful for Hayward Tyler. 

Conclusion

Thus, it can be concluded by saying that UK-based motor and pump manufacturing company Hayward Tyler can maximize their sales and business in countries like France if they follow a proper marketing strategy. There are many markets entry modes but it is suggested that Hayward should follow the joint venture approach to enter the market. The company should also keep in mind the culture of the people in France, and use French as a language for communication. Finally, they should focus on the competitive pricing strategy, use traditional and online mediums to promote their products. 

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