Question:
Discuss About The Companies Or Across National Borderlines?
Global marketing, often referred as, International marketing, is the form of marketing which is carried out by various overseas companies or across national borderlines, which includes identification of market, marketing, targeting the markets, mode selection and also implementing some strategic decisions for competing in the international markets. The world is becoming increasingly global in the terms of production, capital, technology, people, business and information (Mobley, Wang & Li, 2012).
The report mainly discusses about a well known Australian based organization, Technology One which is one of the most important and leading organizations operating in the information technology field. Founded in the year 1987, it is currently in the leading position in the market of Australia (TechnologyOne. 2017).
The report highlights the realistic market entry options for the organization in the target market, including the advantages and disadvantages along with the reasons. Furthermore, it identifies the potential market segments, that is, the target markets and their way of servicing. It discusses about the marketing strategies, the positioning strategies and the future prospective of the company and recommendations, with a brief explanation of what Global marketing really is.
The Global marketing can be defined as the art of conveying and conceptualizing a final service and product across the world, in the hope of achieving the international marketing community. If Global marketing is done correctly and properly, then it has the power to take any company to its next level. Various strategies should be implemented, keeping in mind the region or the place the company is marketing its products. For example, the menu of any restaurant say, KFC varies from place to place, based on the region or location the restaurant is serving. Any company focuses its marketing on its items which are popular within the country. Global marketing is very important for the companies which provide services and products that are having a universal demand, such as food, automobiles, household items and others (Kraidy, 2017).
From the previous assignment, it is evident, that the organization has huge opportunities in the market of China. However, there are many issues which they may face. It is highly important for them to overcome the challenges effectively and efficiently, in order to grab the global opportunities. The competitive nature of the organization has also been analyzed in the previous assignment. There are certain threats and weaknesses of the organization which can however be overcome. Effective implementation of the business strategies can help them gain more market share in the international platform (Chow, 2015).
Presently, China leads the world in the information technology field. It is regarded as the world’s innovation hub. Therefore, in the previous assignment it was concluded that the organization’s opportunities in the Chinese Market are huge. The selection of the market is done, keeping in mind, the political environment, growth, economic status, social environment and others. Among all those, China’s business friendly initiatives and political structure, helps in attracting foreign investors. The socialist state is under the dictatorship of people’s democracy which is led by working class. It is based on peasants’ and workers’ alliance. Thus, the country is in its developing stage, generating innovations due to its political structure, which has helped them, become the innovation hub of the world. Moreover, the availability of skilled and cheap employees is also beneficial in this business scenario (Bradley et al., 2012).
In this part of the report, the five stages of overseas market selection are discussed. Firstly, segmentation is done in the selection process that is, dividing the market into subsets of the consumers’ common needs or demands or characteristics. Market segmentation is done after measuring the size of the market’s purchasing power; accessibility that is, the degree of service; sustainability or profitability and action ability. Secondly, selection of the market is done based on the segmentation criteria, after development and screening of the segments (Dunn, 2016). Thirdly, micro segmentation is done, which are the general and specific characteristics. The factors like geographic, linguistic, political, demographic, economic, industrial, technological, religion, education, social, culture, personality, lifestyle and attitude plays an important role in the micro segmentation process. Fourthly, the availability of skilled and cheap workers effects the international market selection. Last but not the least, selecting or choosing the right mode to enter the market, which can be direct or indirect. Direct modes include the distributors or the agents who export directly and indirect modes refer to the broker, export department, trading companies and export agent buyers (Dunning, 2012).
There are vast off shoring advantages for manufacturing in the country of Mexico, thus, it is becoming one of the major and largest economy of manufacturing in the world. From aerospace to electronics and automobile manufacturers, a wide range of industries are strategically planning to make use of Mexico’s resources, in this highly competitive world. There are huge advantages in manufacturing at the Mexican companies, using their resources and labor, thus, Technology One will have high opportunities in operating their business effectively and efficiently in the Mexican market (Ertug et al., 2013).
The reasons for choosing this new market are discussed in this part of the report. Firstly, the advantage of saving costs, with skilled and cheap labors with affordable infrastructure. Secondly, manufacturers can easily export their products at cheap rates. Thirdly, Mexican labors are cheap as well as qualified, with 93% literacy rate. It makes product manufacturing possible at the country itself. Fourthly, Mexico’s culture, environment and robust economy help the business in mitigating and balancing economical risks effectively. Last but not the least; it is easier to enter the market of Mexico as well as beneficial doing business in that country, due to favorable accessibility of shelter and business climate (Jadhav, 2012).
The performance planning of any organization refers to the operational and strategic planning processes, which requires capturing of information source in order to drive and measure the performance of the organization and its behavior. It is important to document the organization’s unique strategic objectives and vision. Usage of planning templates helps in tracking the implementation, which in turn reflects the differences in scale, terminology, structure and time frames. It is important to align planned activities as well as strategic goals (Khan, 2012). The main objective of the Technology One organization is specific, that is to hit the international platform, in terms of financial and market share. It is measurable as the progress can be tracked throughout, achievable as it is realistic and practical and taking the market into consideration, it is attainable. It is relevant as it will help in contributing to the Mexican society. Moreover, it is time bound as the company will establish in less than a year because of its fame in other countries (Jadhav, 2012).
The market entry strategy refers to the planned way of delivering and distribution of services or products to some new target market. It is the way of establishment and management of contracts in some foreign country. Establishing an industry in the Mexican market will be beneficial for Technology One organization. The alternative strategies to be undertaken are, directly setting up an entity, exporting products, usage of resellers or distributors, outsourcing, licensing, franchising, joint ventures and others (Kraidy, 2017). These are advantageous for the company. However, there are few challenges or disadvantages for starting an industry at the Mexican market, those are discussed here. Issues related to security as it is a developing country, labor unions, logistics and financing, availability of adequate resources, bureaucracy and cultural differences can pose a serious threat for the company’s growth and progress (Mobley, Wang & Li, 2012).
Moreover, selection of a target market helps the company to understand what type of audience they are catering to. The advantages are; higher sales value, higher chances of developing strong brand value or equity, operational costs become lower and fewer resources are needed. The challenges are; it becomes costly while developing a specific target market, risks may arise as the seller may have a wrong perception of the customers’ needs and desires, limitations of the market strategy and selection of market may limit the company’s income (Stevens et al., 2012).
The advantages for the generic strategic options are; cost leadership strategy which consistently helps in reducing the business costs, differentiation helps in emphasizing the strengths of production and resale, focusing on the cost and differentiation focus approach. The challenges are; by stressing too much on the competing brands the company may fail to take care of the customers’ demands and needs, technological challenges may arise, cost inflation and others (Hill, Cronk & Wickramasekera, 2013).
Having analyzed the advantages and disadvantages of the alternative strategies, it can be said that starting a new venture strategy would be beneficial for the company because it is a well established organization in Australia, with the consumers highly satisfied with their services. Selection of the target market when entering the new country would be disadvantageous. This is because, the company will not be fully aware of the Mexican culture and diverse group of people as well as their requirements. Moreover, the company should be well aware of the new set of competitors in the new country, thus, these factors must be kept in mind (Cavusgil, Ghauri & Akcal, 2012).
Each and every customer has some specific choices, demands and desires. The factors that play a major role, while selecting a target market, is the customers’ age, gender, probable behavior, lifestyle and others. Typically, it involves segmentation of the market, targeting the global markets, positioning as well as repositioning offerings, niche marketing and concentrated marketing. The preferred strategy is targeting the global markets as it helps in getting brand recognition on the international platform. Technology One is a leading market in Australia, therefore, the customer base is strong. It will not be a problem for the company to position its market in some other developing company, preferably Mexico. The main market of the company is the family focused shoppers who can be served with a huge range of technologies, youth as they love changes, the business market as well as the government market with cyber security services (Walker, 2015).
While selecting the market the following processes are to be undertaken by the company. Market segmentation helps in dividing the market into subsets of the consumers’ common needs or demands or characteristics. It is basically done by measuring the size of the market’s purchasing power; accessibility that is, the degree of service; sustainability or profitability and action ability. Micro segmentation helps in identifying the general and specific characteristics, that is, the factors like geographic, linguistic, political, demographic, economic, industrial, technological, religion, education, social, culture, personality, lifestyle and attitude. The availability of skilled and cheap workers as well as the right mode, effects the international market selection (Tang, Yang & Wu, 2016).
It is easier to enter the market of Mexico because of the advantage of saving costs, availability of skilled and qualified workers at cheap rates, the business climate of the country helps in balancing the risks and exporting products at cheap rates. Importing distributors helps in developing a good relationship with the target market as well as better information feedback. Indirect exports helps in getting fast accessibility to the market with no financial or little financial commitment. Moreover, it has low risk rates (Beamish, 2013).
The possible positioning for each target markets are, directly setting up an entity, exporting products, usage of resellers or distributors, outsourcing, licensing, franchising, joint ventures and others. Directly setting up an entity will be advantageous for the company. However, there are few challenges or disadvantages for starting an industry at the Mexican market. Issues related to security as it is a developing country, labor unions, logistics and financing, availability of adequate resources, bureaucracy and cultural differences can pose a serious threat for the company’s growth and progress (Walker, 2015).
The Porter’s most effective generic strategies are cost leadership strategy, differentiation strategy and focus strategy, which fits with the corporate level strategies. Cost leadership strategy consistently helps in reducing the business costs, differentiation strategy helps in emphasizing the strengths of production and resale, focusing on the cost and differentiation focus approach. Focus strategy helps in focusing on the customers’ needs and requirements building a strong base of customer loyalty (Beamish, 2013).
Having discussed the situation of Technology One organization, it can be recommended that it is easier to enter the market of Mexico because of the advantage of saving costs, availability of skilled and qualified workers at cheap rates, the business climate of the country helps in balancing the risks and exporting products at cheap rates. Importing distributors helps in developing a good relationship with the target market as well as better information feedback. Indirect exports helps in getting fast accessibility to the market with no financial or little financial commitment and lower risks rate (Khan, 2012).
The factors that play a big role, while selecting a target market, is the customers’ age, gender, probable behavior, lifestyle and others. It involves market segmentation, targeting the global markets, positioning as well as repositioning offerings, niche marketing and concentrated marketing. The preferred strategy is targeting the global markets as it helps in getting brand recognition on the international platform. Technology One is a leading market in Australia, therefore, the customer base is strong. It will not be a problem for the company to position its market in some other developing company, preferably Mexico (Stevens et al., 2012).
The positioning for each target markets are, directly setting up an entity, exporting products, usage of resellers or distributors, outsourcing, licensing, franchising, joint ventures and others. These are advantageous for the company. However, there are few challenges or disadvantages for starting an industry at the Mexican market. Issues related to security as it is a developing country, labor unions, logistics and financing, availability of adequate resources, bureaucracy and cultural differences can pose a serious threat for the company’s growth and progress (Jadhav, 2012).
The advantages for the generic strategic options are; cost leadership strategy which consistently helps in reducing the business costs, differentiation helps in emphasizing the strengths of production and resale, focusing on the cost and differentiation focus approach. The probable challenges are; by stressing too much on the competing brands the company may fail to take care of the customers’ demands and needs, technological challenges may arise, cost inflation and others. However, it is being expected that effective implementation of the strategies can help Technology One gain more market and financial share in the global platform (Dunning, 2012).
References
Beamish, P. (2013). Multinational joint ventures in developing countries (RLE International Business). Routledge.
Bradley, S. W., McMullen, J. S., Artz, K., & Simiyu, E. M. (2012). Capital is not enough: Innovation in developing economies. Journal of Management Studies, 49(4), 684-717.
Cavusgil, S. T., Ghauri, P. N., & Akcal, A. A. (2012). Doing business in emerging markets. Sage.
Chow, D. (2015). The Legal System of the People’s Republic of China in a Nutshell, 3d. West Academic.
Dunn, D. H. (Ed.). (2016). Diplomacy at the Highest Level: The evolution of international summitry. Springer.
Dunning, J. H. (2012). International Production and the Multinational Enterprise (RLE International Business). Routledge.
Ertug, G., Cuypers, I. R., Noorderhaven, N. G., & Bensaou, B. M. (2013). Trust between international joint venture partners: Effects of home countries. Journal of International Business Studies, 44(3), 263-282.
Hill, C. W., Cronk, T., & Wickramasekera, R. (2013). Global business today. McGraw-Hill Education (Australia).
Jadhav, P. (2012). Determinants of foreign direct investment in BRICS economies: Analysis of economic, institutional and political factor. Procedia-Social and Behavioral Sciences, 37, 5-14.
Khan, I. (2012). Impact of customer satisfaction and retention on customer loyalty. International Journal of Scientific & Technology Research, 1(2), 106-110.
Kraidy, M. (2017). Hybridity, or the cultural logic of globalization. Temple University Press.
Mobley, W. H., Wang, Y., & Li, M. (Eds.). (2012). Advances in global leadership. Emerald Group Publishing Limited.
Stevens, R. E., Loudon, D. L., Gordon, G., & Williams, T. (2012). Doing business in Mexico: A practical guide. Routledge.
Tang, C. S., Yang, S. A., & Wu, J. (2016). Sourcing from suppliers with financial constraints and performance risk.
TechnologyOne. (2017). Technologyonecorp.com. Retrieved 31 August 2017, from https://www.technologyonecorp.com/about-us
Walker, D. W. (2015). Kinship, Business, and Politics: The Martinez del Rio Family in Mexico, 1823-1867 (Vol. 70). University of Texas Press.
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