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Introduction

In the wake of globalization, the complexity of coordination of services and functions is becoming more and more worrying hence the need for good management approaches as a company plans to conquer global markets. The decentralization of tasks within his company especially central sales, distribution and procurement functions needs to be integrated to meet the company’s goals and objectives. One of the consequences for this is the disintegration of systems which can be extended to managerial abilities of business portfolios[1]. Due to advancement in technology and modernization in the world today, most businesses are beginning to explore international markets for better profits and opportunities.

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This paper will therefore discuss the current strategies in management approaches that are required by the company.  It will also conduct an environmental audit of a target market such as Asia and particularly China as a potential consumer base. It will also identify possible strategic directions that the board members of this company will consider utilizing in order to increase their global presence. Finally, it will assess managerial challenges that the company will comer across while implementing the proposed strategies.

Background information

In the recent past, trading has become increasingly global in some way because of the need to gather and increase the company’s financial base. Advancement in technology including communication efficiency and better international relations has contributed to the promotion of international trade. Competition has however become a great challenge to the success of international trade but most companies are rising to the challenge. To achieve greater investments and better market opportunities in the international market, it is necessary that primary and secondary market research is done, market analysis, country analysis, product analysis to ensure that information regarding the country, competitors and possible challenges are obtained in advance

Customer information and start-up costs

Customers in a foreign market are normally sensitive on currency, quality and quantitative figures of countries which the products originate from. Therefore in building a market entry strategy, various issues need to be taken care of; the infrastructure, market information and other resources are needed for a start. First, it begins with the development of buildings and other networks that are crucial to the company.

Secondly, are the government issues such as licensing, taxing, policies and duty remittances In addition, massive start up campaigns are necessary to reach all the target within a very short time. Transactional costs are crucial to international marketing because there are language barriers, logistic costs; physical distance and other bargaining costs make initial costs very high. Enforcement of contracts and weak legal integration between countries are also issues of concern for the company

  1. Current strategic management approaches

Internet strategy

One of the best drivers for business is the internet. It is closely connected to globalization because of its global outlook and efficiency. The largest impact that the internet offers is the distribution and sales. This is one of the disintermediation factors that allow companies to reach their customers in all parts of the world. Online marketing also referred to as E-commerce is based on the technology of internet and the usage of personal computers. In earlier days companies used power full computers to computerize millions of transactions carried out every day[2].

Through internet Branches of the same company can develop networks, through which they could keep up to date with business progress and could improve service provision to customers. E-marketing is relatively a new advancement in the field of marketing even then there are many business and customers who have switched from traditional to online marketing. The reason being quite obvious, the convenience and flexibility it provides cannot be ignored. Flexibility of time, place, human resources and consists involved. As internet globalizes this world and in the same rate online marketing is becoming global.

P.E.S.T ANALYSIS

P.E.S.T analysis has been used by this company to analyze their external business environment. The simple analysis involves understanding the organization’s political, economic, social and technological environments with reference to those who do business with the company.

  1. Political

Political factors may have a direct and indirect effect on the performance of the company. Some of the decisions made by the federal government of the U.S have impacted negatively on the operations of the company. Take for example legal suits that can be brought against it can result in serious financial implications.

  1. Economical

Every business is affected by economic factors. Fiscal policy rates, interest arte policy, currency exchange rates, consumer factors, etc. It is possible that the U.S climate of the economy dictates how the consumer behaves in the society. If an economy is booming, recessing or recovering, the confidence of the consumer will automatically change.

  1. Social factors

Forces within the society such as media, family and friends have affected the way the company has sold its products. Most of the customers have been made to believe that products made from America are of high quality. Social factors affect our attitude, opinions and interests on the way we view products from certain companies.

  1. Technological factors

The way this company operates its business has changed as technology changes. The internet for example, has assisted companies such as this one to meet new markets and extend its global outreach. It has had a profound impact on the marketing mix strategies of many organizations. Business should keep in touch with changing technology and modernization in this ever changing world

Foreign direct investment (FDI)

FDI is the direct ownership of processing, manufacturing or assembling facilities in a target country by a mother company. The company can transfer resources to developing country which has a good customer base and then set up branches in any other regions or areas of the country. The resources include; technology, personnel and capital. The company will be able utilize the resources in the target country including in the human resources, manufacturing equipment among others[3]. The company can also acquire existing companies which are not particularly getting enough sales from the domestic markets. It is also possible for the company to set up its own company and start manufacturing the products directly

Opportunity analysis

An opportunity analysis is an invaluable client tool for identifying and prioritizing opportunities to minimize unwarranted variation and inefficiencies. A powerful resource for employers it is that helps them to understand opportunities and act upon them in a professional manner.  By providing key statistics and other issues one will be able to gather relevant information on the market. Businesses worldwide feel the pressure to improve their workforce productivity significantly and expand to reach new markets with complex products. To meet these ends, technology adoption and advances is necessary

  1. Environmental audit of a suitable market-China[4].

China is one of the countries of the world in which many multinational companies are now targeting. The main reasons for this include; the huge consumer base offered by the large population and the high growing economy that is booming at the moment.

  1. Socio-cultural forces

Culture is a problematic issue for many international marketers because it is inherently nebulous and normally difficult to understand. It is possible that employees of a company can violate the cultural norms of the Chinese people without knowing hence the people in China becomes uncomfortable with the behavior. In china for example, there are many festivities that are strictly observed in addition to other religious believes such as the Xian Hum day. Chinese culture is the most elaborate and diverse in terms of religion, food, clothing and lifestyle. The company must therefore be able to adjust skillfully to the culture here depending on the marketing strategies to be applied by the company.

  1. Attitudes and beliefs

China is among one of the countries with unique culture and beliefs. The country is well known for its diverse but strict cultural understanding for food, religion, family beliefs, lifestyles etc. All these factors must be inherently taken care of by a detailed preliminary research on the specific cultures that must be incorporated. A nice idea would be to employ as many of the locals as possible to be able to quickly integrate the two cultures adequately.

  1. Languages

The main language of the Chinese people is the Mandarin language. Mandarin is the overall language adopted nationally among the Chinese population. However, there are also other foreign languages that have been adopted such as English, Japanese and French. All these languages are international and it is possible for any company to find a conducive environment for trading.

  1. Education

The literacy levels according to the latest government estimates are estimated to 89 % for adults which   is good indication of how the Chinese market can be able to understand, critic and accept the products from the company. With an average of 89 % and 0.626 development index, the company is able to obtain proper and well trained personnel to enable it meet its targets ion the country.

  1. Possible strategic approaches and decisions for the company

Licensing and franchising

Franchising is about the application of economic endeavors in the area of product and services from the manufacturing, supply, processing, distribution and marketing. The company can be able to subcontract services from one company to be able to ease expenditures. On the other hand, licensing is not a standard document but depends on the parties involved; it can change in terms of how it is structured. It is a document to show the commitment of each and every member of the party. Both franchise and licenses are legal vehicles which are used to conduct businesses among different parties hence able to protect themselves from the any legal suits or disagreements.

Strategic partnership

Strategic partnership with companies dealing with complementary products can also help marketing to get the targeted group. There  is need to always be able to observe the current market trends and predict any eventuality that may arise such as change in market prices or development of new brands of the product through blending with other products. Joining international trade organizations like International Federation for Alternative Trade (IFAT) which is global network of fair trade bodies  which will act as representative of local producers in identifying global changes and providing assistance to producers to meet the required standards.[5]

Joint ventures

Joint ventures are forms of market entry that allows for technology sharing and joint product development. The main advantage of joint ventures is to get proper political connections that will allow for favors to be achieved. It is usually suitable when; the market power, resources and size of the partner is small compared to the industry leaders. If the company can merge or have a joint venture with any company which is still junior in developing countries and then boosts its market power, it will be able to meet the demands in that particular region. The main issues that are usually sorted out during the discussions for joint venture are; agreement periods, pricing methods, ownership and control, local firm capabilities and technology transfer.

The promotional strategy

Promotion is an important marketing tool which is commonly used to market new products in a foreign country. The process requires huge investments especially when it comes to advertisements. There are various forms of promotion; personal selling, publicity, sales promotion or advertising. Promotion of products and services can be carried out in different forms and the most common one is through product life cycle

The diagram below explains the cycle which products can behave in the global market when it is introduced to the market. It starts from the introduction, growth, maturity and finally the decline when the consumers are fully aware of the products and services and there is no need for further promotions.

Figure 2. Promotional through the product life cycle model

Source: Fletcher, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, Frenchs Forest Pg 49 

Export market potential

There are several ways available for oversees marketers to gauge the market potential for their products and services. The most important way to assess a products success is to look at its performance domestically. For this company, since it has met the demands of the local market, it has particularly passed this test especially in Asia where there is somewhat similar needs and conditions. Some products may have limited potential especially if there is significant differences from domestic markets in terms of; environmental and climatic factors, wage costs, purchasing powers, availability of raw materials, product alternatives etc. 

  1. Managerial challenges

After the 2000 millennium crossover, many companies realized that they will not survive the changes unless they meet challenges of; management, information technology and globalization of businesses. This is a threefold experience that has brought radical changes in many companies. The main management challenges that this company will undergo while trying to conquer the international markets[6].  The ultimate challenge that will be the main driving force for the company will be the identity. Most people in the global market have diverse culture which is full of; preferences, prejudices, value, idiosyncrasies or habits which may collide during the time constructs are being built.

Many marketing executives argue that globalization will be achieved only when an employee of the company will be promoted irrespective of their origin, language, culture, race or color. By doing this the company will be achieving what globalization is meant to do. Although international trade generally benefits a country as whole, interests within countries puts obstacles such as protectionism to limit free trade. The Chinese government has done this before and other countries such as the United States have also done it for the good of its citizens. This can be done in several ways; tariff barriers, quotas, voluntary export restrains, subsides to domestic products, non- tariff barriers etc.

Approach to customers and cost effects

Customers in a foreign market are normally sensitive on currency, quality and quantitative figures of countries which the products originate from. Therefore in building a market entry strategy, various issues need to be taken care of; the infrastructure, information and other resources are needed for a start. First, it is the development of buildings and other networks that are crucial to the company.

Secondly, there are government issues such as licensing, taxing, policies and duty remittances In addition, massive start up campaigns are necessary to reach all the target within a very short time. Transactional costs are crucial to international marketing because there are language barriers, logistic costs; physical distance and other bargaining costs make initial costs very high. Enforcement of contracts and weak legal integration between countries are other factors that need to be assessed before the final arrangements to start the business are made. 

Organizational management and planning

This is one of the changes that an organization does in order to meet the challenges of the intended market. It also goes inline with the issue of how approaches can affect organizational performance.  The planned organization will comprise of a structure that will provide a confident management team, sales force, technical team and the company directors. The use of a scorecard to control and monitor the company’s performance is very important scorecard concept is very simple; all factors that influence the organization’s overall performance are taken into account and analyzed mathematically. Typically, a scorecard measures across four key areas[7];

  1. Financial perspective-  how shareholders perceive the company
  2. Customer perspective-customer’s view towards the company
  3. Internal process perspective- the efficiency and effectiveness the processes in the company
  4. Learning and growth perspective-the company’s agility level.

Ethical and corporate responsibility stance as a marketing strategy

Corporate responsibility is the obligations that consider the interests of all customers, employees and shareholders, communities and other ecological considerations in the majority of all their operations in the company. This obligation will extend beyond their legal obligations to factors such as profits and dividends. But it should also consider immediate and long-term social, cultural and environmental consequences of their operations. Today’s heightened role of businesses in the society has been enhanced by increased sensitivity and awareness of urgent ethical and environmental issues. These issues include.

  • Improper treatment of workers
  • Faulty production that inconveniences or endangers customers
  • Environmental damage

As part of international commitment to conduct business with integrity and comply all applicable laws, the company strives to maintain a strict code of conduct that will see its social responsibility in the global market increase through the following; fund raising, community assistance, project funding etc. ethical behavior is an individual responsibility regardless of position or location, it will reflect the highest ethical standard expected of employees, directors and all people bound by it[8].

Branding

Product branding is a key factor in determining the selling trends in that particular market whether domestic or international. In an international market, this company can adjust its brand name and rename it after a populous personality to increase perceived value of the customer towards the product. A good brand name is usually attractable and easy to use. There are different kinds of brands that can be applied by this company and they include; premium brands, economy brands, fighting brand and licensing brand

Pricing

Penetration pricing is a mode of pricing where the price for the products can be set to be lower than what is offered by other competitors so as to gain a market share. Another one is the economy pricing in which the cost of marketing and manufacture are kept at a minimum hence becomes a no frills low price for the services and products. Premium pricing entails the use of high price which indicates uniqueness about the company. This approach is applicable where a substantial competitive advantage is in existence such as for luxuries[9]

Recommendations

The company can improve on its leadership structure. It is now time to have managers and leaders to be technologically oriented with what is happening in the global market. The current crop of leaders in this company is management oriented and thus the combination of the two approaches will ensure that the company propels further.  The company’s strategy that is required to meet the core principles of the objectives is to fully exploit the market through the potential offered by the global market

Conclusion

There are many benefits of marketing services and products for this company overseas including increase in sales. The decision should however be analyzed carefully in order to avoid economic frustrations and other problems, issues of politics, cultural and language barriers etc. This company through its domestic and international marketing approaches has been able to meet its objectives especially when it comes to competitive ventures.

This company has the obligation to further propel the company forward thus able to create and maintain a healthy marketing culture within itself if it sticks to the above proposed marketing roles and strategies. The moist important of them, is to use internet marketing where the company can try to meet the larger global market. If the current communication advances, complex marketing techniques, and growth in the digital marketing procedures are anything to go by, it is absolutely mandatory for every marketer to adopt electronic marketing as a market entry technique in a new country.

References

Bell, D. (1980): Defining the Business: The Starting Point of Strategic Planning; Prentice-Hall, p. 88-89

Borden, N. (1978): The Concept of the management. Journal of Advertising Research, June, Vol. 2, pp. 20-15. Available in Schwartz G. Science in Management. John Wiley &

Sons, p. 100-120

Culliton, J.  (1948): The Management of Marketing Costs; Graduate School of Business Administration, Boston, Mass: Harvard University. p. 340-354

Dale, M. (2006): The Art of Marketing: Developing Management Skills, Vol. 3, Crest Publishing House, New Delhi Pg 120-133

Fletcher, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, Frenchs Forest Pg 45-60

Kotare K and Helena M., (2004): Global Marketing Management, 3rd Edition, New York, John Wiley and Sons Pg 110-112

Lee, K and Carter, S., (2005), Global Marketing: Changes, New Challenges and Strategies. 1st Edition, Oxford Press Pg 484-492

Steven, T. (2002): International market segmentation: issues and perspectives on global management approaches, Intern. J. of Market Research, vol 10, 20-33

[1] Bell, D. (1980): Defining the Business: The Starting Point of Strategic Planning; Prentice-Hall, p. 88-89

[2] Borden, N. (1978): The Concept of the management. Journal of Advertising Research, June, Vol. 2, pp. 20-15. Available in Schwartz G. Science in Management. John Wiley &

Sons, p. 100-120

[3] Fletcher, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, Frenchs Forest Pg 45-60

[4]Fletcher, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, Frenchs Forest Pg 45-60

[5] Fletcher, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, Frenchs Forest Pg 45-60

[6] Culliton, J.  (1948): The Management of Marketing Costs; Graduate School of Business Administration, Boston, Mass: Harvard University. p. 340-354

[7] Culliton, J.  (1948): The Management of Marketing Costs; Graduate School of Business Administration, Boston, Mass: Harvard University. p340-354.

[8] Steven, T. (2002): International market segmentation: issues and perspectives on global management approaches, Intern. J. of Market Research, vol 10, 20-33

[9] Bell, D. (1980): Defining the Business: The Starting Point of Strategic Planning; Prentice-Hall, p. 88-89

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