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Marketing strategies in a global environment
Marketing strategies in a global environment
International marketing tactics
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There are many disadvantages associated with starting their own branch in India. First is that this option is the most expensive. They would have to pay for all the marketing, equipment, building, manufacturing, production, and staffing that they would need to operate. Mercan Systems would not be able to share any costs with another company. The financial investment needed would depend on the number of regions they choose to operate in (two, four, or nationally) and if they use a direct salesforce or dealers, but it would still be significantly higher than any other alternative. Starting another branch in an international market that they do not already have a location in, is a large change and project to take on. It requires an immense amount …show more content…
It may not be practical to enter a completely new market alone, without any help from existing companies who are already established there.
If any of the previous alternatives for entering the market are chosen, one other consideration to take into account is the pricing strategy. If Mercan Systems chooses to enter the market, they can either use a price skimming or a penetration pricing approach. When using price skimming and selling through dealer channels, the basic module would be priced to the dealers at Rs. 5,500 and to consumers at Rs. 5,900. This would give Mercan Systems an estimated Rs. 650 unit contribution. If a direct salesforce is used under the price skimming method, the prices charged to the consumers would not change. Instead, sales commissions would have to be paid in addition to the fixed costs necessary to maintain and manage the salesforce. The sales commission would be Rs. 550 per unit, making
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8,000 that is associated with a joint venture in four regions through dealer channels. Annual fixed costs are Rs. 7,000. Contingency funds usually range from 5-7% and since entering a joint venture in another country is a large project to take on, a contingency fund on the higher end should be included. A contingency fund of 7% of the total Rs. 15,000 investment would result in a Rs. 1,050 fund. A total of Rs. 16,050 would be needed for this joint venture. Other non-financial resources that would be needed include additional facilities, labor, training, equipment, office supplies, and a marketing plan. Many of the resources, including distribution channels and some facilities, may already be available to Mercan Systems through their joint
Breaking into new markets helps the company grow and brings in new customers, which leads to higher profit margins.
Mercantilism and capitalism both have to do with money accumulation. Capitalism are businesses controlled by private owners. Since they own the business and the government doesn’t all the profit from the work they’ve done and the trades they’ve made goes to them. Mercantilism are countries that are exporting more goods than their importing. In 17th and 18th century this system was used by British government to restrict how the colonies spent their money. Capitalism is the making of the money in a country, and mercantilism is making money from other
When comparing and contrasting the Northern and Southern colonies throughout their development, it is vital to fully understand that each colony differed as a result of their reasons for settlement, geographic setting, and economic establishment; however, the colonies were additionally equivalent with regards to their social perceptions and standards of mercantilism.
Firstly, in assessing ourselves, we determined that our BATNA associated with $37 million. I comprised the cost of building a new plant ($25 million), loss of profits in 12 months ($12 million) and the cost of 90 day option to buy land ($0.5 million). A non-refundable expense of $10 million on buying the option for the land is considered the sunk cost. The maximum amount of money that our group could spend on this buying intention is $40 million. We decided that our target point would be $16 m...
First of all an analysis of the packaging machine investment’s hurdle rate is required. I will use comparable firm parameters approach to figure out the hurdle rate (WACC) of the firm using the information provided in Exhibit 5. The cost of debt should be calculated using the bond information given in footnote 2 of case under Exhibit 2. The cost of equity should be calculated using the Capital Asset Pricing Model.
The large initial capital investment needed for new entrants is another major barrier. The cost of machinery and manufacturing is expensive. It is hugely important and costly to have a global presence in manufacturing as it is extremely expensive to ship machinery to clients around the globe.
Moreover, Ansoff suggested some main direction that companies should follow to develop market and product conditions. The market development and differentiation strategies suggest that in order to increase sales, WRSX have to offer their services in new developing markets such as China or India. The strategy for market development gives the opportunity to expand their service in order to attract competitors' clients and to expand in unreached markets (Barry, Witcher and Chau, 2010). Potential solution could be acquisition of UK agency competitor to assist WRSX to enter new market quicker and smoother go through the barriers of entry such as government regulations and different culture.
Economies of scale are cost advantages that a company obtain due to expansion over a period of time. A new entrant will definitely struggle to meet up on this factor.
However entering into a market as different as Japan is not without its risks, and must be ensured to be successful, with the help of market research, marketing, and operational theories, lest the new venture become a very costly mistake.
The Harvard Business School case study Silvio Napoli at Schindler India summarizes the various problems and issues facing Schindler India regarding its entrance into the new foreign market, India. Schindler Holdings Ltd. is a Swiss-based manufacturer of escalators and elevators which is looking for potentially entering into the Indian elevator market. Main executive committee members predicted that the Indian industry showed great promise in terms of future growth potential. The company’s objective was to manufacture standardized elevators at a cost lower than current customized elevator market. Silvio Napoli, who is vice president of Schindler in Asia, was chosen to lead the new entry into India. To successfully enter and penetrate the Indian market, Silvio and company needed to consider a variety of factors like but not limited to: mode of entry and type of strategy to implement, organizational structure, outsourcing and logistics approaches, marketing, and domestic and global hiring procedures.
The ease with which firms can enter into a new market or industry is a critical variable in the strategic management process. In some industries the barriers to entry are minimal. In oth...
Entry into the market is prohibitive because of, say, government restrictions, high start-up costs or resource ownership such as in mining or drilling.
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
There are high entry costs to enter the market. The large industry competitors already have captured the market share.
...ll as private sectors have gone international with new ventures outside the country. These companies are generating revenue, though modest compared to their overall sales revenue, by deputing their expert personnel outside.