The International Market Entry Opportunity - Myassignmenthelp.Com

Question: Discuss aboutThe International Market Entry Opportunity. Answer: Introduction The current business report will discuss the international market entry plan for the Villa Group, which is currently planning to enter the consumer market in Australia. The Villa Group is considered to be one of the largest Conglomerate company in Maldives. The major business operations of the business include that of the shipping along with that of import and export activities. Other major services are communication, education, fishing, tourism and media. The company was established in the year 1986 and they currently have their headquarters at Male. Being one of the largest business organizations in the nation, the total revenue of the company is estimated to be $150 million dollars as of year financial year 2016 ("Overview - Villa - The Leading Business Initiative in Maldives", 2018). The major areas that the company serves apart from Maldives include Singapore, Hong Kong, Japan and Germany. The company in order to expand the range of business is planning to initiate the business in Australia and UK. Nevertheless, under the current business environment in the company has to face higher levels of business competition within the consumer market of UK due to the existing Conglomerate companies both at the local and international level that includes Virgin Group, Walmart, Tesco, Unilever and many others. Hence, under the current circumstances, the local marketing consultancy firm will prepare the international marketing plan for the Villa Group for the business environment of Australia. The geographic position and the vast size of Australia will offer healthy business opportunity for the Villa Group in the business of shipping and transportation. The company will mainly focus on the business areas near eastern side of Australia, where the major business areas of the n ations are located including the cities of Sydney, Melbourne and Canberra. The business report will be prepared by discussing the potential of the company with respect to the international market. The external business environment of Australia will be discussed using the tools of Pestle analysis and Porters five force. The marketing mix strategies will be done using the tools of 7Ps, STP and Competitor analysis. Additionally, theories related to that of market entry will help the company to deal with the initial challenges. Potential of Villa Group to Enter the International Market After the establishment of the company in the year 1986, by Mr. Qasim Ibrahim, the business operations of the company have been able to establish as the largest private shipping company in Maldives. The company later invested in the resort and tourism industry. The overall assets of the organization include that of the five resorts, having 2008 beds and 8 major cargo ships and tankers that are used in the trading operations. The company also is currently having the 5 island resorts that have 1,002 rooms including 6 presidential suits. In order to expand the range of business, the company has established their sales and marketing office in countries like Germany, Hong Kong and Japan. The average occupancy rate of all resorts under the ownership of Villa Groups is estimated to be of 81.1% that is considered to be higher than the average of the respective industry in Maldives of 72% ("Overview - Villa - The Leading Business Initiative in Maldives", 2018). Over the past years of effective business operations across wide ranges of industry, the company has able to earn high asset values of $108.4 million dollars. This is believed to increase within the upcoming years due to the potential of the industry. The tourism department within the organization is believed to have diverse ranges of services that includes money transfer across all parts of the globe. All other types of service include that of medical package training that is considered to be one of the effective and integrated parts of the tourism service and industry. The Villa travel and tourism sector have an integrated partnership with that of the Malaysian Airlines, LAUDA air and Uzbekistan Airlines. The Cargo sales Agency of Kuwait Airways has also invested in the business partnership of Villa Travels ("Travel Services - Villa - The Leading Business Initiative in Maldives", 2018). All types of business partnership with all major international companies within the transportati on and communication industry, will help the Villa group to establish an influential business platform in the international market of travel tourism and transportation industry. According to Gabrielsson et al., (2017), it is highly essential for an organization to have multiple business unit partners at the international levels, which help them to expand the areas of their business operations in the different foreign nations. The diverse ranges of travel and tourism services along with that of the transportation and shipping business operations will provide the Villa group with the major potentials to enter the international market. There is also the sector of Broadcast and media, which will help the company to implement their marketing plan within the international domains. The company has their official channel that is aired in all countries along with that of the MediaNet ("Broadcast Media - Villa - The Leading Business Initiative in Maldives", 2018). The company has also acquired two major cable TV operators that includes CableNet and J-Sat Communications. This has helped the company to make use of the optical cable network, thereby increasing the area airing the local channels. The cost of international marketing is significantly reduced, which is believed to provide effective easy and cheap opportunity to explore the market within the foreign nation. There are also additional philanthropic activities of the company, which has helped to improve the social reputation of the company. The Villa Foundation was established by the management to ensure that all types of social welfare activities are being effectively carried out by the organizations, which also includes ensuring full protection of the local environment from all hazardous business activities ("Philanthropic Activities - Villa - The Leading Business Initiative in Maldives", 2018). This will help to easily establish their business within the international market and get permission from the environmental departments. Impact of business environment of Australia on the Villa Group As mentioned in the above sections, the Villa Group is planning to enter into the travel, tourism and transportation industry of Australia. In this context, it can be said as per the findings of Grant (2016), that it is essential to analyze the external business environment of the target market. This is necessary for the matter of implementing effective marketing plan to improve their market share in the target areas. Botha et al., (2014), have added that appropriate marketing tools are needed that can help them to analyze the political and economic factors along with the analysis of the competitive environment that can have major significant impact on the business operations. The PESTEL analysis tool will effectively help the management of Villa Group to collect necessary relevant information in the context of the business external environment in Australia. This will also help the company to track the changes that occur in the business environment of Australian Travel, tourism and transportation industry. In the context of the business environment in Australia, it can be said that the nation has witnessed operative levels of positive growths in all major sectors including that of mining, retail and wholesale and manufacturing sectors (Lamas Leite et al., 2017). Political: The stable democratic government in Australia is believed to have major impact on the business of all major companies. The company is believed to have implemented effective business laws alongside effective foreign policies that will help in the market entry of Villa groups. Hence, there is a positive environment within the nations that encourage high rates of foreign capital flow. The government also ensures that there is a healthy competition environment preventing all types if unethical business practices. Economic: The Australian economy is generally characterized by the stable nature, which is mainly possible due to the vibrant free capital market. The abundant amount of natural resources has resulted in the improvement of the manufacturing sector ("Australia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption", 2018). The skilled workforce within the nation will help the Villa Group in the process of recruitment and help in the process of providing effective customer service as a part of the travel and tourism business. The total valuation of the GDP of the nation is estimated to be about $1.1 Trillion, with the annual growth rate of 2.5% ("Australia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption", 2018). Currently, the economic value of the nation is considered even greater than nations like Germany and UK. Nevertheless, the disparity in the level of income is considered to be one of the major drawbacks of the Australian business environment . This will not allow the backward section of the Australian class to afford the expensive service of Villa Group. The marketing managers of Villa Group need to collect valuable market information from the economic databases and the Australian government websites. This will also help them to understand the changes that will occur within the external market environment thereby helping the company to identify the threats and opportunities that exist within the Australian consumer market. Social: The social factors like the culture, lifestyle and behavior of the local population has a significant impact on demand in the local market. For example, the exploring nature of the Australian society will generate high demand for the tourism and resort service. Whitty and Littlejohns (2015), have mentioned the importance of change within the society, which can have major impact on the level of business. Hence, the Villa Groups will have to collect information related to the changes within the Australian society. This will be done by collecting primary information from the surveys that are conducted within the chosen target market area. Technological Factors: The highly advanced technological infrastructure of Australia is believed to have effective impact on the business operations. The modern day business operations are believed to be highly dependent on the application of technology. This includes all types of business communication that is required for conducting the business operations and digital marketing activities. The latest advancement of the communication technology is believed to result in the nearly 10 million internet subscribers in all over Australia (Rubin et al., 2015). Environmental: For a company like the Villa Group, who are intending to penetrate the tourism market of Australia, it is essential for the company to implement essential environment conservation policies. This will help them to deal with essential environmental issues that include that of global warming. The tourism industry in Australia is currently at highly vulnerable position. The Environmental Protection Act of 1974, which is believed to have significant impact on the business policies that will be implemented by Villa Group. Legal: The legal system in Australia is based on the business policies that are implemented by the government. In this regards the management of the Villa Group, needs to understand the terms and conditions of each type of business laws. This will ensure that is no forms of violations of the laws that are being implemented within the consumer market. Hence, by applying the PESTEL analysis tool, it is possible for the company to explore the opportunities within the respective domains. This will help to ensure that all possible parameters within the external business environment are explored before the company decides to deal implement the final business policies. According to E. Dobbs (2014), Porters five force Analysis is assumed to be the essential marketing tools, which can help to analyze the competitive environment within a respective industry. It specifically helps to identify all types of threats and the sources for the following industry. The following are the five parameters of Porter's five force: Threats of Substitute Products or Services Currently, there is high demand for the tourism and travel service within the business environment of Australia. As the Villa Groups are planning to introduce the travel and transportation service, they will face lower levels of threats from the alternative services. Nevertheless, it is important for the management to deal with the issues related to the quality of the tourism services that are being provided by the company. Bargaining Power of Buyers Currently, there is tough competition within the tourism sectors of Australia. This is due to the presence of several numbers of companies within the sectors. Hence, the customers will have the option of choosing from wide range of brand of services. It is therefore essential for the Villa Groups to provide cost-effective services in both the tourism and transportation sectors. Moreover, as the Villa Groups are the new entrant in the respective sector, they have to offer attractive pricing to attract the customers. The Rivalry among existing competitors Being a new entrant in the travel and tourism industry, the Villa Groups has to face intense competitive challenge for the existing companies that includes Cosmos, Ultimate Travelers, Globus Tourism service and many more. The main competition is in the context of providing the best cost-effective services in the forms of resorts and transportation departments. Barriers to Entry This is one of major threat that will be faced by the Villa groups. Due to the intense competition within the travel, tourism and transportation services, the company has to invest high capital in the process of initiating the business in the respective domains. The lack of the communication channel is considered to be one of the major barriers challenges as the company will not be able to easily implement their marketing plan (Baker et al., 2015). Bargaining power of the suppliers Owing to the fact that the travel and tourism department of Australia has higher demand and opportunity the Villa Groups will face low threats due to the Bargaining power of the suppliers. It is also relevant to mention that the company will be able to recruit cheap labours from the local areas at cheap rates, which will help them to provide better quality of service. Figure: Porters Five Force Source (E. Dobbs 2014) Mode for Market Entry According to Ang et al., (2015), market entry strategy is a type of business planning, where an organization delivers new goods or service into a new target market. As the Villa Group has decided to enter into the Australian consumer market of tourism and travel sector, there are wide ranges of market entry strategy that can be implemented depending upon the particular business environment. It is essential for the company to properly assess each option. This will help them to understand the cost and the risks that are involved in each case. Laufs and Schwens (2014), have mentioned that importing or exporting a service is considered to be one of the major types of market entry strategy. Here, it is highly essential for the organization to manage business contract with the foreign Nation. Figure: Types of Entry Mode in International Market Source (Argyres et al., 2016) The exporting mode of marketing entry is popular within the international trade, where essential goods are produced in one Nation and then shipped to another country for their sales. This mode will not be effective for Villa Group as they are planning to introduce Travel Tourism and transportation service. Argyres et al., (2016), have mentioned about the market entry mode of franchising. Here, an independent business organization operates under the brand name of another company, which is called the franchisor. The main independent business organization, which controls the entire business operation is called the franchise. In this type of market entry mode, the franchise has to pay a certain fee to the franchisor which is decided within their business contract. In the given case, the Villa group is the franchise, which can operate their business through local franchisor in the Travel Tourism and transportation department of Australia. One of the major advantage in this type of market entry mode is due to the fact that the international company will be able to set up their business partnership with local suppliers in the respective domain. In other words, the franchisor can help the franchise to develop their market share in the newly targeted area (Badrinarayanan et al., 2016). The fran chisor also has the option to implement flexible business plan depending upon the performance of the franchise in the particular area. One of the major advantages of this franchise concept that can be adopted by the Villa group is that the company will have to take low level of financial risk. The headquarter of the company located in Maldives will have higher control over the business operation process in Australia. The local franchise will be able to provide detailed information about the external business environment in the Australian consumer market and the changes that occur within the tourism and travel sector. On the other hand, the major drawback all the franchise mode of market entry is due to the fact that the management of the Villa group at the headquarter of Maldives will be totally dependent upon the performance of franchisee in gaining market share within Australian tourism and travel industry. There is also high level of potential of business conflict with the local franchisee, which can according to the communication gap. Nevertheless, with the help of the franchise mode of market entry, it will be possible for the Villa group to establish new chain of resorts in all major tourist attraction sites of Australia. The shipping company will also be able to operate and transport materials across all the coasts in Australia. Marketing Mix According to Huang and Sarigll (2014), the marketing mix is considered to be a set of business operation tools, which is implemented by an organization to fulfil their respective business target. There are certain parameters within the marketing mix element, which can be altered by the business organization depending upon the level of demand market and the behavior of the target customer groups. It is essential to have a proper combination of all the major elements of the marketing mix strategy, which is believed to be one of the keys to improving market share within certain domain of business. Following are considered to be the major elements of marketing mix that will help the Villa Group to have proper control in the Australian market: Figure: 4Ps of Marketing Mix Source: (Datta et al., 2017) Product or Service: One of the primary aims of all business operation marketing is to explain the details of the features that a customer can expect after availing a product or service (Datta et al., 2017). The Villa group will offer premium quality of Travel Tourism service to the Australian consumer. The company will also introduce transportation services, which will help in shipping products across different parts of Australia. Price: The pricing is considered to be one of the essential elements of the marketing plan, which decides upon the value that will be paid by the customer will availing a product or service. The total amount of revenue that will be earned by the business organization will depend upon the pricing strategy (Helm Gritsch, 2014). In case of the Villa group, the company will implement economic pricing strategy, which will help them to gain significant competitive advantage with all the existing Travel Tourism and transportation brands in the Australian market. The pricing strategy for market penetration mainly includes offering extra discount to the customers, which will help them to establish a strong base in their respective industry. Place: The placement of the service and product is another essential component. The placement strategy helps to decide upon the supply channel that will be used for distribution of the product or service. It is essential to decide upon the distribution strategy depending upon the external business environment of the chosen target area (Davari Strutton, 2014). In the given case, the chosen place for service distribution of Villa Group is the consumer market of Australia. The company has decided to form partnership with local tourism distribution partner, who will form business partnership in the form of franchisee. The transportation service of the company will help in the matters of swift delivery of the products. Promotion: The Villa Group will depend on their media and broadcast segment of the business that will help them in the promotional services. They will be able to deliver essential message to the target customers. Hence, effective marketing communication is believed to be essential part of the promotion strategies. This can help the company to maintain effective relationship with the target customers. It will therefore possible to maintain high brand reputation in the market (Davcik Sharma, 2015). One of the effective ways that can be adopted for the better level of marketing communication is to implement the strategy of Segmentation, Targeting and Positioning (STP). This strategy will focus on analyzing the behavior of the target audience groups (Schlegelmilch, 2016). In the primary steps of the strategy, the target market group will be divided based on the choice and behavior of the customers. For example, for the Villa Group will target the tourism lover customers and the people, who mainly prefer the luxury resort service. Hence, the target market group of customers for the Villa Resorts mainly belongs to the richer section of the society and willing to spend huge amount on the luxury tours. The psychographic and demographic segmentation will be used by the company to target their respective customers. The travel and tourism lovers of Australia are considered to be one of the major target groups of the Villa Groups. The people in the age category of young and middle age are also included within the target groups. According to Choi and Kim (2015), it is important to analyze the future growth rate of the target segment groups that can help the company in deciding upon their future marketing strategies. The market size of each segment has to be analyzed separately that can help in the aspects of predicting the market size of the future. One of the most important aspects of the marketing plan is the element of brand positioning. This element helps to ensure that the brand will occupy a distinct position within the mind of the target customers. The companies may advertise the unique feature of their respective service or product that is needed to gain competitive advantage (Gengler Mulvey, 2017). For a new entrant like the Villa Group, essential marketing mix elements need to be introduced that will help them to capture a healthy position in the travel, tourism and transportation industry of Australia. Following are the steps that are considered essential in the context of the Villa Groups: Drafting of the position statement will help in the matter of deciding upon the fixed objectives of the company. Analyzing the strengths and weakness of each rival brand will help in analyzing the condition of the existing competitive environment. The Villa Group will highlight upon their unique features that will include providing premium and luxury resort service at much cheaper rates. The analytical data that will be collected from analyzing the business environment of Australia. Both quantitative and qualitative data will be required in the given context, which will use primary and secondary sources related to the consumer market in Australia. Conclusion The Villa Groups being the largest Conglomerate company in Maldives currently have the potential to enter the international market. It is therefore possible, to introduce their services of travel, tourism and transportation in the respective domain of Australia. The PESTEL analysis tool suggests that the economic, political and social environment of Australia is suitable for foreign investment. The Porters five force analysis has helped to analyze the fact that threats from the rivals are the biggest challenge that will be faced by Villa Groups as they plan to enter the market of Australia. The franchise mode of market entry is considered to be essential and appropriate in the given context as it will help the Villa Groups to launch their service with minimum financial risks. The company will also be able to form business partnership with all local tourism agents, who will act as the franchise for the Villa Groups. In the context of the tool of marketing mix, the company will imply the tool of economic and competitive pricing strategy. This will be essential in gaining significant market share. With the STP tool, the company will be able to have a healthy market position and target the tourism lovers of Australia. Following are the recommendations for Villa Groups: Make use of the all latest forms of government database, which will help in the matters of collecting relevant information about the external business environment. Online survey needs to be conducted that will help to understand the needs of the Australian customers within the following domain (Hulland et al., 2018). Effective competitor analysis will help in the matters of dealing with market entry modes. Extra discounts are needed to attract new customers and retain the same for the better market share. References Ang, S. H., Benischke, M. H., Doh, J. P. (2015). The interactions of institutions on foreign market entry mode. Strategic Management Journal, 36(10), 1536-1553. Argyres, N., Bercovitz, J., Zanarone, G. (2016). The Role of Relational Contracts in Inter-Firm Relationships: Theory and Evidence on Multiunit Franchising. Australia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. (2018).Heritage.org. Retrieved 16 January 2018, from https://www.heritage.org/index/country/australia Badrinarayanan, V., Suh, T., Kim, K. M. (2016). Brand resonance in franchising relationships: A franchisee-based perspective. Journal of Business Research, 69(10), 3943-3950. Baker, W. E., Grinstein, A., Harmancioglu, N. (2015). The Role of Entrepreneurial Orientation in Overcoming Known and Unknown Barriers to Entry in Foreign Markets. In Proceedings of the 2010 Academy of Marketing Science (AMS) Annual Conference (pp. 97-97). Springer, Cham. Botha, A., Kourie, D., Snyman, R. (2014). Coping with continuous change in the business environment: Knowledge management and knowledge management technology. Elsevier. Broadcast Media - Villa - The Leading Business Initiative in Maldives. (2018).Villa.mv. Retrieved 16 January 2018, from https://www.villa.mv/industries/media.html Choi, C. S., Kim, K. H. (2015, June). MARKETING MANAGEMENT IN SOCIAL NETWORK PLATFORMS: SEGMENTATION, TARGETING, AND POSITIONING. In 2015 Global Fashion Management Conference at Florence (pp. 97-102). Datta, H., Ailawadi, K. L., van Heerde, H. J. (2017). How Well Does Consumer-Based Brand Equity Align with Sales-Based Brand Equity and Marketing-Mix Response?. Journal of Marketing, 81(3), 1-20. Davari, A., Strutton, D. (2014). Marketing mix strategies for closing the gap between green consumers' pro-environmental beliefs and behaviors. Journal of Strategic Marketing, 22(7), 563-586. Davcik, N. S., Sharma, P. (2015). Impact of product differentiation, marketing investments and brand equity on pricing strategies: A brand level investigation. European Journal of Marketing, 49(5/6), 760-781.Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45. Gabrielsson, P., Gabrielsson, M., Sinha, P. N. (2017, January). International Market Entry Opportunity Related Processes of Young Entrepreneurial Firms. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 13442). Academy of Management. Gengler, C. E., Mulvey, M. S. (2017). Planning pre-launch positioning: Segmentation via willingness-to-pay and means-end brand differentiators. Journal of Brand Management, 24(3), 230-249. Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley Sons. Helm, R., Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets. International Business Review, 23(2), 418-428. Huang, R., Sarigll, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York. Hulland, J., Baumgartner, H., Smith, K. M. (2018). Marketing survey research best practices: evidence and recommendations from a review of JAMS articles. Journal of the Academy of Marketing Science, 46(1), 92-108. Lamas Leite, J. G., de Brito Mello, L. C. B., Longo, O. C., Cruz, E. P. (2017). Using Analytic Hierarchy Process to Optimize PESTEL Scenario Analysis Tool in Huge Construction Projects. In Applied Mechanics and Materials (Vol. 865, pp. 707-712). Trans Tech Publications. Laufs, K., Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), 1109-1126. Overview - Villa - The Leading Business Initiative in Maldives. (2018).Villa.mv. Retrieved 16 January 2018, from https://www.villa.mv/about-us/overviews.html Philanthropic Activities - Villa - The Leading Business Initiative in Maldives. (2018).Villa.mv. Retrieved 16 January 2018, from https://www.villa.mv/philanthropy.html Rubin, T. H., Aas, T. H., Stead, A. (2015). Knowledge flow in technological business incubators: evidence from Australia and Israel. Technovation, 41, 11-24. Schlegelmilch, B. B. (2016). Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy (pp. 63-82). Springer International Publishing. Travel Services - Villa - The Leading Business Initiative in Maldives. (2018).Villa.mv. Retrieved 16 January 2018, from https://www.villa.mv/industries/travels.html Whitty, J. A., Littlejohns, P. (2015). Social values and health priority setting in Australia: an analysis applied to the context of health technology assessment. Health Policy, 119(2), 127-136.