This report is based on the aspect that a firm name Jay-car electronic Australian based Retail Company is planning to expand its market at international level in Asian country name India.
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International Business Plan 1
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Executive Summary This report is based on the aspect that a firm name Jay-car electronic Australian based Retail Company is planning to expand its market at international level in Asian country name India. In order to carry out this report first brief background of selected firm and selected international Asian country is being explained. After this different competitive strategy analysis techniques have also being discussed such as cost focus, differentiation, cost leadership etc. It was being recommended that for Jay- car firm differentiation strategy would term to be best. In addition to all this certain additional analysis were also done which specified that firm should focus on implementing customer centric focused approach so as to attract more customers. Beside this different types of market entry option like contracting, joint venture, licensing, franchising etc. were also discussed in this report. After discussion of types of market entry option it was recommended that for Jay-car firm joint venture entry technique will prove to be beneficial. Lastly certain international HRM issues were also being explained such as cultural diversity etc. 2
Table of Contents Executive Summary.........................................................................................................................2 Table of Contents.............................................................................................................................3 Introduction to the report.................................................................................................................4 Main body........................................................................................................................................4 Brief background of the company and selected international country...........................4 Conclusion of SWOT analysis from Assessment 2............................................................6 Additional analysis reflecting further country analysis....................................................7 Competitive strategy analysis (products and services).....................................................7 Market entry option analysis and preferred option recommendation............................9 Marketing and R&D consideration (including competitive strategy)...........................11 Recommendation regarding production..........................................................................11 International HRM issues and considerations.................................................................12 Conclusion.....................................................................................................................................13 References......................................................................................................................................14 3
Introduction to the report In order to achieve a sustainable growth and to remain for long time period in market it is very much essential for every business organisation to carry out certain different types of analysis such as market analysis, competitive analysis, which entry option would be more suitable to enter in international market etc. Therefore in this report to a brief explanation is being given regarding the selected company background name Jaycar Electronics. This firm is planning to expand its business plan at an international level in a selected Asian country name India. In addition to this short conclusion of SWOT analysis which was done in assessment two is also being explained as well as some additional analysis reflecting further country analysis is also being done. Beside this most important of allcompetitive strategy analysis will also be analysed along with the analysis of different market entry option and certain recommendation will also being given in respect of best suitable market entry option for Jaycar company to enter in international market in India. Furthermore, recommendation regarding production improvement will also be examined as well as explanation about certain international HRM issues and consideration will also be done in this given below report. Main body Brief background of the company and selected international country Background of Jaycar Company:Jaycar is one of the electronic Australian based retail companies which is generally related to products of electronics enthusiasts (Neelankavil, 2015). Basically this firm was founded by Gary Johnston in 1981. Nearly it has around more than 200 authorised agents and stockist as well as around 100 stores in all over New Zealand and Australia which carry out its products from Jaycar Electus Distribution wholesale division. In addition to this there works near about 1000 number of employees who give their best to an organisation so as to achieve the target goals and objectives on time that is to render best and high quality products and services to its target customers. In addition to all this Gary Johnston who is the founder of Jay-car electronics was a former employee of Dick Smith electronics who had made purchase of John Carr & Co Pty Ltd.Additionally, this company even has its own subsidiary name Electronics Distributors which is situated in Australia and New Zealand. In order to make customers aware about its presence in market it has its own attractive websites that iswww.jaycar.com.in. Countries in which Jay-car has its presence are (Neelankavil, 2015): United Kingdom Australia 4
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New Zealand Canada United states of America Different types of products and services it deals with are given below: Gadgets Cable connection Security and Surveillance Tools and Test Equipment Computing Components and electro technical Semiconductors Batteries and chargers Power supplies Alarm system Solar & Lighting Bluetooth audio Car cameras IT accessories After carrying outs its business in the above mentioned country the firm showed a huge success in the form of increment in its revenue and profit margin (Marella, 2014). Thus, this success has urged the Jay-car company to expand its business at an international level in Asia country name India. Beside this there exist many other Asian countries like Canada. Japan, Indonesia etc. But for Jay-car organisation Indian Asian market would prove to be beneficial and would helpful in achieving and capturing more of market share profit. This is so because India is considered to be one of the largest economics in all over the world. Indian electronics market is known for its innovative ideas. Beside this as per IBEF report Indian market 5
will reach over US$ 48.37 billion by 2022. Additionally, it is also being estimated that as per IBEF report there will be approx. 9% cumulative annual growth by the end of 2022 which is said to be equal to US$ 48.37 billion (Tounés, Lassas-Clerc & Fayolle, 2014). Thus, it can be said that Indian market will result in tremendous growth for Jay-car Australian Electronics Company. Conclusion of SWOT analysis from Assessment 2 As in assessment two SWOT analysis of Jay-car organisation were done so as to identify the firm strength, weakness, opportunities and threats. This technique is said to be one of the best analysis technique with the help of which company can easily get to know what all are their strength and what all are their main weakness, so that weakness can be converted into major strength of firm on right time. Beside this firm can also easily get to know what all are the opportunities which a firm can avail to exist in market for long period of time and to achieve competitive advantage in marketplace (Pretorius & Rosslyn, 2014).Most important of all an organisation can also acknowledge about the major threats which can hamper the firm profitability margin, so that on time effective strategies can be made and implemented to overcome threats. Therefore in assessment two it can be concluded that SWOT analysis were done by the management of Jay-car firm and was founded that a firm is considered to be one of the strongest and most trustful electronics brand in all over Australia and even it is well known for its diversified product line which is considered to be the major strengths of firm. This major strength of organisation has urged the firm to expand its business in India as well. Secondly firm has also identified it major weakness which has limited its market share that is it lack in manufacturing mobile phones which are more demandable now a days. Thirdly as an opportunity it was being founded that company can even start manufacturing mobiles phone with new innovative ideas and apps in phones (Gabler, et. al., 2017). This will help firm to capture larger part of market share in all over the world. Whereas major threat which were identified by management of Jay-car firm is that customers preferences keeps on changing which can result in down fall of profit margin. So firm should focus on making continuous investment in its customer research so that changes in customers preferences can be acknowledge from time to time and will automatically help in overcoming the threat even. Beside all this other opportunities like firm can adopt the practice of inculcating and implementation of innovative ideas in marketplace from to time as well as can come up with latest upgraded technology which can result firm to come up with superior and latest quality products in marketplace as per customers preferences. Additionally firm also faces from other major threat that there exist large number of Jay-car firm competitors in market place such as Panasonic, L.G. Philips etc. So firm should also ensure that their strategies and policies are better than its competitors as this will help firm to achieve its highest level of sustainable growth in marketplace. 6
Additional analysis reflecting further country analysis It was being founded that in India for every organisation employees are considered to be the backbone of firm as they help firm to achieve their target goals by rendering their hard work for firm. So it is very much crucial for Jay-car firm to keep employees satisfied by rendering them promotion for best performance, rendering them appreciation from time to time, compensation, bonus, incentives etc. if the firm wants to expand their business in India. Beside this it was also being analysed that firm should also follows certain legal rules and regulation like should not make use of those technology which can result in more of pollution. In addition to this management of Jay-car should also use customer centric focus approach so as to keep customers preferences at first not just simply on production process (Bossman, et. al., 2014). This is so because in modern world most organisation take customer preferences into consideration before starting its production process because in case if the firm will not produce product as per customer choices than it would result in downfall of profitability margin ratio, as no customer would like to make purchase of those products which are not as per customer preferences. For example now a days in India mostly customer prefer those solar system which will reduce electricity bills and would result in low maintenance cost, so if the firm will take customers preferences into consideration while producing solar electric product then it would result in increment in the profitability margin of firm as customer will make more of purchase of such products which are made as per their preferences. Thus, adoption of customer centric focused approach will help management of Jay-car to achieve its larger part of market share in India as well as compared to its competitors. Competitive strategy analysis (products and services) In order to achieve a sustainable growth it is very much essential for the management of Jay-car firm to analyse which types of competitive strategy would prove to be beneficial for firm while expanding its business at an international level in one of the Asian country name India.As per Porter’s competitive strategy analysis there exist four different types o strategy which a firm can adopt and they are namely cost leadership strategy, differentiation strategy, cost focus strategy and differentiation focus strategy (Demil, et. al., 2015). 7
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Figure1Porter's competitive strategy analysis Source:Porter’s competitive strategic analysis, 2019 Cost leadership strategy:It is a type of strategy which is being used by firm when the firm wants to target broad market and larger demands by offering lowest possible price. In this case there exist two options for firm and they are first either the firm will keep cost as low as possible or it will possess larger market share with average prices. Thus, in both cases an organisation cost will term to be low as possible and this strategy is being applied when a firm have enough of investment capital at their disposal and efficient logistics. Differentiation strategy:It is a strategy which is being used by those organisations when they target broad market and high demand by coming up with some kind of uniqueness in its products and services as compared to its competitors. Implementation of this strategy will require efficient and good research and development practice, innovation and the ability to render good and superior quality products and services. Costs focus strategy:It is another competitive strategy analysis techniques which is being used by firm to target niche market segment by offering lowest possible prices. Differentiation focuses strategy:As per this strategy an organisation target for niche market segment by ensuring that its product and services are term to be unique in marketplace. This is so because this strategy involves strong brand loyalty among customers. So it is very much crucial for firm using this strategy to ensure that the product and services it render consist of unique features as it will help firm to stay ahead of possible competition. 8
Recommendation: Thus, after identifying the types of competitive strategy analysis’ it can be recommended that the management of Jay-car Australian Electronics Company must adopt the differentiation strategy while expanding its market in Asian country name India. This is so because in India mostly customers prefer to make purchase of those products which possess certain unique features and are of superior quality as compared to other products in market.Thus, it will help firm to attract more customer and which will indirectly result in capturing of larger market share of India(Bhagavatula, 2015). Market entry option analysis and preferred option recommendation Market entry option is defined as the techniques with the help of which firm can easily capture large market share at an international level also. There exist different types of market entry option like joint venture; contracting, licensing, franchising, direct export; indirect export; manufacturing abroad etc. and each of them are being explained below (Gopal, Smith & Steinbach, 2014): Figure2Market entry option Source: Market entry option, 2019 Direct export:As per this strategy a firm produces their products in their home country itself and after that sell it to overseas customers. 9
Indirect export:As per this strategy a firm sell out their final products to third parties who then sell it within its foreign market. Licensing:It is one of the market entry option which is considered to be less risky. This is so because here the licensor render permission or it can be said license to a firm in foreign market to produce products by using it brand name so that in return the firm can get royalty payment. Franchising:It is the other form of licensing. As per this entry option a firm put together the entire ingredient which has helped firm to be successful in its home country and after that franchise its package to successful investors in overseas. Joint venture:It is the a types of market entry option where two or more companies comes together so as to operate in host country and to share the market entry risk as well in foreign market. Beside this the two companies commonly share expertise knowledge, skill, technology, capital, labour etc so as to capture larger market share and will also commonly share profit and loss equally as per the ratio of investment done by each one of the party. Contracting:It is the another form of market entry option which consist of exchange of ideas from one organisation to another through contracting so that product can be produced on the behalf of manufacturer of the product. Thus this method help firm to reduce cost of exporting from foreign market. Manufacturingabroad:Itisatypeofentrymodewhereanorganisationplantoestablishits manufacturing plant in its host country because government of host country render some kind of tax advantage because they even wish to attract inward investment so as to generate employment opportunities for their economy. Recommendation After analysing the different types of market entry option it can be recommended that management of Jay- car Australian Electronic Company must take joint venture entry option into consideration so as to enter in Asian international market that is in India (Morgan, 2015). This is so because this option is considered to be one of the best option as it will reduce the burden which could have taken place if the firm alone would have enter in international market. As with the help of joint venture both the firm will equally liable for profit, loss, eradicates the risk of discrimination, sharing of capital, labour, modern technology, updated skills, knowledge etc. 10
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Marketing and R&D consideration (including competitive strategy) Marketing is considered to be one of the crucial foundations for every business organisations. This is so because it is said to be the set of process and institutions which are used for creating, communicating, delivering and exchanging offering best valuable services, products to customers (Hair Jr, et. al., 2015). In return the seller gets money which the customers render for making purchase of product which renders them satisfactory level of value. In simple term it can be said that it is a techniques which is being used by firm in order to attract and influence large number of target customers to make purchase of their products and services like by advertising through banners, pamphlets, TV, radio, books, journals, magazines etc. It’s only because of effective marketing strategies small and medium enterprises are turning global now a day’s within a short period of time. Once the management of Jay-car gets a palpable picture of marketing then the firm should focus on research and development activities which is being carries out by firm either to innovate new process in business or to investigate the strategies, polices and techniques used by competitors as well as to analysis the changes taking place in customer’s preferences. In addition to this in order to analyse and identify the best competitive strategy technique also firm have to make investment in research and development activities, as through research and development itself firm can get to know what types of product the customer demand for, what type of cost should the firm implement upon its products by analysing the competitors pricing strategy etc. For example, after research and development analysis it was being identified by management of Jay-car firm that its competitors Panasonic electric firm uses offline method of marketing such as books, magazines, newspaper etc. and adopts skimming pricing strategy (high price of products) to attract customer of high class people. So by acknowledging this aspect management of Jay-car organisation can adopts the penetration pricing strategy and can used both offline and online methods of marketing such as social media like Facebook, instagram, twitter etc. so as to stay competitive in such a competitive business environment. It can be said the both marketing and research and development aspect must be considered appropriately before coming up with final product and services in market. Thus, it can be concluded that it will help firm to achieve sustainable competitive advantage in marketplace. Recommendation regarding production The term production is defined as the process which starts right from purchase of raw materials and end up with delivering of final product to customers. Therefore in order to stay competitive in market place certain recommendations are being given below to Jay-car firm in respect of production process (Simón- Moya & Revuelto-Taboada, 2016). So firstly, it can be recommended that during production process management of Jay-car firm must ensure that employees make optimum utilization of its resources so that cost of production process 11
gets minimized. This is so because in case if the production cost gets increased then it will lead in the increase in the product price as production cost will be charges from customers. Thus, high price product will be less purchased by customers, which will result in downfall of profitability margin. Secondly it can be recommended that management of Jay-car must ensure that they make use of modern technology in order to produce best and superior quality products as used of old technology can result in downfall of the quality of product which will result in decrease in the profitability margin level. International HRM issues and considerations While operating business at international level in India it is very much crucial for management of Jay-car firm to understand and take into consideration several issues which a firm might face and some of them are mentioned below (Burns, 2016): Cultural diversity:Every nation has their own cultural aspects in respect of tradition, religion, etc. as it varies country to country, so it is very much crucial for management of Jay-car firm to hire Indian employees within their organisation so that it becomes easy for firm o understand different perspective and preferences of customers. Benefits and compensation: As this two aspect are considered to be the backbone of HR strategy but at global level in order o focus on work life balance of employees it is very much crucial to understand the preferences required by employees in respect of benefits and compensation so that each one can equally balance their personal and professional lives. It is one of the international HRM issues which Jay-car firm might face so it is very much crucial for firm to keep their employees satisfied both ate professional and personal level. This is so because most of the multinational firms have implemented programs such a extended holiday, paternity leave, flexible working time period etc. 12
Conclusion From the above report overall it can be concluded that this report is based on the expansion of business at international level. As per this report Jay-car Australian electrical company is planning to expand up its business in Asian country name India. So in this report competitive strategy analysis has being done as well as different types of market entry modes have been discussed and certain best recommendation has also being given to firm so that firm can achieve greater advantage at internal level. Lastly two major internal HRM issue are being discussed and they are namely cultural diversity, befits and compensation etc. 13
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