Market Entry Strategic Report
Added on 2020-04-13
11 Pages2795 Words140 Views
Running Head: MARKET ENTRY STRATEGY REPORTMarket Entry Strategy Report<Name><University>
MARKET ENTRY STRATEGY REPORT2Market Entry Strategic ReportExecutive summaryFor every company to increase its income growth must be embraced and for growth tobe achieved different things within the company need to grow. Expansion entails the venturing of the business into new markets so as to increase the market cover of the company. Vodafone is one of the leading telecommunication companies in Australia and intends to capture more market by expanding into other countries within Asia and Europe. For this to happen a market strategic report is needed which helps understand the markets of these other areas and help in the evaluation of the company’s chances to success in those market. This report conducts an extensive research on the two markets specifically between China in Asia and German in Europe and this will help the management in picking the best country for the company to set up its new branches. IntroductionVodafone is an Australia is an Australian telecommunication company that provides both mobile and fixed broadband services to the customers. This is one leading markets in theindustry and most of the companies within the market have been significantly expanding internationally. Within Australia, Vodafone provides services to over 22 million Australians, this shows the significant market share the company has. This has led to the need for international expansion of the company to the other regions around the world. For this case two countries have been selected for analysis which is the best pick for the company to adventure into. China and Germany are the company’s pics hence the need for an extensive research to identify which is the best pick for the company to advance into. Both countries being among the worlds developed countries, Vodafone’s research needs to be extremely exhaustive since this means the company’s choice will determine whether the expansion or
MARKET ENTRY STRATEGY REPORT3growth will impact its revenue (Zhou, 2017). The main reason for companies to venture into new markets is usually to increase their customer base and provide their services or products to more people hence in return increase the company’s income. But incase a wrong decision or strategy is taken during the expansion, this means the company incurs losses or slow returns from the growth venture. The report will cover different areas these includes the discussion section which will cover the macro environment and the geo political forces impacting each country that may affect Vodafone’s venture in the country, the business policies in both countries, the potential dangers, risks and opportunities in each country, conclusion and finally a recommendation of the best pick for Vodafone. DiscussionChinaChina is an Asian country which is among the leading companies with its rapidly growing economy. Most of the global companies have been investing and opening their multinational companies in the country due to multiple reasons such as the availability of resources and labour in the country. For Vodafone it is important to analyze different aspects with the country that would favour the company’s success in the country (Zhou, 2017).The current macro-environmental and geo-politicalforces in the countryMacro-environment forces can be defined as the external or uncontrollable factors that influence an organization’s decisions and end up affecting the performance and strategies of the company. These factors include legal policies in the country, political, social conditions and economic factors, natural forces and technological changes of the country (Toppinen, et al., 2014). On the other hand, geo-politic factors can be defined as the topographic, demographic factors, the natural resources factors that would affect the expansion of Vodafone into the country. In china there are multiple macro environmental and geo- political
MARKET ENTRY STRATEGY REPORT4factors that would affect the expansion of Vodafone into the county, these factors are discussed below:1.Red TapeIn china many of the administrative and bureaucratic tasks that have been significantly simplified in western countries are yet to be simplified in the country. This can simply fall under the macro-environmental factor that would affect the expansion of Vodafone in china, these processes in the china take an exaggerated amount of time to be accomplished. Research by (Zhou, 2017), shows that minor processes as seen in the western countries such as company legal registration in the country would take a month or more before they can be accomplished. The country lacks strong legal policies as well as inconsistent application of regulations which implies the processes of first establishing the company in the country are not well designed for international company’s convenience. For the company to successfully have its operations ready and running in china, an administrative office needs to be in place to handle the tedious company’s paper work (Zhou, 2017).Regulatory EnvironmentIn china, the national government enforces rules and policies that are aimed at favoring state entities at the expense o the privately held firms where Vodafone comes in. Such polices are detrimental to initiatives that aim to attract foreign companies from expanding in to the country. Excessive regulations tend to hinder economic activities and entrepreneurial activities in the county since they lead to excessive expenses for the business (Allen, 2017). This seems as a major issue of concern for the company intending to expand in to china due to the excessive policies within the country. Some few examples of these include, the mandatory joint venture partnership in the country. The policy stipulates that the foreign investor or business is expected to have a Chinese government agency or local company as a
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