Project Outline University of Canberra Report 2022

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PROJECT OUTLINE
Asia Pacific Business (PG)
Student Id:
University of Canberra
Introduction
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Globalization has helped many economies of the world to grow. It has helped the economy in
improving economic and financial management, strengthening law and justice while also
uplifting effectiveness in the public sector. Thus, Australia’s domestic market gained from
trading with other countries. Many Australian corporations have entered foreign markets and
earned profits from international exposure. One of the corporations named Globe
international (established in 1985) is an Australian retail firm that produces boots, shoes, and
skateboards. It has headquarters globally that include Australia, the UK, the USA, and China.
Globe international had launched its electric skateboard brand named Dots Boards that it
wanted to introduce in markets of New Zealand and Indonesia. Thus, this reports analyze the
market entry strategies for Dots Boards in New Zealand and Indonesia. Entering the two
possible economies along with two possible modes of establishing presence there has been
evaluated. Then the merits of these possibilities along with certain recommendations are
provided. Then finally decision regarding prioritising means of preferable entry with reasons
have been outlined.
Market Entry
Dots Boards is an electric skateboard brand that provides its customers with security and
enjoyable alternative for daily travel. Globe international plans to widen its international
exposure by entering the markets of New Zealand and Indonesia. Moreover,
internationalization helps many corporations to build their brand image in foreign markets.
This helps the firm in gaining a foreign customer base and higher brand value (Nagel, 2012).
A foreign company brings along with it specialization and technical expertise in the host
country. It also helps in raising the employment rate of the domestic country (Glowik, 2016).
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Many countries use different forms like franchising, acquisitions, mergers, partnerships to
enter foreign markets.
Indonesia and it is Market
Indonesia is the world's fourth most populated nation that also has good economic and
political stability (TMF Group, 2019). The market economy offers huge investments for
domestic and foreign companies. The economic growth of the nation is more than 6%, the
Indonesian government had planned to reach foreign investments at US$222 trillion (TMF
Group, 2019). Thus, the government took may steps like amending the investment law
providing equal treatment to all its investors. Taxation and licensing policies were amended
to attract foreign investors (World Bank Group, 2020). The economy is liberal for
establishing branches, representatives or Indonesian limited liability firms (PWC, 2012).
Furthermore, Indonesia is a rapidly growing economy but public transportation has been a
major issue in small as well as big cities like Jakarta (PWC, 2012). The subways that were
planned 30 years ago are still undergoing construction so the traffic in business hours is a
constant problem (Data Spring, 2017 ). The introduction of electric skateboards will suffice
nearby commuters. The working population and children living near their offices, schools can
commute to their destinations without facing the traffic. Thus, Dots Boards can easily enter
the Indonesian market through franchising.
The company will enter the Indonesian market through Franchising mode. In this regard,
franchising is a contractual market entry through which the firm enters a foreign market with
lower risk and resources. This contractual relationship, the operations are interdependent and
the franchisor earns higher profits than the franchisee (Brown, Dady, Gardner, and Haff,
2013, p 120). In this form of market entry, the franchisee utilizes his business capital to set up
the business (Webber, 2012). The investments of the franchisee will be the capital infusion
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for running the business of Dot Boards. Therefore, through franchising its products in the
Indonesian market, Dots Boards will experience faster growth and a huge customer base.
It is highly suggested to the board of directors that Dots Boards should enter the market of
Indonesia through the Franchising form of business. The economy of Indonesia has ample
investors that can help Dot Boards in expansion. The market economy will give profits
owning to the problems of the daily commute of the population. The board is suggested to
acknowledge the franchising will help Dot Boards to cope up with local partners while also
align the products following local habits of Indonesia. It is recommended that Dots Boards
should target population aged from 14 years to 35 years of age. This product will be
beneficial to the school children as this will help them to reach their institutions faster than
public transport. The product will suffice the needs of sports-loving individuals.
New Zealand and it's Market
New Zealand is the economy with a stable democratic and political system. It has a strong
judiciary and has an abundant supply of natural resources. The economy has an open market,
free-floating currency and lesser limitations on foreign investors (PWC, 2018). It ranks 53rd
in the global state economy and majorly focuses on foreign exchange with countries like
Australia, the USA, China, Japan and the UK. The economy is dominated by high-income
earners that contribute to its economic success. New Zealand had been listed best company
for commencing business by Forbes. The economy has built international relationships with
trading partners and while concluded free trade agreements with WTO members (PWC,
2018). Furthermore, many of the successful sports stars belong to this nation. Thus, it can be
said production and manufacturing of sports goods will be a beneficiary venture for Dot
Boards. The country's interest in sports has won many medals and a world championship
(New Zealand Govt, 2020). Thus the market for sports goods is high as both the genders are
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equally participative in sports and athletics. It is also noticed that the economy does not have
many competitors for electric skateboards. Thus, it can be easily identified that Dot Boards
can earn high profits as well as brand awareness through this international venture.
The business of Dot Boards will enter the market of New Zealand through partnerships and
strategic alliances. Strategic alliances include contractual agreement among two or more
partners that will collectively work for meeting common goals. Partnerships with domestic
firms help in understanding the local market structure (Hirst, and Thompson, 2019, p120). In
this view, Globe International is an international brand and can provide high expertise to its
local subsidiary. Partnership and the strategic alliance will enable Dot Boards to reach its
targeted customers and also earn reputation in this new market.
The Board of directors of Globe International is highly suggested to enter the market of New
Zealand for Dot Boards. The company is advised to exploit the foreign market with a
partnership form of market entry mode. This entry mode will help the firm gaining
knowledge of the local market and hence, helping to establish faster (Potrafke, 2015, p 512).
This will also have significantly lower cost bearing for the company. Though markets in
Indonesia have larger capabilities in terms of consumers, but the market is not mature for
such kinds of products. There will be lower rates of acceptance for such products in the
Indonesian markets hence it is recommended that the company focuses on New Zealand
markets first. Moreover, New Zealand is a country that is closer to Australia, and have
cultural framework similar to that present in Australia. To promote the product in the region,
the board is also suggested to provide sponsorships to the school children so that Dot Boards
get faster exposure among the younger generations. The sponsorships will help to promote
skateboards sports that will further enhance the market for Dot Boards. It is also suggested
that Dot Boards should target young individuals aged 13- 30. This product should be
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promoted in different sports institutions. Dot Boards should enter New Zealand as it is the
emerging market for electric skateboards.
Conclusion
In conclusion, the current situation of the company is planning to expand to capture global
markets. However, firms need to analyze the market environment before establishing
business units in the foreign economy. This report helps to understand the market entry mode
for Dot Boards in the international markets of New Zealand and Indonesia. The advantages of
both these economies as well as the entry modes are discussed in detail. New Zealand and
Indonesia are emerging markets and thus, the market entry will be a profitable venture for
Globe International. The company needs to focus on New Zealand for its business expansion
as against Indonesia, this will provide greater revenue earning capability for the company.
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Reference List
Brown, H., Dady, J.M., Gardner, R.K. and Haff, J.S., 2013. Franchising: Realities and
Remedies, Forms Volume. Law Journal Press, pp. 20-210.
Data Spring, 2017. Growth brings transportation issues in Indonesia: Eye on Asia. [online]
Available at:< https://www.d8aspring.com/eye-on-asia/growth-brings-transportation-issues-
in-indonesia > [ Accessed 6 Apr. 2020].
Glowik, M., 2016. Market Entry Strategies: Internationalization Theories, Concepts, and
Cases of Asian High-Technology Firms: Haier, Hon Hai Precision, Lenovo, LG Electronics,
Panasonic, Samsung, Sharp, Sony, TCL, Xiaomi. Walter de Gruyter GmbH & Co KG.
Hirst, P. and Thompson, G., 2019. The future of globalisation. In The Handbook of
Globalisation, Third Edition. Edward Elgar Publishing, pp 5-52.
Nagel, C., 2012. Global Market Entry. Xlibris Corporation.
New Zealand Govt, 2020. Sports. [online] Available at:<
https://www.newzealandnow.govt.nz/living-in-nz/recreation/sports > [ Accessed 6 Apr.
2020].
Potrafke, N., 2015. The evidence on globalisation. The World Economy, 38(3), pp.509-552.
PWC, 2012. Doing business in Indonesia. [online] Available at:<
https://www.pwc.de/de/internationale-maerkte/doing-business-in-indonesia.pdf > [ Accessed
6 Apr. 2020].
PWC, 2018. Doing business in New Zealand. [online] Available at:<
https://www.pwc.co.nz/pdfs/2018pdfs/doing-business-in-new-zealand.pdf > [ Accessed 6
Apr. 2020].
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TMF Group, 2019. Top 10 challenges of doing business in Indonesia. [online] Available at:<
https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-indonesia/ >
[ Accessed 6 Apr. 2020].
Webber, R., 2012. An introduction to franchising. Macmillan International Higher Education.
World Bank Group, 2020. Doing Business in Indonesia. [online] Available at:<
https://www.doingbusiness.org/content/dam/doingBusiness/country/i/indonesia/IDN.pdf >
[ Accessed 6 Apr. 2020].
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