Maldives Business Venture Analysis

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This assignment requires an analysis of Villa, a leading business initiative in the Maldives. Students must examine Villa's various business ventures, paying particular attention to their market entry strategies into different sectors like tourism and travel services. The analysis should also consider the marketing mix (product, price, place, promotion) employed by Villa and identify potential growth opportunities within the Maldivian market.
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Running head: INTERNATIONAL MARKETING
International Marketing
Name of the Student
Name of the University
Author Notes
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Executive Summary
The current report is about the marketing plan of the Villa Groups, which is Maldives based
Conglomerate company. The firm is currently planning to analyze the business environment in
Australia and decide upon their marketing strategies. The report will highlight upon the market
entry modes that are needed to deal with the issues related with that of Australia. Proper
marketing mix theory also will be used for the same purpose that will help in deciding upon the
pricing and promotional strategies.
In the concluding note, there will be relevant recommendations that can be implemented by the
company to establish effective marketing strategies.
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Table of Contents
Introduction......................................................................................................................................2
Potential of Villa Group to Enter the International Market.............................................................3
Impact of business environment of Australia on the Villa Group...................................................5
Mode for Market Entry..................................................................................................................10
Marketing Mix...............................................................................................................................12
Conclusion and Recommendations................................................................................................16
References......................................................................................................................................18
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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 nations are located including the cities of
Sydney, Melbourne and Canberra.
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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 Porter’s 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
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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 transportation 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
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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
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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
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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
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parameters within the external business environment are explored before the company decides to
deal implement the final business policies.
According to E. Dobbs (2014), Porter’s 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
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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.
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Figure: Porter’s 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
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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
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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 franchisor 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 Sarigöllü (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
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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.
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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).
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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:
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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 and Recommendations
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 Porter’s 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
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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.
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