Intecol's Peruvian Market Expansion: A Joint Venture Strategy Project

This project examines Intecol, a Colombian company, and its potential expansion into the Peruvian market. The research focuses on a joint venture strategy, considering Intecol's small size and capital limitations. The project includes an overview of Intecol's operations, a literature review covering the Ansoff matrix, Porter's generic strategies, and Bowman's Strategic Clock, and an analysis of the Peruvian market's economic and industrial sectors. The methodology involves qualitative research with a deductive and interpretivist approach, including semi-structured interviews with Intecol's managerial department. The goal is to provide recommendations for cost-effective internationalization, minimizing risks. The project highlights the importance of understanding market dynamics, strategic frameworks, and the benefits of joint ventures for entering new markets. The analysis also considers the economic indicators of the Peruvian market to identify opportunities for the company.

Title

INTRODUCTION
This research consists of Intecol expansion its business in the Peruvian market, base in
the characteristics of the Intecol a company being this of small size with low capital, and the
options they do have in the Peruvian side, this research will be oriented in the joint venture
option as is considered the most suitable way to enter in the Peruvian market, we will see and
overview of Intecol path, its activities, operations and strategies of the company in question, In
order to undertake research, relevant literature review will be study and taking in count an
overview of the joint venture what it is? Advantages and disadvantages, as well as the factual
situational of the economy and the industrial sector in Colombia and Peru, literature review
about the methodology will help to do the primary data collection be the most professional way
possible, this will give support and background in general, in the methodology we will see an
justification of the selected method for data collection with the aim to understand why is the
most convenient way to carry out the research, this will involve semi-structured interviews to the
managerial department in Colombia, the result of this interviews will be set out and put in
analysis, Conclusion and recommendations, getting out the most helpful information possible,
with the aim to give advice of the best practice possible in order to lower the risk of becoming
international in a cost effective way.
Background of the company: Intecol is an Colombian company with extensive knowledge of
the technological solutions established in the market and its practical application, we are always
oriented to the execution and materialization of projects with measurable results, in Automation
and industrial instrumentation, Energy Management, Quality Control and Industrial Software,
with the specific specifications of each client and its industry sector.
the company was founded in 2003 in order to provide the Colombian industry with technological
solutions for the continuous improvement of its production processes. With more than 14 years
of experience, we have increased our portfolio of products and services and intervened areas as
small organization the company operate nationally with an market share of 10% of the national
market by 2018, leaving the national scene to also intervene in the Latin American market
industry.
As a technology integrator, we are an organization that has extensive experience and we have

strategic alliances as a Representative, Integrator and Distributor, with a large number of highly
recognized technology providers in the sector.
The industry in Peru: with a 3.7% increment in the GDP Peru economy keep performing a
positive dynamic lately, due to growing in the different fields of the business, In 2018 the
manufacturing sector would reach its highest rate in five years to 3.7% as a result of the
acceleration of private consumption that would encourage the production of mass-oriented
manufacturing, In terms of private investment, growth of 4.6% is expected, consolidating the
slight recovery in 2017 (0.5%). According to the Central Reserve Bank (BCR), there are
investment announcements for the next two years amounting to US $ 18,369 million,
concentrated mainly in mining (35.5%) and in infrastructure (21.9%). The expansion of the Jorge
Chávez International Airport stands out for US $ 1,500 million in five years and the Line 2 of the
Lima Metro. In addition, an investment announced projects to be awarded for an amount of US $
10 billion for the period 2018-2020 those positive data invited to the industrial engineering be
optimistic in an important demand of services (Lima chamber of commerce , 2018).
LITERATURE REVIEW
The Ansoff matrix
The Ansoff matrix figure, exposes the possible product and market combinations on which they
can base their future business lines, Companies had to evaluate specifically in which directions
of development their activity should follow to establish the strategies to be carry out.

Market penetration: Corresponds to the first quadrant that is the combination of current
markets and products. In this case, the strategy aims to increase market share, that increase sales
using the same products. To achieve this, a series of activities are carried out, among which are:
 Increase advertising activities and promotions in order to attract more customers
 Capture customer preferences of our competitor
 Increase the consumption of current customers through special promotions for them,
discounts, etc.
The penetration strategy is one that provides the highest level of security to the company as it
knows its products and the market very well. In any case, it may require an important effort to
grow if the market is close to its saturation point.
Development of new markets: It is the quadrant of the combination of current products with
new markets. In this case the objective of the strategy is to identify new markets in which the
product can be valued. New markets may include new consumer segments, unexplored national
markets or even international markets. The main activities that are applied in this strategy are:
 Development or expansion of new distribution channels
 Attract customers from other market segments
 Participate in international fairs, present the products and get clients abroad
 International Advertising
Product development: Corresponds to the quadrant of the combination of new products in
current markets. The objective of this strategy is to create and develop innovative products
(whether for quality, design, new functions, etc.) that can be sold in the current market. Among
the activities necessary to carry out the strategy are:
 Launch of new products
 Create new product ranges differentiating by quality (for example: normal watch and
luxury watch)
 Create products with new models or sizes
 Introduce relevant technical or design improvements
 Create more varieties of the product example: light version, different flavours, different
colours, etc.

Diversification: It is the quadrant with the combination of new products in new markets. Here
the objective of the strategy is to open new markets through the sale of new products. It is a risky
strategy but it can be profitable if it is carried out successfully. Among the activities necessary to
carry out this strategy is a combination of product development and market development
activities.
Porter’s Generic Strategies
The three generic strategies proposed by Michael Porter are: global leadership in costs,
differentiation and focus or concentration, through them a company can deal with the five forces
that shape competition in a sector and achieve a sustainable competitive advantage that allows it
beat rival firms.
The Cost Leadership Strategy: This strategy requires detailed and in-depth knowledge of the
activities of the value chain to identify those in which cost advantages can be achieved. The
analysis of the activities in the value chain is carried out from the point of view of the cost
drivers. The main driver in the cost leadership strategy is the experience curve, according to
which the unit cost of production decreases with the cumulative number of units produced. This
advantage is considered sustainable, since it is not easy to imitate by the followers as long as the
production technology does not change. In contrast, economies of scale can be more easily
imitated.
Differentiation: It implies that the business unit offers something unique, unmatched by its
competitors, and that it is valued by its buyers beyond simply offering a lower price. is necessary
to understand the potential central source of differentiation that arises from the activities of the
value chain and the deployment of the necessary expertise to make these potentialities come true.
Differentiation requires the creation of something that is perceived as unique in the entire
industry. Approaches to differentiation can take many forms: brand design or image, technology,
features, customer service, network of brokers or other dimensions.
The Focus Strategy: The focus strategy (both based on costs and differentiation) is
characterized by the prior choice of a segment, local market, stage of the production process, etc.
and for adjusting an optimal strategy that responds to the specific needs of the chosen customers.
It is, therefore, not to be the best (in cost or differentiation) of the market, but to be the best in the
chosen segment. The concentration can be based on the existence of different types of buyers

(with different purchasing strategies), on the existence of different distribution channels (direct
sales, by retailers, by representatives, by mail, etc., etc.) and on the possibility of offering
different varieties of products (size, quality, price, performance, etc.).
Bowman's Strategic Clock
The purpose of Bowman's Stategic clock is to guide how to position a product based on two
dimensions – price and perceived value, as illustrate in the above figure business will have a
variety of options, Taking into account the different options and both "variables" determines
what is known as the "strategic clock" which offers eight possibilities of combining price and
added value in order to determine the company's strategy:
Low price and low added value: It combines reduced prices, low perceived added value and an
approach especially aimed at the market segment that is most price sensitive, Its viability is
based on a part of consumers that recognize the low quality of the product but can’t or doesn’t
want to acquire items or services of higher quality, In many occasions it is also considered as an

option of “entry” in a certain sector in order to generate a certain volume of business and to
move towards other strategies.
In the views of Haselwanter, Muskat and Zehrer, (2016) the next position is low price
where company positions itself low in the market so that it gets the position of the low cost
leader. Further the next position is of hybrid where the company tries to make a combination of
both low prices and some product differentiation. Further in the next position the company only
focuses on the differentiation strategy and tries to differentiate its products from that of the
customers.
But Malik, (2018) further states that the next position the company always tries to do a
focussed differentiation wherein the company positions its product at high price level as they
want to focus only on the high class consumers. Next is the position of risky high margins
because the company positions its products at high prices but does not provides any extra added
advantage. But according to Kim, (2019) the another position is of monopoly pricing where there
is single seller and it has its own prices which the customers has to follow if they want the
products or the services. At last the position is of the loss of market share. It is because of the
reason that if the company goes for a monopoly pricing then it will not be for a longer period of
time. As more people will not like the prices they will stop purchasing it and this will result in
loss of market share.
Methodology justification
Methodology Justification
Qualitative This methodology is used because of the
reason that qualitative research helps in
understanding the underlying concept behind
happening of anything (Kumar, 2019). This
type of methods clears all the concepts which
help the researcher in building a new beliefs
and trends relating to the new concepts
identified with the help of the research done on
basis of qualitative research.
Deductive It is an approach which explores a theory or

concept in more detail. This approach starts
with studying the theory and then developing
some new concepts and hypothesis with the
detailed study of the theories. This approach is
use because of the reason that this best suits the
qualitative research done.
Interpretivism Interpretivism is a way to analyse the feelings,
thoughts, behaviour and experience of any
thing or any person is done in order to group
together some diverse approaches. This is used
mainly because of the reason that it is a
subjective theory which is suitable with the
qualitative research method and deductive
approach of research (Mackey and Gass,
2015).
Random sampling This is a type of sampling wherein the
researcher try to select some of the samples
directly from the whole population so that the
required test can be done on them and some
inferences can be drawn out of the results got.
This type of sampling is used because of the
reason that every part of population has equal
chance of getting selected as a sample.
Thematic analysis It is a type of analysis wherein the questions
are divided into different themes and then with
help of the collected data and by using some
charts and graphs the results are interpreted
(Taylor, Bogdan and DeVault, 2015). This
analysis is used because it clearly outline all
the facts and figures relating to the research

topic.

RESEARCH METHODOLOGY
Research methodology is an effective approach which is useful in fillings gaps on the
particular subject matter. It helps in gaining wider viewpoints which in turn results in high
operational growth and strategic efficiency in order to carry out particular research on the
specific subject matter.
Research methods: This is an effective approach as it is useful in determining the deficit
of knowledge in order to gain wider perspective on the particular subject matter. It is very useful
in allocation new information for attaining higher goals and objectives of the research. It can be
classified into qualitative and quantitative approach. Qualitative approach is based on collection
of non statistical and non-numerical information for better in-depth description on the subject
matter (Mackey and Gass, 2015). Quantitative data is useful in gaining logical answer by taking
into consideration numerical data. The researcher of this study has opted for qualitative
approach.
Research philosophy: This is an effective approach as it helps in analysing all the
information by analysing and interpreting the data. It is very useful in development of knowledge
with the help of development of hypothesis. It can be classified into positivism and
interpretivism approach. Positivism approach takes into account empirical view and evaluates
positive facts for long term sustainable growth and efficiency (Kumar, 2019). Interpretivism
approach is used when the data is interpreted by taking into consideration viewpoints of human.
It is an effective way to analyse the feelings, thoughts, behaviour and experience of any person
or individual. The researcher of this study has opted for interpretivism approach.
Research approach: This is an effective approach as it is very useful in structuring and
developing an effective plan with the help of broad assumptions. It can be classified into
deductive and inductive approach (Taylor, Bogdan and DeVault, 2015). Deductive approach is
very useful in development of various hypothesis which in turn helps in data analysing and
reasoning. Inductive approach is largely based on development of new ideas and theories based
on the particular relevant data. The researcher of this study has opted for inductive approach.
Research design: This is an effective approach as it is very useful in designing a
structure to carry out the particular research project in a systematic and appropriate manner. It
can be classified into exploratory and descriptive approach. Exploratory method is useful when
the researcher wants to explore the particular area of study. Descriptive approach is useful in

gaining in- depth collection of data. The researcher of this study has opted for descriptive
approach.
Data collection: This is an effective approach as it helps in collecting all the relevant
information from various sources. It can be classified into primary and secondary approach.
Primary data is the data which has been collected for the very first time. On the other hand,
secondary data is the information which has already been collected earlier. The researcher of this
study has opted for both primary and secondary source.
Sampling: This is an effective approach as it helps in collecting sample from large
number of population. It can be classified into probability and non- probability sampling method.
The researcher of this study has opted for random probability sampling method where 20
managers of Intecol company will be selected.
Data analysis: This is an effective approach as it helps in interpreting and evaluating the
data collected for the particular subject matter (Taylor, Bogdan and DeVault, 2015). The
researcher of this study has opted for qualitative approach where thematic analysis will be used.
Ethical consideration: The researcher of the study has carried out the study using various
ethical sources. All the data collected has been cited and the resources has been effectively
managed (Mackey and Gass, 2015).
DATA ANALYSIS AND INTERPRETATION
QUESTIONNAIRE
Name:
Age:
Gender:
1 Is globalization is necessary for every organization in rapidly changing global environment?
 Yes
 No
2 Biggest benefit organization will be getting from the globalization
 Creativity and Innovation
 Foreign Culture