ABC Motors: Strategic Business Plan for International Expansion

This report presents a strategic business plan for ABC Motors, a startup luxury car company, focusing on international expansion, particularly within the Canadian market. It begins with an introduction outlining the company's objectives and the importance of international business strategies. The report details SMART goals, analyzes the impact of globalization on the new venture, and explores international business opportunities and strategies. It includes a PEST analysis of the Canadian market, assessing political, economic, social, and technological factors. The plan also covers strategic planning, market entry strategies (specifically the waterfall approach), and an assessment of economic and geographic factors. Further sections address the competitive environment, human resource management, financial issues, potential risks, and marketing strategies, including the role of the internet. The report concludes with key success factors and references, providing a comprehensive overview of the strategic plan for ABC Motors' international venture.

Strategic Business Plan

Running Head: Report
Contents
Introduction......................................................................................................................................2
SMART goals..................................................................................................................................3
Impact of the globalization on a new venture..................................................................................4
International business opportunities and strategies.........................................................................5
Strategic planning........................................................................................................................6
Market Entry strategies....................................................................................................................7
Assessment of economic and geographic factors............................................................................9
Pest Analysis for ABC Motors........................................................................................................9
Competitive environment..............................................................................................................10
Human resource management........................................................................................................11
Financial issues..............................................................................................................................11
Potential risks.................................................................................................................................12
Marketing issues............................................................................................................................14
Role of internet..............................................................................................................................15
Key success factors........................................................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................18
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Introduction
The report is compiled to explain the international business strategic plan for the new venture.
The new venture that selected to establish in the international market is the ABC motors. An
ABC motor is Startup Luxury Car Company and it needs to focus on international business
strategies. This plan will include some of the various important concepts, models and theories
relevant for the preparation of the International strategic plans. The preliminary research has
been conducted with the intent to analyze the three biggest luxury car companies such as
Porsche, Audi and Mercedes Benz which will be the biggest competitors of the ABC motors.
The analysis of these automobiles companies helps in developing the international strategy to
gain a competitive advantage. There is a need to analyze international opportunities by start-up
companies. The analysis of the six different countries has also been performed including China,
the United Kingdom (UK), India, Canada, Brazil, and South Africa. The aim of this plan is to
successfully establish the business in the international market by adopting the global strategies
and also identifying the risks they may have to face while establishing their new business in the
international market. ABC motors will provide all the automotive products and services to the
Canadian market. This report also contains the description of the entry modes in Canada and
various essential elements are also going to be analyzed (Twarowska & Kakol, 2013).
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SMART goals
The objectives set for the international strategic plan in the context to the ABC motors need to be
Smart objectives. According to the SMART theory, it is essential to set specific, measurable,
accurate, reliable and time-oriented goals. The features of the SMART objectives are-
 Specific - The objective for the ABC motors is to offer luxurious cars to the people of
Canada.
 Measurable - The goals set for the individuals need to be measurable in terms of the
outcomes also. The growth of the company can be measured by analyzing the profits and
revenue achieved at the end of the year (Lokhande & Rana, 2013).
 Achievable - The objectives of the team or employees of the ABC motors need to be
attainable. The company want to establish its business in the Canadian market which can
be easily attainable by investing money and building effective strategies.
 Reliable - The objectives set for the ABC motors should realistic and reliable in nature.
ABC motors have the vision to become the most innovative and outstanding automobile
company in Canada.
 Time - It is very important to set a time period for the achievement of the objectives.
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Impact of the globalization on a new venture
Globalization is gaining acceptance throughout the world and because of this a lot of
automobiles organizations are looking for expansion and opening companies in various big and
small all cities. Because of this, there is also the requirement for trained professionals who have
the necessary skills and qualifications to practice effective management. There are numerous
international automobiles companies that offer attractive career options for people possessing
management degrees in engineering. The globalization has a great impact on the global new
venture of ABC motors as it will help to increase the international trade and reduces the trade
barriers between the countries. Also, globalization has influenced the operations of global
ventures. In the context of the automobile industry, the globalization will affect the products that
are developed and offered to the customers in the international market. The high level of
international trade in Canada is the major driver of globalization which helps the new startups to
establish their operations and business in Canada and positively increase the return on the
investments. The advancement of technology is another driver that encourages global businesses
like ABC Motors to drive operations in Canada. The operations of the companies across
international boundaries always are managed by using the latest technologies and
communication channels (Zamborsky, 2016).
Global strategic rivalry theory emerged in the year 1980s and this theory focused on gaining a
competitive advantage against other firms in the global environment. ABC motors are luxury car
company and it needs to promote itself in order to compete and survive in the market. The theory
of global strategic rivalry developed by Krugman and Kelvin Lancaster also explained about the
barriers to entry. The barrier to entry is the obstacle for the firms when they are trying to enter
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into new markets or countries. International Marketing strategy and its implementation is the
most important part of the marketing plan as it involves the tactics aligned with the core business
strategies (Shiga, 2012). Tactics are the conceptual actions that are executed by the organizations
for performing one or more tasks at one time and these tactics are helpful in implementing the
big marketing strategies as well as enables to provide the details of the strategies in order to
achieve the goals of the company.
International business opportunities and strategies
From the PEST analysis of Canada, some of the international business opportunities for ABC
motors are identified. ABC motors have the opportunity to increase its customer base by
establishing the business into the country as Canada is the second largest country in the world.
The high population of the country is a major benefit for the set up of the new business. Moving
further, the economic factors show that there is a free trade agreement between the European and
Canadian union which provides a great opportunity for ABC to expand its business in the
European markets. There are many other factors such as high growth of the automobiles and high
growth rate of GDP and regulations on the oil prices and all these offer a great opportunity to
ABC motors to establish its business in the Canadian market. ABC motors have a great
opportunity to attract the people from niche markets as the Canadian people have a high buying
capacity and high standard of life. The social-cultural factors ensure that the ABC motors will
gain a high amount of profits because of the high spending power of the Canadians. Canada has a
highly stable government offering supportive trade agreements and employee rights regulations.
These political and legal factors also show that the company will have the opportunity to reduce
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its trade barriers by focusing on Canada and its subsidiary markets (Charlotte, Amandine, &
Philippe , 2017).
Strategic planning
The strategies adopted by the ABC motors for starting up its business in Canada are given below:
1. Business level strategy: Focus differentiation
According to this strategy, ABC motors will focus on the needs of the narrow segments and will
produce a range of luxury cars for the different segments. The luxury car will manufacture for
the highly populated and high-income people who will able to pay the high prices for these ABC
Cars. Secondly, the mini cars will be introduced for the people seeking for compact vehicles and
also will produce products like motorcycles over the traditional vehicles. The price of every
product will set differently as per the product cost and the target audience needs. The investment
in the research and development will help in aligning the focused differentiation strategy to
produce new and innovative features (University, 2018).
2. Corporate level strategy: diversification
ABC motors will operate under the dominant business diversification strategy. There are more
chances to gain a high amount of revenues from the automotive segments. By focusing only on
the few businesses, ABC motors will able to develop the capabilities and will offer superior
services to their customers.
3. Global Strategy: Joint ventures
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The transnational strategy will help ABC motors to gain global efficiency as well as local
responsiveness. According to transnational strategies, the company will operate under the joint
ventures and non-equity strategic alliances with companies who can provide support in the
production techniques.
4. Marketing strategy: To gain Canada market by Innovative Advertising
The main objective of ABC motors is to offer outstanding products and services to the
international markets and it can be possible by adopting innovative advertisements. The
company will organize a smart advertising campaign in Canada. Technology plays an important
role in implementing marketing strategies with the help of various social media platforms
(Thome & Medeiros, 2016).
Market Entry strategies
There are many entry modes available for ABC motors to enter into the international markets
such as licensing, franchising, contracts, direct and indirect exporting etc. ABC motor will use
the waterfall market entry strategy which is a sequential business expansion to foreign markets.
The best part of this stage is that it clearly defines the entry stages and use of the experiences and
the knowledge obtained through one stage will use to enact the next stage. Abc Motors will enter
one region of Canada then it will use its experience and knowledge to expand business in another
region of Canada (Nkomo, 2016). The waterfall market entry strategy is shown in the below
image:
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In this case, each stage is represented as a single foreign market and ABC will enter into one
foreign market, established itself and promote its products to build a brand image. When the
company will able to make its suitable position in the one region then the business can be
expanded to the other regions of the Canada market. This is known as the waterfall strategy
because it works in the multi-layers like waterfalls where water passes through each stage before
it reaches the final destination.
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Assessment of economic and geographic factors
During the market research and preliminary analysis, the positive impact of economic and
geographic has been seen on the ABC motors as it helps the new business to contribute towards
the development of the economy. ABC motors have the opportunity to increase its customer base
by establishing the business into the country as Canada is the second largest country in the
world. The high population of the country is a major benefit for the set-up of the new business.
Moving further, the economic factors show that there is a free trade agreement between the
European and Canadian union which provides a great opportunity for ABC to expand its
business in the European markets. There are many other factors such as high growth of the
automobiles and high growth rate of GDP and regulations on the oil prices and all these offer a
great opportunity to ABC motors to establish its business in the Canadian market. ABC motors
have a great opportunity to attract the people from niche markets as the Canadian people have a
high buying capacity and high standard of life (Azuayi, 2016).
Pest Analysis for ABC Motors
 Political factors: ABC motors will be affected by the common political instability and the
introduction of the new policies, regulations and political corruption. Firstly, the
consumer’s ability to buy the automobiles will be affected because of the political
instability and secondly, investments will be at risk for a new venture.
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 Economic factors: ABC motor business can be affected by tariffs and currency
fluctuations in the future. It is observed that the global economy fluctuations always
affect the performance, valuation and profits of the companies.
 Social factors: Every region in the Canadian market have different cultures and unique to
the country. ABC motors need to adjust its products accordingly to meet the needs of
society. Change in the taste and preferences of the people may also affect the business in
the coming time period (Bhandari, 2018).
 Technological factors: The innovation and technological factors are the most essential
element and the only way for the company to stand out among the competition. The
change in technologies is always a risk for the organizations, especially for newly set up
businesses.
Competitive environment
The high competition is always a risk for the organization. The biggest competitor for ABC
motors will be Mercedes Benz, Porshe and Audi. Also, while entering into the new international
markets, the company also faced government restrictions on trade agreements. In order to
compete with the competitors, it is very important to build a strong image of the company by
offering unique, stylish and variety of products. The advantage is based on the levels of
innovation of products. Audi and Porsche have been able to develop a comparative advantage in
the automobile industry and in the operations of the organizations in Canada. The levels of
competition in the industry have been increased due to these factors (Hill, 2013).
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Human resource management
Human resources are the key resources required for the implementation of the strategic plans.
ABC Motors employs various people involved in a variety of functional areas in the automotive
retailing business. Every person working in an organization needs to have posses some specific
attitudes, knowledge and skills in both technical and non-technical areas. The need for human
resources and labor is changing with time as they are expecting more wages from the company.
The high Expectations regarding the wages have a great impact on the establishment of new
business in the international market. The highest rate of wages offered to labor increases the cost
of the company. High Investments is required because of the high expectations of human
resources (Topliff, 2017).
Financial issues
There is much risk involved in the operations of the ABC Motors business. The ABC motors
need a huge amount of funds and money for investment as it’s a business of manufacturing of
luxury cars. Financial resources are required for remuneration purposes as well as for the
administrative cost in the form of telephone calls, printing and postage. In the case of the buying
and selling of cars, the possible cost will be the cost of spare parts, the cost of advertisements and
promotions, transportation costs and cost of manufacturing. Automobile business needs
investments and different sources of funds such loan from the banks, personal savings and
borrowed money. It is very difficult to arrange funds through these sources (Casadesus-Masanell
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