TechnologyOne: Global Marketing in China Market Report

This report assesses the potential of TechnologyOne to enter the Chinese market, analyzing its external environment using PESTLE analysis, market dynamics, and competitive landscape. It examines the company's competitive advantages, including high customer retention rates and its established position in the Australian market, while also acknowledging potential challenges such as cultural differences, human resource management issues, and the importance of selecting the appropriate entry mode. The report further explores the company's strengths, weaknesses, opportunities, and threats through a SWOT analysis, concluding that despite facing significant challenges, TechnologyOne has substantial opportunities in the Chinese market, driven by the country's rapid technological advancements and growing IT sector.

Running head: GLOBAL MARKETING
Global marketing
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the potentiality of TechnologyOne in entering the
market of China. In addition, the competitive advantages of them and their probable competitors
will be conducted to determine their potentiality. It had been concluded that they are having huge
opportunities in entering the market of China. However, there are various issues also being
identified which may be faced by them. Thus, it is important for them to overcome these
challenges effectively in order to grab the opportunities.

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Table of Contents
Introduction......................................................................................................................................3
Analysis of External environment...................................................................................................3
Market analysis................................................................................................................................5
Probable challenges.........................................................................................................................6
Competitiveness of TechnologyOne................................................................................................8
SWOT analysis............................................................................................................................8
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11

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Introduction
In the present business scenario, contemporary business organizations are opting for
international business to expand their market share and increase the revenue turnover. With the
help of globalization and technology advancement, entering in the global market has become
easier than ever (Dunning, 2012). However there are few issues that are to be faced by the
organizations in operating in the international market. Thus, it is important for the organizations
in the global business to determine various factors which can affect their business potentiality.
TechnologyOne is one of the leading organizations operating in the field of information
technology. They are based in Australia and offering various software solutions to their clients. It
is being founded in 1987 and they are currently enjoying the status of market leader in the
Australian market (About Us | TechnologyOne, 2017). With having their home market and
capital infrastructure are being established, it is the perfect time for them to enter in to the global
market. China is one of the largest markets for the software providers across the globe due to the
fact that it comprise of the leading organizations in the world. Thus, entering the market of China
will be the effective target market for TechnologyOne.
This report will discuss about the potentiality of TechnologyOne in entering the market
of China. In addition, the competitive advantages of them and their probable competitors will be
conducted to determine their potentiality. External environment will be analyzed for them in
order to identify the key environmental challenges to be faced by them in the new market.

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Analysis of External environment
External environment of the host country for TechnologyOne which is China will be
evaluated with the help of PESTLE analysis. According to the pestle analysis, the first aspect to
be considered is the political environment. The political environment of China is complicated yet
stable (Jadhav, 2012). This is due to the reason that, China follows the autocratic communist
form of government. Thus, the political environment is not liberal and democratic. However, the
political structure of China is stable due to the fact that government of China is initiating various
business friendly initiatives to attract foreign investments. Moreover, their initiation for
generating innovations helped them to be the innovation hub for the world. The next aspect is the
economical environment. The economy of the China is still in the developing stage; however,
China is the leading developing countries in the world with having growth rate more than some
of the developed countries (Bradley et al., 2012). Thus, TechnologyOne will have huge
opportunities in effectively operating their business in the Chinese market. However, on the
other hand, challenges will be there for them regarding the strict regulations of the Chinese
government.
The next factor is the social environment. China is having the huge population in the
world and they are driven by innovations and technology (Oke, Walumbwa & Myers, 2012).
Moreover, availability of the cheap and skilled employees will help the organization in
effectively setting up their operation facility in China. Technological environment is the next
aspect to be considered. As discussed earlier, China is one of leading countries in terms of
technologies. Majority of the latest technologies and inventions are being initiated there. Thus,
TechnologyOne will have the access of latest innovations and technologies. The next factor is
the environmental factor. China is having some of the most stringent policies regarding the

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environment and climate change. However, it will not directly affect the business potential of
TechnologyOne due to the fact that emission of pollutants is not relative with their operations.
However, China is the largest emitter of pollutants and thus it may have adverse effect in their
business in the long term.
The last aspect to be considered is the legal environment. China is having stable and
effective legal structure and system with having business and investment friendly legislations
(Chow, 2015). However, there are instances and criticisms generated in the past regarding their
legal systems and policies. Thus, being a foreign investor, it should be well considered by
TechnologyOne before entering the market of China.
Market analysis
Chins is currently leading the world in the field of information technology. There are a
few reasons behind their leadership status. One of the key reasons is the development of
technologies and innovations in rapid rate (Orr & Roth, 2012). In the current business scenario,
China is known as the innovation hub of the world. Another key reason is the availability of the
cheap and skilled employees and other resources. It is being estimated that the information
technology industry in china will be leveraged further by the initiation various global
organizations in China. Thus, the market for the new software solution is rising which is good
opportunities for TechnologyOne.
However, one of the key challenges that TechnologyOne will face in the Chinese market
is the presence of various leading and established organizations offering software solutions. This
is due to the reason that China is having huge number of skilled employees which are being
available at a lower cost (Varma, 2013). Moreover, China is also the hub for global outsourcing

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of jobs from the developed countries. This factor also motivated several organizations in having
their software development center here in China. Thus, the competition for TechnologyOne is
more intense in the Chinese market than on the Australian market. The major competitors in this
market are the Software AG, Actio, Hartung and Instem. The key competitive advantages of
these organizations are the cost effectiveness and wider audience (Wagner III & Hollenbeck,
2014). These organizations are leveraging the opportunity of low employee cost and driving
innovation to the fullest. Moreover, they are catering to wider audience compared to
TechnologyOne.
On the other hand, the key competitive advantages for TechnologyOne are their retention
rate of the customers. According to the data available, the customer retention rate of
TechnologyOne is 99 percent. Thus, it will help in generating positive word of mouth from the
existing customers (Khan, 2012). Moreover, their customer list comprises of various government
institutions which is a good evidence of their service reliability. All these factors will help them
in tapping in the Chinese market more effectively.
Probable challenges
With having huge opportunities in entering the market China, TechnologyOne will also
may face various challenges and issues that can be generated from their international business.
One of the key probable issues is determining the cultural aspect of the host country (Kraidy,
2017). In the case of TechnologyOne, the cultural environment in their host country and home
country is quite different. In addition, the political structure and system of both the country is
also different. Thus, it will be a challenge for them to effectively adhere to the different rules and
regulations. Management of the human resource may also face some issues due to the difference

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in culture of two countries (Stahl, Bjorkman & Morris, 2012). Thus, organizational cultures that
are viable in the Australian region may not get succeed in the Chinese market. The requirement
of the Australian and Chinese employees is different and it will be a challenge for the
organization to effectively meet the diversified requirement in the global market.
The choice of the entry mode should also be taken accurately by TechnologyOne in
entering the market of China. This due to the reason, that a huge financial risk is being involved
in entering the market of a new country (Laufs & Schwens, 2014). Thus, TechnologyOne should
consider the effective entry mode strategy to enter the Chinese market. It can be recommended
that, the most effective entry mode strategy for TechnologyOne will be the joint venture. This is
due to the reason that, in the case of joint venture, the business risk involved with them will get
reduced and will be divided among the participating organizations (Ertug et al., 2013). In
addition, the domestic organization in the joint venture will have the more knowledge about the
local market than that of TechnologyOne. Thus, it will help them in effective determination of
the market requirement.
In the international business, entering in the foreign country will not only help the
organization in gaining the market share and setting up the business there. Determination of the
partners in the organization such as suppliers should also be effectively accomplished (Tang,
Yang & Wu, 2016). This is due to the reason that, in the foreign country the effectiveness and
the approach of the partners will be different compared to the home country. Thus,
TechnologyOne should determine the sourcing of their resources before setting up their
operations in the Chinese market. Thus, TechnologyOne will face challenge in sourcing the
suppliers and other raw materials for their operations in China.

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International political relationship is also an important factor to be considered by the
organizations entering in the global business. This is due to the reason that, the political
relationship between the home and host country of the particular organization should be
favorable enough in order to effectively promote the business potential of the organizations
(Dunn, 2016). In case of TechnologyOne, the relationship between the Australia and China will
be a determining factor for their outcome of their business. If the relationship between the two
countries gets degraded then it will have adverse impact in the business performance of them. It
may influence the Chinese government to impose sanctions on the Australian organization which
will create obstacles in the business operation of TechnologyOne. Thus the risk of international
political scenario is also applicable for them.
Competitiveness of TechnologyOne
Having analyzed the external environment of the host country of TechnologyOne along
with identifying the probable issues that may be faced by them, it is the time to determine the
competitiveness of TechnologyOne in operating their business in the foreign countries. SWOT
analysis will be done to identify the strengths and weaknesses of them.
SWOT analysis
Strengths:
The strength of TechnologyOne includes the customer loyalty. As discussed earlier, the
retention rate of TechnologyOne is 99 percent. Thus, the existing customers are highly satisfied
with their solutions. It will act as competitive advantages in attracting the existing customers.
Another strength being identified is their establishment in the Australian market. They are

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currently leading the market in Australia and thus it will provide them the necessary push by
having access to the resources in setting up the operation in the foreign market.
Weaknesses:
Market share of TechnologyOne outside the Australian region is less and they do not
have global existence. Thus, the brand value of them is limited to the Australian region only. It
will create barrier in developing their market in the new regions. Another weakness of them is
the pricing strategy. TechnologyOne is not known for their price effectiveness unlike the other
software solution organizations from the developing economies. Thus, this will not make them to
stay ahead in the competition. Moreover, in the market like China, price is an important factor to
be considered.
Opportunities:
The growth rate of the global information technology sector is positive and is increasing
rapidly. Thus, in the global market, TechnologyOne is having huge opportunities to grab. In the
current business scenario, more and more organizations and institutions is going digital and
technology friendly which further increasing the requirement for the digital solutions. Thus, the
market for them is growing.
Threats:
Adhering to the different and diverse regulations in the global market is a big challenge
for them in operating in the international market. Entry of the competitors from the developing
economies which are providing more cost effective services are gaining more market share.

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Another issue being identified is the increase in the cost of production which will further
increase the cost of the service.
Conclusion
Having discussed the external market situation of TechnologyOne in operating in the
Chinese market, it can be concluded that they are having huge opportunities in entering the
market of China. However, there are various issues also being identified which may be faced by
them. Thus, it is important for them to overcome these challenges effectively in order to grab the
opportunities. The competitiveness of TechnologyOne are also been analyzed here in this report.
It shows that they have certain threats and weaknesses in their way which however can be
overcome. It is being expected that effective implementation of the entry mode strategy and
other strategies will help them to gain more market share in the global market.

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Reference
About Us | TechnologyOne. (2017). Technologyonecorp.com. Retrieved 31 August 2017, from
https://www.technologyonecorp.com/about-us
Bradley, S. W., McMullen, J. S., Artz, K., & Simiyu, E. M. (2012). Capital is not enough:
Innovation in developing economies. Journal of Management Studies, 49(4), 684-717.
Chow, D. (2015). The Legal System of the People's Republic of China in a Nutshell, 3d. West
Academic.
Dunn, D. H. (Ed.). (2016). Diplomacy at the Highest Level: The evolution of international
summitry. Springer.
Dunning, J. H. (2012). International Production and the Multinational Enterprise (RLE
International Business). Routledge.
Ertug, G., Cuypers, I. R., Noorderhaven, N. G., & Bensaou, B. M. (2013). Trust between
international joint venture partners: Effects of home countries. Journal of International
Business Studies, 44(3), 263-282.
Jadhav, P. (2012). Determinants of foreign direct investment in BRICS economies: Analysis of
economic, institutional and political factor. Procedia-Social and Behavioral Sciences, 37,
5-14.
Khan, I. (2012). Impact of customer satisfaction and retention on customer loyalty. International
Journal of Scientific & Technology Research, 1(2), 106-110.
Kraidy, M. (2017). Hybridity, or the cultural logic of globalization. Temple University Press.