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The concept of expanding a business of an organization on an international basis

josh
April 26, 2018 0 Comment

Introduction

The concept of expanding a business of an organization on an international basis is termed as international business. For any business to enter the international arena it must consider various aspects such as understanding the market trend in which it wishes to enter, analyzing the factor that govern that particular market, economic condition prevailing in that market, profitability of the company upon entering the market and so on. So as a result to analyze all these factors the company needs to conduct a proper marketing research to understand all the factors governing the market in which it wishes to operate and analyze the factor and after analyzing the factors and getting better knowledge of the economy, decide whether to enter into the market or not as it involves huge financial investments and if the decision to enter the foreign market backfires then there will be a huge loss to the economy.

Task 1

MEMORANDUM

TO- The International Marketing Director

CC-

FROM- The International Marketing Assistant Manager

DATE- 4th March 2017

SUBJECT- Adopting an International Marketing Approach (IMA) as a prelude for International Development Operations.

1.1

Dassault aviation should adopt an international marketing approach as by expanding globally, Dassault Aviation will be able to increase its business as it will be exploring the untapped market which will in turn help the company to maximize profit and by also entering a different economy the company will be able to make for its losses if any they are suffering in the present economy. There are various advantages of expanding globally which includes increase in market opportunities as by operating in a single market the growth opportunities are limited whereas expanding globally the market opportunities will be diversified as the company do no have to depend one single market for revenue generation. Other advantage includes increase in profit by economies of scale which specify that the company can earn more profit by saving on their expenses due to high production demand occurring due to expansion.

Dassault will benefit from international marketing from a variety of ways which includes proper branding of the company which is a very essential element in context of gaining market share, explore areas with less competition as the markets of those areas are emerging in nature, focus on growing market as, if there is a recession in one market we can focus on other market to generate revenues and increase in economies of scale which indicates that with greater production demand the profit will be more and the expense will be less.(Paliwoda and Thomas, 2013)

1.2

In order to analyze the business potential of a particular market analysis of the factors governing the factor is very necessary. These factors include Political, Economical, Social and Technological. Together all these Factors are termed as Pest.

PEST analysis on the Indian Market for Dassault Aviation:

The political factors play a huge role in development and establishment of a business organisation. In case of India the political structure is not that much unstable but the political factor which will impact Dassault the most is the detoriating India-Pakistan relation which will hamper its daily business and also the frequent strikes conducted by the workers union due to various political issues.

The economical factor which can govern Dassault’s operation in India is the unstable economic structure and unpredictable economic growth as after the demonetisation era in India the economic framework is changing rapidly which can impact the businesses of Dassault.

The social factors that can affect Dassault’s business in India are the variety of people with different cultures and different demands and so it will be very tuff for a foreign company to understand all the cultures of the country and accordingly customize their service according to customer requirements.

The technological factors which can govern Dassault’s business in India is the advancement of India in the field of technology which has resulted into providing more services to aviation customers such as internet booking of tickets and auctioning of seats according to customer needs and improvement in the technological framework of the Airport Authority Of India.

Among all the factors the social factor is the most important for Dassault in context of Indian Market as mentioned above India is a country with diversified culture with different demand levels and satisfaction levels so in order to fulfil their needs and demands proper customisation of their service should be done by Dassault and as there are different types of demands from different cultures of people a large amount of customisation needs to be done which at first needs proper identification, To identify and customize these changes is a very tough ask for a foreign organisation.

1.3

International Market Research involves two Techniques namely:

· Qualitative Research technique which is generally used to explore the market and study its trends

· Quantitative Research technique which is generally used to draw conclusions after studying and analyzing the market.

Qualitative research techniques will help Dassault aviation to study the trend of the market and also the people in which it is planning to enter by various methods such as focus group, in- depth interview and projective techniques and will help Dassault gain more knowledge about the trends of people in using aviation services, customer wants and demands, the demand of the aviation industry and the prices that the customers are willing to pay to avail those services.

Quantitative Research technique will help Dassault to draw conclusion about the market which it targets to enter after statistically analyzing the results of other companies in the same sector by testing specific hypotheses by using random sampling technique by various methods such as surveys and questionnaires and choice modelling, This will help Dassault draw conclusion about the market share of the competitors of that market, the growth rate of its competitors, operating profit and revenue generated by the other competitors and in this way it will draw a conclusion about the economy of that place.

The advantages that Dassault will have by applying both these techniques are as follows:

· Dassault will come to know about the trends of the customers in that particular economy and it can help Dassault customize their business apparently before entering the market.

· These research techniques will help Dassault to know about the customer wants and demands in advance before entering the market and therefore can plan their service accordingly after analyzing the customer’s wants and demands.

· These techniques will also help Dassault to identify the flaws and deficits that its competitors are facing while operating in the market and can accordingly develop strategies according to that so that they do not face the same problems.

· This technique will most importantly help Dassault to understand the economy and market better by analyzing and reflecting on the statistical data developed to understand the scope of growth of the market in aviation sector and also focus on the existing market share of the competing companies and the profit and revenue earned by them which will in fact help to develop their financial strategy to operate in that market.

1.4

The Brazilian aviation Market is an emerging market as the aviation industry is experiencing rapid growth at a rapid rate because Brazil is seen as a potential market to all investors for launching their new products and services and further with the introduction of the new economic policies by the government many investors are being attracted towards investing in brazil and as Brazil is a very famous tourist destination in the whole globe marketers are keeping no stones unturned in looking for an opportunity to invest in Brazil and specially in the aviation industry as Brazil is the leading aviation industry in the whole of the southern hemisphere and moreover after the conclusion of the two biggest events on the planet namely the Football world cup and the Olympics brazil has seen a further boost in economy.

Brazilian market will be very attractive for Dassault’s new product as it is a very popular tourist destinations and people from all over the world tend to travel to Brazil for holiday purposes and that is why if Dassault’s new product is introduced in Brazil it can capture the Brazilian market by bringing tourists from the whole of Europe to different tourist locations in brazil and the biggest advantage is that it can operate all the year round because people from all destinations tend to fly to Brazil all the year round and moreover Brazil is a growing economy so investing in this economy will be profitable for the company.

The advantages that Brazilian Market will have on their product are as follows:

· It will provide a variety of platforms to the new products which includes tourism platform, business platforms and so on.

· It will provide the basic infrastructure needed for the new product to operate in the country.

· It will also provide the basic maintenance infrastructure to the new product which every aviation industry requires.

· It can also provide the skilled basic human resources needed by the new product to operate in that country.

The disadvantages that the Brazilian market will pose to the new products are as followed:

· The economy of Brazil is a growing one which means it is a profitable economy but however it poses some risks also.

· The political atmosphere of the country is in a state of instability due to various political scandals.

· The economy though is a growing one but still it has not recovered properly from the recession that hit the economy few years back.

After analyzing the advantages and disadvantages that Brazil will posses on Dassault’s new product we can infer that it is profitable for Dassault to launch their new product but in a controlled and steady manner as though it may be a growing economy it is a risky one and due to the recent political turmoil overall investments in Brazil has gone down. So recommendation will be to launch the product at an experimental basis at first and then on a regular basis after analyzing the results.

Task 2

2.1

In order to export a product to a new market every organisation has to take the help of various distribution channels according to their product. Without the introduction of the distribution channels the company will not be able to send its product to the hands of customers therefore the selection of proper and efficient distribution channel is very essential for an organization to market its product.

In case of Dassault, it needs proper and efficient channel to export its product Falcon 8x to the market. The first distribution channel that should evolve for the export of Falcon 8x shall be 3rd party distributors which will distribute Falcon 8x to the export market along with their existing products on a regular basis which will help the general customers to know about the products and once they get familiar with the product the company can directly export their products in their product line.

The most effective and efficient distribution channel which has evolved in the few past years is the m-commerce distribution channel. Due to the increased popularity of the smart phone industry and due to technological advancement in the internet world various m- commerce and e- commerce platforms have emerged as the most profitable distribution channel wherein the company can distribute their products in the m- commerce and e- commerce platforms and the customers will accept he product readily when they come to know about the additional features of the product than its competitors and which fulfils their wants and expectations towards any product.(Grönroos and Grönroos, 2016)

2.2

Reliable export channels are described to be those channels which a company can rely upon to market their products in a foreign country. Generally a reliable export channels helps the organisation to get their steps correct in the foreign market which is not known to them. A reliable export channel guides the organisation in taking the correct decision and developing the best strategy for their market. The functioning of the export channels decides the fate of the product in the foreign country. In order to find a reliable export channel in a foreign country the company needs to invest quite heavily in the foreign country keeping in view the long term benefits. A company may have to invest heavily for finalising an export channel but they have to keep in view the long term benefits as once the products starts to gain a strong foothold in the market then the initial cost of investing in the export channel will be automatically recovered as for an export channel to become reliable, the export channel needs to understand the objectives of the company and the target customers for whom the products are designed.

2.3

The export distribution channel which Dassault should use for the exporting of its product the Falcon 8x as stated above will be tie up with the local aviation company of that country as a 3rd party and to export its product via its websites which is the direct channel and also tie up with various m-commerce and e-commerce platforms to export their products.

The tie up with the local aviation company of that country which in this case is Brazil will help the company to gain popularity in the domestic market of that country. At the introductory level after the tie up with another company the company will not be able to make profits because majority of the profit and revenue generated shall be beneficial to the other company but after a certain time when the company will get an idea of the domestic market of that country and the preferences of the people in choosing a service it can directly operate through its own channel.

When the company will decide to promote its product through its direct channel which is the websites it will have to focus on its promotion to make the product more attractive in the eyes of the customers by offering various introductory facilities and discounts which will help in capturing of the market of the product.

Finally when the company decides to export its product through the various e-commerce and m-commerce platforms at a comparatively lower rate than other competitors at the beginning it will be able to create a demand of the product to the customers as it should focus on fulfilling the wants and demands of all people irrespective of age, culture, income etc.

2.4

Foreign Manufacturing and investment decisions are made considering a numerous number of factors by the company which includes economic policy of the foreign country, a large, growing and prospective market, an effective and honest government and their policies with minimum regulations from their side, reliable infrastructure and availability of high quality production factors, a strong local currency and the freedom to operate in various markets, a favourable taxation atmosphere and the ability to remit profit, dividends and interests.

In reference to Dassault which has made a decision to set up a production plant in Brazil has evaluated the above foretold factors and accordingly has decided to set up the production plant in Brazil. Firstly it focussed on the economic condition of Brazil which is a profitable one, secondly the government of Brazil is stable and is friendly towards investors as it is boosting their economy and employment rate and also the government provides some relaxation in taxation policies to the investing companies, thirdly Brazil has a skilled work force which operates at lower cost than other countries and the infrastructure which are favourable for a production process is present in Brazil and lastly the value and stability of the Brazilian currency and the freedom to operate in other countries made the decision easy for Dassault to set up a production unit in Brazil for its businesses.(Blonigen and Piger, 2014)

 

Task 3

3.1

Marketing objective Of Dassaults’s new product Falcon 8x

The marketing objectives of Dassault’s new product Falcon 8x are as follows:

· To increase the volume of trade by operating frequently in busy destinations.

· Offer a better value for money to all its customers than its competitors.

· Increasing social and cultural bonding effectively with the customers of the new market which will in turn help in improving the brand image.

· Catering to the needs and demands of the corporate sector and managing the service subsequently.

· Generate moderate revenue by operating at a lower cost.

3.2

Marketing plan- Falcon 8x should focus on developing the aviation infrastructure in Brazil which is required to for basic aviation operations and build a customer base by attracting tourists from all over Europe to prefer their services by offering various competitive advantages.

Marketing Strategy– The marketing strategy of Falcon 8x includes

Marketing Mix of falcon 8x:

Product- The product which is Falcon 8x is loaded with greater features than its competitors which includes larger cabin space, lesser fuel consumption, greater speed and so on.

Price-The fare prices of Falcon 8x is comparatively low than its competitors as they operate direct flights which help them reduce the cost of unnecessary stop overs and as the fuel consumption of the aircraft is less therefore the prices of the ticket of the aircraft are also less.

Place- In order to occupy a global position in the airlines industry Dassault has used its strategic hub location to maximize profit and also it will be operating direct flights from all the popular and busy destinations of Brazil to all parts of the globe mainly in Europe as people from all over Europe tend to fly to brazil the most.

Promotion- Promotion is a very essential element in the marketing mix of Falcon as it will be keen in gaining a strong customer base in the whole of brazil and so promotional strategies includes offering discounts to its domestic and as well as international customers to gain popularity and also offering discounts in off-seasons as well. Dassalt is also keen to promote its product by offering various schemes to its passenger in order to strengthen its customer base.

Marketing Strategy of Falcon 8x in Brazil-

The market entry method that Dassault needs to adopt in Brazil is wholly owned subsidiaries as it will help Dassault to protect its technology and will be able to engage in global strategic co-ordination. The other advantage associated with the adoption of the wholly owned subsidiaries is that Dassault will be able to realize location and scale based economy in the Brazilian market which will be vital in its growth. The only disadvantage associated with this system is that it involves high costs and high risks but Dassault should be ready to take it in order to get high rewards.

Financial strategy of Falcon 8x In Brazil:

The financial strategy to be followed in Brazil by Dassault is to keep a low and competitive fare for its passenger as its operating cost will be low in Brazil because of the decision to set up a manufacturing plant in Brazil and also due to the low fuel consumption capacity of the Falcon airliners.

Public policy strategy of Dassault in Brazil:

Dassault should adopt a sustainable public policy in Brazil which should aim at developing a friendly policy with the local human resources there and utilizing them to the fulfilling all their basic needs and demands and emphasizing on their development and welfare by giving them proper wages and following all the labour policies of Brazil.

Competition policy of Dassault in Brazil:

Dassault should follow healthy competition policies in Brazil with their competitors and ensure that do not violate the competition policies in Brazil.

 

 

 

3.3

The international marketing mix deals with the 4p’s of marketing which includes product, price, place and promotion. In order for an organisation to survive properly in the market and compete with its competitors it is essential for them to properly imply the 4 P’s of marketing or marketing mix to their organisation. The components of the 4 P’s of marketing are described as under:

Product- The product comprises of certain factors such as product variety, quality, design, features, brand name, services, size, packaging, warranties and returns.

Price- The price comprises of certain factors such as list price, discount, allowances, payment period and credit terms.

Place- The place consists of certain factors such as channels, coverage, assortments, locations, inventory and transport.

Promotion- Promotion consists of certain factors such as sales promotion, sales force, advertising, public relations and direct marketing. (Rahmani, Emamisaleh and Yadegari, 2015)

The international marketing mix for Dassault for the Brazilian market will be:

Product- The product of Dassault which is Falcon 8x is loaded with greater features than its competitors which includes larger cabin space, lesser fuel consumption, greater speed and so on.

Price-The fare prices of Falcon 8x is comparatively low than its competitors as they operate direct flights which help them reduce the cost of unnecessary stop overs and as the fuel consumption of the aircraft is less therefore the prices of the ticket of the aircraft are also less.

Place- In order to occupy a global position in the airlines industry Dassault has used its strategic hub location to maximize profit and also it will be operating direct flights from all the popular and busy destinations of Brazil to all parts of the globe mainly in Europe as people from all over Europe tend to fly to brazil the most.

Promotion- Promotion is a very essential element in the marketing mix of Falcon as it will be keen in gaining a strong customer base in the whole of brazil and so promotional strategies includes offering discounts to its domestic and as well as international customers to gain popularity and also offering discounts in off-seasons as well. Dassalt is also keen to promote its product by offering various schemes to its passenger in order to strengthen its customer base.

3.4

Brazil is considered to be one of the fastest growing economies of the world and that is why it seems to be a profitable economy to invest in but there are several issues which are making investors think a multiple number of times before investing and starting their businesses in Brazil and the main issues which come to the forefront are the environmental issues and the ethical issues which had increased manifold in Brazil. (Chonko, 2015)

The main ethical issues that Brazil faces currently are the increase of corruption in businesses and in the government system. Ethics is a very important factor for every business and violation of business ethics leads to the downfall of the organisation. Same is in case of Brazil, few companies and the government are involved in such a corruption that eventually it led to the downfall of the companies and also the government. It is very much evident from the case of Petrobras, a leading state owned oil and Gas Company of Brazil was engrossed in a corruption scandal with the government officials which eventually led to its downfall.

The main environmental issue that Brazil faces is the increased levels of air and water pollution and deforestation which has led to the endangerment of various wildlife habitats. Due to the increased volumes of businesses developing in Brazil the level of air and water pollution is increasing and also deforestation is taking place at an alarming rate to make spaces for the new emerging businesses. It is evident from the figures of the World Wildlife Fund that over 90 % of the Atlantic forest Ecosystem in southern Brazil had been cleared off to make spaces for new cocoa plantations.

As a result of the recent environmental and ethical issues in Brazil the local people are largely aware of the issues and they are protesting against the Government bureaucracy and the corruption to protect their country from being degraded through these corruptions and as a result it becomes extremely essential for all the organisations to follow the environment concerns and the business ethics in order to gain the public support. (Franks Davis, Bebbington, Ali, Kemp and Scurrah, 2014)

Suggestions on improving the ethical and environmental issues of Brazil are as follows:

· Developing various Environmental protection Laws and acts by keeping in mind the current environment scenario.

· Adoption of various environment protection strategies by all the organisations as a part of their Corporate Social Responsibility.

· Imposing strict punishments and penalties to the organisations violating the business ethics.

· Change in structure of government Bureaucracy.

Task 4

4.1

International Market planning should be monitored by every company to keep an eye on the growth and progress of their product in the market and plan future strategies according to that.

Dassault should also keep monitoring the international market of its new product Falcon 8x. While monitoring the international market Dassault will come to know about the growth and progress of falcon 8x in the market so that it can decide its next course of action depending upon that and it can also calculate the profitability index of their new product in the market and measure customer satisfaction level. If they are satisfied with the customer experiences about the product then they can stick to their basic marketing mix otherwise they have to change their marketing mix depending upon the market Feedback.

Without monitoring the international market Dassault will not be able to fix their organisational budget and the advertisement budget regarding their new product. If the product the stable in the market then they could plan their budget accordingly else they have to allocate more budget behind the advertisement and promotion of their product or to develop their product according to public wants and demands. (Schmidt, 2016)

4.2

An export channel is defined as the medium of exporting and distribution of a company’s product or service from its host countries to other countries. It is also termed as distribution channel. In other words it is the channel through a company distributes its product and services to its end customers through various mediums. The export channel is the only medium for a company to distribute its product to the customers, so the company must adopt various methods to control export channels.

The ways of controlling export channels are as follows:

· Restricting the volume of products that are being exported through the export channels. It is often safe to send lesser number of products but at a greater frequency through the export channels in order to analyse the public demand.

· Restrict the number of intermediaries in the distribution channel because that will result in the increase of the end price of the product.

· Taking feedbacks about the delivery process and the frequency of the deliveries from the retailers or some other medium who directly sell the product to the customers as it wl help in evaluating the success of the export channels.

· Appoint certain key personnel or group in the market which will keep an eye of the distribution activities of the export channels right from the beginning till it reaches the end customers and accordingly report the same to the company. (Sa Vinhas and Heide, 2014)

4.3

International Marketing contains various problems and barriers which have to be dealt properly in order to be successful in international marketing.

There are various barriers to international marketing which includes the following:

Tariff barriers- It includes taxes and duties imposed on imports. Sometimes in order to promote domestic goods and prevent foreign goods strategic tariff policies are formulated by the government in order to restrict International market activities.

Administrative barriers- It comprises of bureaucratic rules and administrative procedures which sometimes get very lengthy and complicated for an importer/exporter to follow both in guest countries and host countries.

Considerable diversities- As different countries have their different culture and civilisations it sometimes become very difficult for some marketers to customize the products according to the social culture, wants and demands, preferences, language and other barriers.

Political Instability- Different countries have different political framework with different guidelines and therefore it becomes quite challenging for a marketer to develop and import/export his product complying with the political situations in the country.

Variations in Exchange rate-Every country has its own currency with their own exchange rate according to the valuation of the economy. So at times of economic crisis it becomes increasingly challenging for a marketer to get an exchange value of the currency from the guest country when either the home or guest country suffers an economic turmoil.

4.4

There are mainly 2 types of communication which is followed in international Business with various subparts in it. The main types of communication are as follows:

(Source: Communication Theory.org, 2016)

Internal communication takes place within the organisation which involves all the person or stakeholders of the organisation irrespective of hierarchical structure. It includes top level management, employees, lower level workers etc .Depending upon the organizational hierarchical internal communication can be divided into:

Upward communication- When the communication flow is from the subordinate level to the superior level it is termed as upward communication.

Downward Communication- When the flow of communication is from the superior level to the subordinate level it is termed as downward communication.

Lateral communication- When the flow of communication is between subordinates to subordinates or from superior to superiors it is termed as lateral communication.

External communication takes place between the organisation and with the people and resources outside the organisations such as vendors, sellers, banks etc.

In addition to these there are several other methods of communication depending upon their usage such as formal, informal, written, oral, electronic communications etc. The applying of the communication methods depends upon situation and to whom it is communicated. If the communication is to superiors t is communicated in a formal, verbal, written and oral manner whereas in case of sub ordinates it can be informal, non verbal or in a grape vine manner.

 

Conclusion

From the above report it can be concluded clearly that the international marketing is a very large aspect from the company’s point of view. Before deciding to go for international marketing about their products the company must analyse on certain aspects such as the profitability of the market it wishes to enter, the economic stability of the market, factors affecting that particular market which it wishes to enter and the return on investments it is going to get after investing in that particular economy. After focussing on these factors the company must develop an international marketing mix of their product, select reliable export and distribution channels and formulate effective strategies for operating in that market. After the fulfilment of all these factors the fate of a particular product is decided I the market.

Bibliography

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