Table of Contents
Executive Summary
The
assignment includes the Dixson Retail Group analysis and approaches leading to
extend business. With the passage of time, thins have been changing drastically
and an organization need be in the market for its survival and progress. There
are certain facts and threats need to be focused to have positive impacts in
the organization. Strategy development is needed in this regard as a result to
have successful results. The vision of the organization includes “people to
make better informed choice before spending their money”. We also will take
action to narrow the gap between customer and producers/services providers. Our
mission is just to help people and companies to share information. To be the
leading provider of opinion based platform.
Therefore,
the sector of Dixons Retail Group is analyzed to identify how it is going on
the current periods in different economies around the world. Since the market
has growth in diverse terms, the financial statistics prove that organization has
been performing in the international market. The customer relation building
truly depends on the marketing department and the higher management; they have
to play an immense significant role in making the name of the company. Critical
points as population and economic statistics were described and discussed to
give to the reader an impression about the current situation of the German
economy. Also, the potential growth over time was evaluated based on actual
data and outlooks.
Likewise,
the region, which in this case is the European Union, was evaluated through its
main population and economic statistics. The objective here is to identify if
the potential growth of the foreign economy where the company will be
established. This is important to understand since in last couple of years,
Germany, England and France saw their growth perspective as compared to
countries like Portugal, Spain and Greece. It is important note that making
healthy relations with the foreign countries displays well on the
organization’s performance.
Finally,
the mode of entry to the German market was deeply described, evaluated and
recommended, based on theoretical concepts which help to identify the critical
points when determining the best-suited association type -if any-, in order to
satisfy and make easier the task of the company on reaching its objectives and
goals.
Introduction
Today’s
economy requires companies to adapt as fast as it goes as time is being running
out and policies are being altered, companies have been changing throughout the
years, even big companies as Kodak, Polaroid and Daewoo, have seen most of
their operations fail in past years (Cohen, 2005), then the today’s companies
must look not only for expansion, also for knowledge and the best practices to
allow them to generate constantly competitive advantage. Therefore, how the
company is organized will determine its effectiveness to identify and work on
critical areas to generate advantages over the competitors.
The
entry mode on a foreign market is basically this, identify and develop the
company on the best way which allows it to adapt and act efficiently and
effectively to maintain a top of the competitiveness. If the company is not
established in the right way, the company can’t take decisions, implement
procedures, sign contracts and satisfy its clients successfully. Some steps
were recommended at the final of this project to ensure a correct application
of the entry mode. Organizations that are in the business by developing healthy
relations with their associates, they always tend to maintain those dealings to
progress more in the future time. The established associations would benefit the
employees as well as the management in order to accomplish the tasks and
motives.
MNE Analysis
The
main task here is to identify the strengths and weaknesses of Dixons Retail
Group, this is important to understand because it would directly impact on the
company’s performance and reputation. Strengths that are working or not working
together in different areas shall be addressed to get an effective synergy on
the activities. Weakness of the organization have to be identified so that it
could be further improved and performance of the organization could be triumph
and immense (Lloyd, 1998).
Strengths
A
market is defined as group that has buyers and sellers. They do trade and earn
revenue. When a business is running and in progress then for good outcomes
there has to be distribution of the strategies. For example the information
regarding the specific consumers must be considered and noted, effective
branding technique will help to expand the business, and it will provide
easiness for targeting the consumers as per their requirements. Occasion
segmentation is dividing the market into groups on the basis of the different
occasions when the buyers plan to buy the product. Benefit segmentation is
essentially dividing the market on basis of the characteristics or features of
the product or the service as perceived by the customers. In a scenario when
there is Christmas day, would will do shop a lot, now it is the duty of the
marketing department to collect information that what the consumers are going
to be purchasing. Wide range of products, it gives the company the opportunity
to reach all the niche-markets by age, social status, sex, education, etc (McDaniel,
1998).
Weaknesses
The
weakness includes as:
•
lack of managerial back up
•
lack of diversification of the product
•
low number of stuff many impedes growth
•
brand
- we are new entity that provides absolutely new service to advertising
agencies and marketing departments
•
lack of strong advertising campaign
Sector Analysis
Dixons Retail plc is a specialist
electrical retailer and services company, which sells consumer electronics,
personal computers, domestic appliances, photographic equipment and
communication products. The Company sells its products stores, over the
Internet and by phone, also it undertakes business to business (B2B) sales and
services. As of April 28, 2012, the Company operated over 1,200 stores in the
UK, Ireland and 10 other European countries using a number of established
brands, including Currys and PC World in the United Kingdom, and Elkjop in
Norway, as well as multi-channel Internet operations under these brands (Reuters, 2013).
This Company belongs to the sector
Consumer Discretionary, industry Retail Discretionary and, sub-industry
consumer electrical and Apple. Stores. Is important to mention here that this
sector encompasses those industries that tend to be the most sensitive to
economic cycles (Fidelity, 2013) then, if the task is to evaluate
the entrance of the Company into a market, the first issue should be to
evaluate in which stage of the business cycle is that country’s economy. Now,
this sector has a good performance pulled by the rally of the S&P (Standard
and Poor) 500 which has reached its highest level ever month of November 2013.
The following graph shows that this industry is growing faster than the index
cited which is expected since as mentioned before; it is too sensitive to
business cycle.
Source:
(Fidelity, 2013)
The comparison explains the
difference between performance and BMI consumer discretion. At the end of
month, Industry performance has shown a higher rate as compared to BMI consumer
which proves the industry demands and supply.
Source:(Bloomberg BusinessWeek, 2013)
Source:
(Bloomberg BusinessWeek, 2013)
In the case of Africa &
Middle-East, this sector is not performing as is expected, it is below the
perform of the S&P for Africa & Middle-East, it could be product of the
oil-dependence of the economy which is characteristic of those countries. In
the initial of Sep 2013, industry performance was less but after the passage of
time in Nov 2013, it was raised to more than 10% as expected.
Country Analysis
As
Europe's largest economy and second most populous nation (after Russia),
Germany is a key member of the continent's economic, political, and defense
organizations, it is which determine the trend of any aspect in European Union.
Irrespective of the geographic location, customer is attracted towards the
brand if there is proper segmentation. Segmentation refers to distribution of
products as per the demands of the customers and market. Since the population
is the number 17 in the world ranking with 81,147,265 people (Patton, 1995). The
advantage in this scenario refers to the fact that the customers have the
tendency to purchase the products offered by the market that engulfs the
business shared in the market by stake holders.
Another
important factor is the German economy - the fifth largest economy in the world
in PPP (Public Private Partnership) terms and Europe's largest - which is a
leading exporter of machinery, vehicles, chemicals, and household equipment and
benefits from a highly skilled labor force (Gentle, 2000). Likewise, the GDP is
one of the biggest in the world number six in a world ranking at US$ 3.25tn
and, as a result of its sustainability; the growth rate is at 0.7% annual,
typically number for stable economies. The GDP per capita is also one of the
greatest at US$ 39,700 and number 29 in a world ranking which gives us a good
input when evaluating the purchasing power of its population (Gentle, 2000).
A
final important issue is the fact that the higher contribution to GDP comes
from services, which represents 73.8% of the total, the inflation rate is stable
and not one of the highest. It is at 2.1% which is good for the company since
it means stability over prices. Moreover, the lending rate is one of the lowest
and number 169 in a world ranking at 3.07%, another important factor for the
company and its borrowing needs (Chandler, 1998).
Analysis of Regional Organization
European
Union (EU) established a new currency, the euro, it was launched in world money
markets on 1 January 1999; it became the unit of exchange for all EU member
states except Denmark, Sweden, and the United Kingdom. In 2002, citizens of
those 12 countries began using euro banknotes and coins. Ten new countries
joined the EU in 2004.
Regarding
to the population, as with Germany, most of them are in the range is according
to the company public objective that includes the consistent enhancement of
revenue and performance. Also, another good advantage here is that EU has a
unique supranational law system, it means that the company does not have to
adapt to different legal systems in any county of this group, then it
represents save on time and money (Gentle, 2000).
As
a group the EU has the highest GDP in the world at US$ 15.97tn, with a GDP per
capita at US$ 35,100 which gives the company a good starting point when
evaluating the purchasing power of the population. Likewise, the household
consumption is the highest contributor to the total GDP, which represents the
58.2% of the total, higher the consumption, higher the potential income for the
company. Regarding to the labor force it is concentrated on services sector
with 71.8% which means will be easy to find labor supply. As a group the
lending rate maintains as one of the lowest at 5.9% and number 121 in the
world. Finally, regarding to communication, there are more than 226mn and 629mn
fixed and mobile lines operating which represent easiness to manage the company
in any aspect.
FMSS, Mode of Entry: Analysis and Recommendation
For making an entry in the market,
it is really necessary to get to know the basic demands and requirements. A
market is defined as group that has buyers and sellers. They do trade and earn
revenue. When a business is running and in progress then for good outcomes
there has to be distribution of the strategies. For example the information
regarding the specific consumers must be considered and noted, effective
branding technique will help to expand the business, and it will provide
easiness for targeting the consumers as per their requirements. The
competitiveness in the market proves that how an organization is capable enough
to vie with others. The resources of the company proves that how much is it capable
of facing the business hardships. The recommendations could be proposed
regarding the market capture as Germany is one of the biggest opportunities
regarding the business marketplace. More is the probability of making business
in the specific region by fulfilling the demands of the customers.
The exporting mode, which is a low
resource since it represents low investment and consequently low risk-return
alternative. This mode, while providing a firm with operational control, lacks
in providing marketing control that could be essential if the company wants to
earn market-share. In this case, this could not represent the best alternative
available for Dixons Retail Group because, as mentioned before, Germany is a big
market where the most of the population are in the public objective range age
that makes more probability of sales in the market industry. If the company
decided just to export to Germany the products, it might not help to earn on
market-share, since only few people could reach the brand and its products.
The sole venture mode, on the other
hand, is a high investment and consequently high risk-return alternative that
also provides a high degree of control to the investing firm. It could be a
good choice for Dixons Retail Group, as long as they have presence in 10
countries in EU. To introduce the brand to this market requires that the firms
counts with its own central office, support and client service branches, stores
for the products to be sold and delivered and, other requirements that the
company could establish under this kind of contract.
The joint venture mode involves
relatively lower investment and then provides risk, return, and control
according to the extent of equity participation of the investing firm.
Regarding to this kind of society, the organization should extend its business
by making joint ventures with various organizations and associations, different
kinds of Joint Venture. As Joint Venture requires different investment capital,
number of directors, number of German citizens directors and managers, which
determine the control over the company. It is recommended to hire the services
of a local company specialized in the German Civil Code in order to determine
the most convenience for the company’s Interests. Moreover, it could be a good
choice since it allows the company to get financing either from selling shares
or debt, which represent cheaper financing sources. When the company is dealing
well in the credits and debits, means in auditing and financing. All the company’s
proceedings would be carried out well and faultless.
Finally, the licensing mode is a
low investment, low risk-return alternative which provides least control to the
licensing firm. It could be a good choice if the companies wants to take
advantage of the already established local firm and its operations, public and
distribution channel but, the problem with this kind of contract is the fact
that the company will have less control over operations, the know-how of the
company will be difficult to transmit to the local firm. However, it will be
easier to access the local market knowledge and respond to its needs (Aguilera,
2006).
From the above described, is
deducible that to establish a specific kind of company in a foreign market, if
the threats and risks are eradicated well from the business plan then there are
more chances of getting the most convincing results. Then is important to have
cleared the differences between advantages or disadvantages for the ownership,
location and internalization.
Implementation
of the plan
Our implementation plan will have
two main activities:
• Organizing
– includes organizational structures that manage implementation.
Because of the number and diversity
of marketing activities, firms must develop make clear who will carry out the
marketing plans and what the reporting relationships among managers and other
employee will be.
• Executing-
each employee/team must execute its assigned tasks in an effective and
efficient manner to make the marketing plan to work. Executing activities will have the following
characteristics:
a. Must
be goal and objective directed
b. assigning
resources to facilitate performance
c. Effective
and efficient coordination of activities--who's doing what and by when
d. Attention
to detail.
e. Accountability
for the assigned and done tasks.
Marketing resource management
provides a set of applications that automate and integrate such activities as
project management, campaign management, budget management, asset management,
brand management, customer relationship management and knowledge management.
The knowledge management component consists of process templates, how-to
wizards and best practices.
Marketing
Plans Failures
There are certain points that must
be considered in mind to make sure that our companies Otzivi.bg make success in
business. There must a valid point that the plan was too quickly prepared. It
can be attractive to move quickly through the steps in the marketing planning
process and to simply identify a number of actions that need to take place,
often based on activities that have taken place in the past. Another reason
could be the misuse of data, as it was not effectively in the marketing
planning process. While there is certainly some ability involved in the
marketing planning process, original accepted wisdom does not mean ignoring
context that can impact decisions. There could be another reason of failure
that could be the time consumption and less significance. The aptitude to put
into practice is not present. Preparation is one thing. Execution is fairly one
more. A well written plan is worthless if the organization does not have
ability or wish to put into practice that plan. There is no promise to the
plan. Broad involvement in the marketing planning process can ensure that
organizational members necessary to help achieve the plan are committed to its
implementation.
Apart from that there could be many
reasons that for facing the failure.
·
Lack of Commitment
·
Lack of accountability
·
Irresponsible behavior
·
Time Negligence
·
Proper and timely execution
·
Lack of confidence
Evaluation
and Control
In
order to execute set goals in the marketing plan, the following approaches will
be adopted:
• Monitoring
procedures and techniques
• Progress
reports
• Time
line outcome measurement procedures
Management would track efficiency
of the strategy by determining the following criterion:
• number
of unique visitors of the website and their daily behavior in order to plan
addition changes in functionality
• number
of possible long term partnerships,
• results
of advertising campaigns, promotional and public relations related activities
Conclusion
Since
the market analyzed has been Germany, there are many points of critical
evaluation the company could except from its study of this, for example, the
risks related with changes in the government does not apply here because
Germany is a point of reference when talking about democracy, infrastructure,
knowledge advances, economy and between other important points regarding to
this topic. Then, the steps mentioned at the end of the FMSS analysis,
described well how the company should do to enter into this market, the
critical points here are related with the civil contract when establishing the
company.
Furthermore,
this shall be well-defined because it will limit the company’s scope in the
market when start to operate, a bad election in the contract, could mean
restrictions for getting capital to financing its activities, restrictions over
the policies on sales, purchases and changes on the board of directors, even
restrictions about the process of taking decisions inside. That is why, a
well-established plan with future scenarios must be developed to identify
possible gaps not taken according to the company objectives, expectations,
goals and requirements too, for example, the company is trading in London Stock
Exchange, if they wanted to do the same in Germany, they might choose carefully
the new society which allows them to do that.
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