Choice of Market

Question: Write an essay on Choice of Market, Timing, and scale. Answer: For being valid in the long ran, it is a prerequisite for every company to expand its market operation. As opined by Wang and Lestari (2013), a favourable market must possess The stability of the government, the overall satisfaction of the citizens with the public order etc. it is also important for the companies to invest in such economies which support the free market system. They introduce laws favourable to the business operations. The lack of regulations on the business operation makes the capitalist countries more favourable among the business houses. The low private sector debt and the low inflation describes that the economy is strong enough to handle the volatility of the business activities. On the other hand, the economies, which are facing political instability, i.e., war, internal revolution, terrorism etc. can pose threat to the business operation. the countries which have controlled economy and public surveillance over the business operation should be avoided by the in vestors (Tolsma and Wolbers 2014). The countries, which are suffering huge public debt, cannot be able to offer a strong customer base to the companies. The instability of the currency can become negatively influential to the companies. The economies of Denmark, New Zealand etc. can be identified as a strong and flexible for the business operators. The recent changes in the Indian economy regarding foreign investment is becoming helpful for the companies with the intention of foreign investment (Schuster and Holtbrgge 2012). On the other hand, the recent case of Brexit can be discussed as a detrimental fact for the foreign investors. this may pose threat to the foreign business of UK (Fletcher 2016). The countries like, Greece is facing a huge public debt, which is restricting the companies to invest there. The countries like, Saudi Arabia, Iraq etc. are facing issues like terrorism, civil war etc. which are affecting their potentiality of grabbing foreign investment. It is importan t for a company to expand its operation in those markets, which are offering them these above discussed advantages. An economy, which is offering a favourable business environment, can best be utilized for the decision of the market expansion. The market entry can be of three different patterns. The first movers can be identified as companies, which enter a foreign market before other companies. The advantages of such entry can be discussed in a number of ways. This helps the companies to capture the demand and establish the brand name. They also have the opportunity of creating the barriers to entry (Fabling and Sanderson 2013). On the other hand, the companies face high cost of pioneering the market, regarding technology, RD, marketing initiatives, est6ablishing the distribution channels etc. such companies need to carry the burden of risk of market failure. In this regard, the name of Digital Research can be mentioned. It was the first mover in the market of personal computer operating system which faced a market failure. On the other hand, the Polaroid gained the advantages of a first mover in the market of instant camera (Schuster and Holtbrgge 2012). The early followers can be identified as the companies, which follow the pioneers in the market. They enter in the market in its initial stage, without much knowledge of the market status. Here, the example of Kodak can be cited it was the follower in the market of the instant camera. Apple can also be identified as the early follower in the market of personal computer (Shaw 2015). The late entrants are the companies, which enters in the market when it is significantly mature. They enjoy the power of information in operating a business. Here, the example of Samsung can be cited as the late entrants in the market of microwave (Wang and Lestari 2013). A company may opt for the large as wel l as a small-scale market entry strategy. However, this requires a rapid entry in the market. It makes the company responsible to bear the new market threats. It restricts the strategic flexibility and makes it harder for the companies to operate. On the other hand, the small-scale entry helps the company to learn market status and develop the strategies accordingly. It enjoys the strategic flexibility (Shaw 2015). It also restricts the company exposure and thus limits the threat. Hence, it can be recommended that the companies need to follow a small-scale entry approach while making a first move. Here, the example of Tesco Plc can be cited. They have spent a billion to acquire the Chinese mobile market operations. Because of the lack of cultural knowledge, it faced a failure. On the other hand, the small-scale entry of the Generalli group in the insurance sector in India has helped them to acquire great market profitability (Xiong 2013). Hence, it can be concluded that the companie s need to collect enough information regarding the host market. To acquire this knowledge, the companies need to operate on a small-scale level. After acquiring the needed data, the companies may follow the strategy of large scale operation. Explain Marketing mix The idea of marketing mix can be identified as the components of a company for seting the policies strategically for its successful operation. As opined by Huang and Sarigll (2014), it is important for the internationally operating companies to pragmatically identify the marketing mix. The marketing mix, popularly known as the 4 Ps of marketing, are the interrelated components of the policies. As opined by (), it is a set of analysis of the product attributes, distribution strategy, communication policy and the pricing strategy of the company. Explain the 4Ps of marketing mixAs opined by Aghdam et al.(2015), product is one of the important components of the marketing mix. A company needs to identify the product or service strategically to avoid the market failure. Here they need to explore the market demand locally and outside of the country and develop the product according to the market demand. On the other hand, it is also important set pragmatic distribution channel of that parti cular product. The idea of place in the marketing mix is the way of having access of that product by the consumer. Here, the company makes its products available with the help of the retailers or the company outlets or simply through the web sources. On the other hand, Mintz and Currim (2015), has described the idea of promotion in the context of the communication channel of the company with its consumers. As discussed by Gordon (2012), with the help of the personnel selling (push strategy) or the media selling (pull strategy) the company can promote its product. The pricing strategies may include the strategy of price discrimination, value pricing, penetration pricing etc. this review of the price also include the evaluation of the regulations of the state authorities, as it affect the pricing decision. Thus, it can be said that, the companies need to alter their marketing mix in accidence to the internal as well as the external environment. There are a number of options within the marketing mix. A company may select pragmatically according to the market scenario. Ethnocentric approach Obtaining a practical staffing policy helps a company to attain a high competitive advantage. One of the main approaches of staffing is the ethnocentric approach. As opined by (), it is appropriate for the international companies to fill the significant management positions with the parent country nationals. It helps the company in transferring the core competencies to the new operating market. It also assists the new entrants in overcoming the lack of qualified personnel in the host nations. However, as mentioned by (), this approach has a few disadvantages too. It produces resentment within the nationals of the host countries. This may lead the company to face a cultural conflict. Polycentric approach As mentioned by Wang and Lestari (2013), the polycentric approach can be utilized in the context of the localization of the companies. Here, the companies follow the strategy of recruiting the nationals of the host country in the management of the subsidiaries in the host countries. The parent country nationals hold the position in the head quarters. As discussed by Tolsma and Wolbers (2014), this strategy helps the firms in localization of the branch as thus avoiding the cultural conflict. It also helps the company in internal cost cutting. However, according to Fabling and Sanderson (2013), this particular approach create a gap between the management of the subsidiaries and the head quarter of the company. As, the host country nationals get the limited opportunity to gain the required experience, it restricts their progress within the subsidiaries. This in turn, affects the company negatively. Geocentric approach: In addition to this, the geocentric approach ignores the nationality concern in favour of the ability of the staffs. It advocates the4 recruit of the best person for the job to perform. It helps the company in avoiding the potential drawbacks of the previously discussed approaches. It helps the multinationals in creating a global integration (Tolsm and Wolbers 2014). Thus, it can be concluded that the companies, which have a vision of operating an international business, should go for the geocentric approach. It can be termed as global business policy of most of the successful MNCs. It helps the companies to gain a competitive advantage. In the recent context of global migration, the companies may utilize the opportunity of recruiting the best-suited person in the chair for the companys further excellence with this approach. References: Aghdam, P.F., Saeidi, S.S. and Marjani, A.B., 2015. Investigating the effect of service marketing mix on increasing the sales in Special Cooperative Company of Iran Khodro. Journal of Current Research in Science, 3(3), p.47.Fabling, R. and Sanderson, L., 2013. Exporting and firm performance: Market entry, investment and expansion. Journal of International Economics,89(2), pp.422-431.Fletcher, N. (2016). Post-Brexit crisis, what crisis? The FTSE 100 is roaring ahead. [online] the Guardian. 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