QUESTION
PACIFIC BRANDS
Rapid advancement in technological aspects, increasing need and requirement of international trade and investment, growing wealth and relationship between countries, and the change and diversification of consumer tastes and preferences are forcing the businesses to expand globally in a strategic and tactical way (Javalgi &White, 2002). Here in this case, Pacific Brands the same this is happening. As a Chief Executive, I can foresee the future opportunities for the company if we expand to the global market and mostly to the developing counties like China and India. They are one of the fastest growing countries and there are lots of chances and opportunities of growth in these markets.
The global economy and their huge perspective is also encouraging the companies to go globally to make a good contribution to the world economy (Czinkota & Ronkainen, 2002; Rugman, 2001; Yaprak, 2002). Pacific Brands are doing really good in Australia and New Zealand and one of the largest selling everyday essential brands. It can be their strength to grab the global market with this kind of strategic approach which by which they have acquired the Australian and New Zealand market so effectively.
Our advantages and strategies that can be used as the strength to analyze and enter into the global market are as follows:
1. Largest brand in daily essentials in Australia and New Zealand: As Pacific Brand is one of the best selling daily essential brand in Australia and New Zealand, so this can be a strength point for them to make a good start in the global market.
2. Commitment towards their objective i.e. to gain market leadership: We are working with a common objective i.e. to gain market leadership. So this will again be a strong and motivating point for us to establish our brand in Chinese and Indian market.
3. Immense opportunities in the retail market to the developing countries: There are huge opportunities and demand for the retail market and daily essential products in the developing counties and India is really a diversified country and there are great chances of success of these kinds of retail market.
4. Analysis of the global market: Before entering to the market, deep analysis of the market is required. So to make and strategic move, we will be going through a deep market analysis of Chinese and Indian market. This will make us more clear about the cultural and social diversity in these countries and that will lead in making better strategic planning while entering to the global market.
5. Risk Analysis: Risk factor will always be associated with this expansion. So we need to be ready with the risk analysis and crisis management perspective.
These are the most important factors that will really support in making strategic analysis and considerations while entering to the global market such as China and India.
Woolworth’s – Dan Murphy’s
Dan Murphy’s as the biggest retail wine store in Australia and New Zealand is having a good strategical view to enter into the Chinese and Indian market. As these are the fastest developing economies and the consumers are ready to expend money on these aspects. They can be a good changeover of the pubs and bars.
There are various aspects that need to be taken care while going global such as,
1. Effective market research: According to Craig and Douglas (2005), effective market research is an essential and effective tool for developing strategy in a rapidly changing and expanding global marketplace. So we will be going through the market research for the better understanding and estimation of the global market and to make a strong strategy to enter in the global marketplace.
2. Cost considerations: It has been estimated that it costs around six times higher to make a new customer as to keep an existing customer (Reichheld, 1996). So we need to consider the cost aspects while entering to the global marketplace. Although the China and India has a cheap labour base, so it will be easier to manufacture the product in these countries and also the availability of the cheap labour will help expanding the service industry in these markets.
3. Demand of consumer: Due to increase in the income level the consumers are rapidly moving towards the upper segment category and their living standards are also changing. So it can be used as a strength point for the global expansion of Dan Murphy’s in Chinese and Indian market.
4. Competitor’s analysis: There are various pubs and bars are there in these markets. So before entering we need to do competitors analysis very well. This will help in strategic formulation while entering to the global market.
5. Cultural Diversity: Cultural elements such as cultural diversity, social notions, age, income, ethics, values, beliefs and other cultural aspects are intertwined with national culture (Javalgi & White, 2002), and it has a major effect on the acceptability of the products and the services offered by the global market players.
These are the most common and required aspects that must be taken care while entering to the global market. Although we are a famous brand in Australia and New Zealand but this is not necessary that the same strategy and consideration will surely work to the global countries. So it is better to go through the research and then only we should select the perfect market for the global expansion.
James Hardie
James Hardie is one of the leading Australian building material companies, publically owned and also listed in the Australian stock market. This can be used as one of the strongest point for the company while entering to the global market. Connell (2002) states that, in the business-to-business market, i.e. Cement industry (B2B), there is a need of design, execution, and interpretation of a wide variety of global marketing and branding strategies for the effective market positioning in the global market. While selecting and entering to the global market, we require various steps and approaches such as;
1. Infrastructure and real estate is one of the most emerging markets in developing countries: In developing countries, infrastructure and real estate are the most emerging and booming sectors and they are based upon these building materials for the construction. So this can be one of the strongest points for us to enter into the global market and mostly to these developing countries.
2. Brand name: James Hardies is one of the well known and brand name in Australia, New Zealand and US market with various other presence in the global market. So this can be used as a reference for the brand development and expansion to the new market.
3. Technological considerations: James Hardie is using a different and updated technology for the better product development and the fibre-cement manufacturing. This can be again a biggest advantage for them to introduce themselves as one of the most techno based company to manufacture the fibre cement. This will be helping them further to establish in the global market such as China and India.
4. Global presence: James Hardie’s global presence is already known by various countries such as USA, Philippines and Chille. So they are known with the global strategies. That can be utilized and used to further move to the Chinese and Indian market.
These aspects will be helping the company to expand further in Chinese and Indian market. Although the Indian market is tapped with the various market players like JK Cement, Ultra-tech Cement, Birla Cements and many more. These are the local market players. So it will be tough for the James Hardie to enter and establish them in the Indian market. But there is always a space between the gap, the only thing is to find out the way to move inside the gap. The technological advancement can be used as the strongest point to bridge the gap.
Rebel Sport
As Rebel Sport is one of the biggest brand in the sporting and leisure equipment in Australia, so it is again their biggest advantage to make a move towards the global market. If we talk about the Indian market, they can be one of the best and demanding marketplace for Rebel Sport. The main reason is the increased demand of Cricket and other games in India. IPL is introduced in India and every year it is being conducted in India. The common wealth game was also held in India in 2010. These aspects reflect the great opportunity for the Rebel Sport in Indian market. Same strategy can be used with the Chinese market because they are also very much indulge in gaming and sports.
Companies that are global or those which are going to become global, they should closely to the world marketplace to understand and seek the global opportunity present (Jeannet & Hennessey, 2001).
Various aspects that can be further help in the global expansion are as follows;
1. Strategic considerations for the better understanding of the global market: To understand the global market where we are entering is very much required. This will help us to understand the customer need and requirement. That will further help in estimation of the future opportunities.
2. Brand promotion and building strategies: Brand promotion and brand building strategies are also required to make a strong entry in the global market. This will help in the brand recognition in the new marketplace. The strategies can be like quizzes, road shows, stages shows, audience polls and many more.
3. Demographics analysis: Demographic analysis is very much important in the estimation of the requirement and necessity of the sports and games among the youngsters and other age groups. This will help in understanding the market need and demand among the people of the country.
4. Competitors analysis: The existing market players will always be a hurdle for the new market players. So it is better to do competitors analysis to understand the competitors strategies and this will further help in making new and effective strategies.
These are the various aspects that are required to be analysed effectively before making strategies for entering into the global market like China and India. In developing countries we need to keep a close eye over the customers need and demand and mostly to the current demands which is existing currently. This will help a lot to enter into the market.
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Reference List
Javalgi, R., & White, D.S., 2002. Strategic challenges for the marketing of services internationally. International Marketing Review 19 (6), 563–581.
Czinkota, R.C., & Ronkainen, I.A., 2002. International marketing. Fort Worth, TX: Harcourt College Publishers.
Craig, C.S., & Douglas, S.P., 2005. International marketing research (3rd Ed.). Wiley, New York.
Reichheld, F.F., 1996. The loyalty effect. Boston: Harvard Business School Press.
Jeannet, J.-P., & Hennessey, H.D., 2001. Global marketing strategies (5th Ed.). Boston: Houghton Mifflin Company.
