International Business Market Entry Strategies

Question: Describe about the International Business for Market Entry Strategies. Answer: Market Entry Strategies Here, the market entry strategies of Cibo Expresso coffee branch to China is discussed. The market entry strategies are based on the principal leadership, marketing as well as human resource management issues. Each of these three market strategies is described below: Leadership First of all, the leaders of Cibo Expresso needs to follow up some basic strategies to penetrate the market of China (Schorsch, 2009). They need to reduce the price at first, which will help the organization to enter a present market. The introduction of a good at a minor price than the leaders, a latecomer can fascinate fresh, and new customers who would not have otherwise buys the particular product. Subsequently, the entire market is expanded. The reduction in price can also induce the current clients of the leaders to switch (Kenneth Shaw, 2015). After all these, this strategy gives an outcome in abridged margins for the fresh entrant equated with the other players in the China market. Secondly, the leaders can engage themselves in improving the service or product of Cibo Expresso by focusing on a niche market. The organization needs to innovate itself to compete with others. The innovation may be incremental or radical. On the other hand, the leaders can advance new channels of delivery for accessing new markets or better penetrate the current ones (Lymbersky, 2008). Globalization is not a solution. First of all, they need to grab and compete well in some areas of the world. The leaders are crucial for marketing strategies because they launch a presence in the marketplace. They also build the equity of the brand as well as create a brilliant supply network system. The clients become used to improve the analysis over time. Therefore, the fresh entrants have to capitalize considerably for achieving the same coverage. Leaders are very useful in controlling the ideal sites, build the loyalty of the brand by proposing the superior customer service (Kotler, Keller, Lu, 2009). They are also helpful for fastening in clients by promoting apparatus for a prolonged period under fixed-service agreements. Gaining control of the key channels of supply is their role in market strategy. Marketing The challenge to enter the China business sector way has turned into an inevitably critical one of Western companies of all sizes and shapes (Kretzberg, 2008). With the country ready to overwhelm the United States as the second leading international economy by 2020 and assured to continue a motor of global expansion for the subsequent decade, observing how to enter substantial and sophisticated business sector has gotten to be fundamental to most organizations in the business-to-business circle. Although a difficult financial environment in Europe and the United States, the economy of China has kept on developing by dual digit rates in the progression of the past couple of years. Cibo Expresso needs to identify the market at first. China has the populace that exceeds 1.3 billion people, and it has a land mass larger than the United States. China represents an enormous potentiality in a market for foreign manufactured products and services (Succeeding in China, 2010). So, Cibo Express o has a way to enter. The recommended cities for Cibo Expresso are Shanghai, Beijing, and Shandong. Shandong is best among all since this town has industries like foodstuffs and oils. The other two cities are the automobile and IT based. After a long working day, the workers can relax and enjoy the coffee of Cibo Expresso. On the other hand, the company needs to concern with the Government regulations and policies of China (Low, 2007). Sometimes China severely restricts foreign businesses to get involved in the field of telecommunications, petrochemicals, and energy. Therefore, Cibo Expresso must not worry about the entrance problems. Regulations are becoming more rigorous. The company also needs to perform a market research which will help to find and hire staffs from the corners of the country. Cibo Expresso can make full use of technology regarding customer service and manufacture of products since the country is full of technologists (Kllezi, 2013). Besides, the company can utilize the marketing mix such as price, promotion, place and product as their ideal market entry strategy. Additionally, Porters Five Force Analysis along with SWOT/TOWS Analysis or PESTEL Analysis can be utilized by Cibo Expresso as a strategy to enter the market of China. Human Resource Management The human resource department of Cibo Expresso must use the transnational approach as their market entry strategy in China. A transnational approach involves the global strategies, coordination of operations and utilizing extraordinary benefits of nearby markets to drive deals, part of the overall industry and development of profit (Dickmann Mller-Camen, 2006). Stonehouse characterizes transnational key administration as cycles of authentic learning and execution upgrades. The transnational methodology includes working in various world markets, outlining responsive authentic structures and building up worth included exercises that endeavor national similarities and contrasts. The establishment of a transnational system is a worldwide vision, however with redid executions for nearby markets and areas (Kogetsidis, 2012). In human resource writing, various models and methodologies attempt to show how a key way to deal with the human resource can be interpreted into an arrangement of Co gnizant HR procedures and practices. Be that as it may, they are centered on the improvement of human resource processes with an understood suspicion that the association is moderately self-governing in building up its methodology. However, in people in an overall area, the technique of human resource is not self-governing and needs to check a scope of various partner points of view and to be engaged at the national level along with lower nearby level. These models have esteem in highlighting some central issues and showing the significance of a critical methodology. As indicated by the review results, procedures of human resource are adjusted to administrative methods, supporting to a particular degree the hierarchical changes. Moreover, the strategies of human resource are associated with the government policies (Dessler, 2008). The function of a human resource does not anticipate on its agenda significant economic and social changes. The human resource has the strategies to outsource service and make use of human resource information technology to grow the business in future. Consequently, the human resource department is enhanced and leads to a reduction of cost. Legal The legal system of China regarding e-commerce is still in its early stage. The nation has low experience for enlisting e-commerce legislations for subjects such as tax, right protection as well as intellectual property. So, it better for Cibo Expresso to look after the legal system of China and proceed their marketing system according to it. Over the past few year, the Chinese government started focusing on the improvement of e-commerce. Therefore, the organization has an opportunity to apply e-commerce marketing strategies. IP Protection The organizations that are operating their businesses in China have to concern with the protection of intellectual property. In order to protect intellectual property, a strategy is needed to conduct an initial audit of the organizations China operation. It is needed for determining the intellectual property risk and intellectual property assets. The organization must regularly communicate the value of protection of intellectual property. Clear steps should be taken to manuscript the IP protection efforts and policies of the company. Logistic Logistics is a significant department of every companies. Without logistics, the organization cannot export or import their products. For the transportation of products, Cibo Expresso needs to make a pact with the Chinese government so that the organization can get transport license and product carrying vehicles. It is an advantage for Cibo Expresso that they can get high technological based vehicles from Chinese government if they demand. Localization of products First of all, Cibo Expresso needs to improve the quality of products. After that, the products of this organization will become known to everyone. The company needs to increase the brand value of the products. When the brand value will be increased, the people will automatically locate the shop. Localization of products needs a proper branding strategy in order to spread to the citizens of China about the product quality. On the other hand, the organization must stand out from the competition. The local markets of China is saturated with competitors. Cibo Expresso must think differently from others in order to compete in this saturated competitive market. Environmental The company needs to implement corporate environmental strategies. The strategies include recognition of global environmental trends at early stage and change the plan of the company accordingly. However, they need to improve future corporate profitability. Aside that, the company need to adopt a creative and proactive approach to ecological challenges throughout the association. Cibo Expresso can also minimize the risk which arise from management issues such as liabilities of the product and sudden change in legal system. Ethical and Social Responsibility Social Responsibility is a significant role of an organization. The coffee company needs to create and develop a community. The business needs to set up a foundation in order to assist in learning or educating people about heath, food and living. It will boost up the reputation of the company and also increase their brand values. They can also include voluntary hazard elimination sessions where people will get education about the effects of using hazardous materials. Financial Risk analysis of international business model and recommendations for risk prevention Financial Risk Analysis Foreign exchange fluctuations are one of the most primary financial risk associated with the global business model. Each and every country has its currency along with the value of that money. The values of the currency change over time due to numerous factors, and it impacts the foreign exchange rates. The secondary risk is a political risk (Alexander, 2008). The political risk can increase the cost of operating a business in another country. It happens when the selected country such as China has a continuous change in political system. Last but not the least, the currency crisis is another risk associated with the financial system of Cibo Expresso. If the currency is useless, the customer of the organization is paying with insignificant currency which will hurt the company later on. The owners of the business with an extensive experience in the foreign markets want to privet the currency risk with numerous foreign exchange goods and merchandise. The risk associated with the foreign exchange is concerned with the fluctuations in the currency value. Global businesses such as Cibo Expresso with the intercontinental employees, international suppliers or international sales are susceptible to the changes in foreign exchange rates. Most of the time, the effect of the instabilities in the exchange leads to loss of business but if fortune favors then it can result in the profit of the company. Either way, these instabilities in the currency value presents a risk to benefit (Alexander, 2008). For example, Cibo Expresso is based in the Adelaide, South Australia and sells a product to customers in China; the Chinese do not pay the company in Australian dollars. Instead, they pay in Renminbi which is the Chinese currency. Customers want to remunerate with their money, so the organization has to change those funds to dollars after they pay in Renminbi. Political risk impacts the foreign exchange risk. The change in policies due to variations in political leadership can impact the trade businesses. The business may have to pay extra funds in tariffs and taxes to continue their trade business in China. If Cibo Expresso cannot pay taxes and tariffs, then the Government of China may cease the company. Any change in law can impact the profits as well as the viability of a firm with the global operations. Recommended Strategies Cibo Expresso needs some strategies to prevent risk such as political risk along with currency fluctuation risk. Cibo Expresso should completely understand protection as a great method to reducing the political risk (Hull, 2012). At the same time as at a great scale level, the disasters and risks associated with the politics are exceptionally hard to supervise, at the organization level. The political risk can be safeguarded against for a premium. The companies should be practical and uphold a strategic distance from situations with simple political risk. It come at a significant expenditure. However, best utilized as an outright protection, particularly in a mix with other, more practical political risk administration systems. Huge firms use refined scoring structures to measure political risk in locales. Therefore, a percentage of the biggest organizations utilizes an expert who could handle the risk or chief of government undertakings whose sole duty is to remain focused on potent ial political risks. For example, undependable political atmospheres, new representation, and decisions among other. The leaders of Cibo Expresso need to expand their political risks. The firms that have dynamic specialty units in diverse topographies need to distinguish their cost base that a few districts that look extremely alluring may equally convey high political risk. It is clear that considering political risk relevant includes organizations implementing practical strides to assess and relieve their risks. Secondly, the cafe must manage foreign exchange risk. The organization needs to identify the type of foreign exchange risk. The types are transaction risk, economic risk as well as translational risk. The organization can prevent transaction risk by insisting the international customers to pay from home and the company takes all responsibilities to deliver the products at home safely without any damage. It means that the clients of Australia can order unique products at home via online from China which is not available in Australia (Hull, 2012). The organization can also make a pact with the Australian government to supply Chinese food and beverages to Australia using Australian dollar exchange. In these ways, Cibo Expresso can prevent foreign exchange risks. Conclusion The overall report is based on market entry strategies and the risks associated with it. Here, Cibo Expresso is considered as the organization. In this report, the marketing strategies are concerned with factors such as the leadership, marketing, human resource management, legal, IP protection, logistics, and localization of products, environmental and social and ethical responsibilities. Later on, some financial risk are being discussed along with the recommended strategies. References Alexander, C. (2008).Market risk analysis. Chichester, England: Wiley. Alexander, C. (2008).Market risk analysis. Great Britain: John Wiley Sons. Dessler, G. (2008).Human resource management. Upper Saddle River, NJ: Pearson Prentice Hall. Dickmann, M. Mller-Camen, M. (2006). A typology of international human resource management strategies and processes.The International Journal Of Human Resource Management,17(4), 580-601. https://dx.doi.org/10.1080/09585190600581337 Hull, J. (2012).Risk management and financial institutions. Hoboken, N.J.: John Wiley. Kllezi, J. (2013). Strategies of Entry Modes: The Case of Greek Banks Entering the Albanian Market.AJIS. https://dx.doi.org/10.5901/ajis.2013.v2n2p321 Kenneth Shaw,. (2015). Foreign Market Entry Strategies.China-USA Business Review,14(8). https://dx.doi.org/10.17265/1537-1514/2015.08.002 Kogetsidis, H. (2012). Critical Systems Thinking: A Creative Approach to Organizational Change.Journal Of Transnational Management,17(3), 189-204. https://dx.doi.org/10.1080/15475778.2012.706704 Kotler, P., Keller, K., Lu, T. (2009).Marketing management in China. Singapore: Pearson Prentice Hall. Kretzberg, A. (2008).Market entry strategies for emerging economies. Frankfurt am Main: Peter Lang. Low, B. (2007). Business-to-business marketing practices in China.Jnl Of Bus Indus Marketing,22(2). https://dx.doi.org/10.1108/jbim.2007.08022baa.001 Lymbersky, C. (2008).Market entry strategies. Hamburg: Management Laboratory Press. Schorsch, M. (2009).Market entry strategies for Russia. Hamburg: Diplom.de. Succeeding in China. (2010). Boston, Mass.