Indudstry Project Report on Market Entry Strategy of Al Foah Company

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Table of Contents
1. Introduction 3
2. Industry Analysis 3
3. Country and Market Analysis 4
3.1. External factors: 4
3.2. Customers/ Competitor based factors: 5
3.3. Industry and Business related factors: 5
3.4. Trade Barriers in International businesses through market analysis 6
4. Target Market and Market Positioning 6
4.1. Product 7
4.2. Price 7
4.3. Promotion 7
4.4. Place 7
5. Market Entry Strategy 8
6. International Competitive strategy 8
7. International Human Resources strategy and Organizational structure 9
8. Conclusion 9
9. References 10

Introduction
With the advancement in technology, the entrance of products into the market has become very easy. Though the pre-processing and planning involved in the launching and introduction of the new product requires extensive research of the current trends in the market and the behavior of the customers as well. The success of any company, these days, depend on the strategies and techniques that is uses while launching the product. Industry environment plays a significant role in developing these plans and strategies. Industry environment refers to the conditions pertaining to the social, political, economic factors that are existing in the market of a country. These factors cannot be controlled through the company, but a company can surely adopt policies and develop products after evaluating the industry environment of their target market (START UP OVERSEAS.CO.UK, 2014)
The product which has been selected is dates syrup and the local company selected which is involved in producing it is Al Foah Company. The target market in which the product is to be introduced is New Zealand. For this, the industry environment in New Zealand has to be obtained. The trends in the markets of New Zealand are evaluated and analyzed (ALFOAH.AE, 2015).
Industry Analysis
There a large number of companies which are establishing their hold in the markets of New Zealand. This is due to the very friendly business policies being present in New Zealand. The location of New Zealand is very favorable for carrying conflict free business as it does not have any conflicting or controversial neighbors. In our case, the product is a specialty of the Middle-east countries as they are the 8th highest producer of dates in the world. The highest quality of dates is obtained in UAE. The agriculture and dairy industry in New Zealand is very well developed. There are low temperatures in most of the parts of New Zealand throughout the year. Hence, date palm trees are not grown on an extensive scale because of the unfavorable cold climatic conditions (INTERNATIONAL COMPETITION NETWORK.ORG, 2015).
Country and Market Analysis
There is very low pollution observed in New Zealand. The population is very les as compared to the large land area of the country. Adding to this, the people of New Zealand have a high standard of living. People are very much interested in carrying new businesses and investing in the business through effective measuring and evaluation.
There are large number of products which are exported from New Zealand to other countries of the world. The trade policies, law and legal framework in New Zealand is extremely favorable for carrying of trade. It has been called as the most business friendly country in the world, by the World Bank. Analysis of the market in New Zealand includes considering the following factors:
External factors:
The political condition in New Zealand has been very stable since many years. There are hardly any conflicts with other countries, rebels and riot cases and any kind of corruption seen in New Zealand. Owing to a very limited population and a large land available, people are easily employed and can earn their living in a good way. The New Zealand government has been very effective in controlling any kind of inflation in their economy. This has led to extensive development of the country over a period of few years. Government regulates the policies and incentives for the private companies to help them cover their debts and help in the development of the country through their products and services continue to pose a threat to the launching of any new product in the market of New Zealand (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 9/10.
Customers/ Competitor based factors:
The market has a large base of customers who are ready to purchase newly introduced products and try them for themselves. The needs of the customers are related to high quality and easy availability of the product. There is a huge competition in New Zealand, due to the ease of trade and international relations policy. Hence, it would be very competitive for Al Foah to develop a good share in the market. The large number of competitors continue to pose a threat to the launching of any new product in the market of New Zealand (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 7.5/10
Industry and Business related factors:
There are very few trade barriers in entering the markets of New Zealand. These trade barriers are made to control the flow of companies and ensure that quality products are introduced in their markets. Labor force are easily available, but their pay scale is quite high as compared to their countries like China, Japan, and India. There is a huge scope of expansion available in the markets of New Zealand, as government provides incentives to the companies who have been offering good and genuine products for more than 2 years. The costs of establishment would be high as compared to other countries but it would be low as compared to the costs involved in the European countries and UK (START UP OVERSEAS.CO.UK, 2014). Hence, the suitability score on the basis of the above factors would be 8.5/10.
Trade Barriers in International businesses through market analysis
There are many trade barriers on the development of international businesses in New Zealand and they are:
01. Tariffs imposed
02. Licensing problems
03. Export or Import limit
04. Currency fall down in global market
05. Subsidiary companies and departments
06. Taxes collected on different basis.
07. Harbor and Airport permissions.
08. Customs clearance and policies.
09. Packaging as well as shipping considerations.
10. Cultural impact or restrictions on specific businesses (INFOPLEASE.COM, 2003).
Target Market and Market Positioning
Target market for the product involves many super markets and super departmental stores in New Zealand that keep a wide range of products. Market positioning refers to the ideal position or share that a company tends to obtain in the target market. It is very important in developing strategies for the launching of a new product in the market. Positioning of the product in the market is done on an initial testing level for some time. On the basis of that, after some years, the products are evaluated and the strategies are modified for developing a significant position of the date syrup product in the market of New Zealand.
Product
It is the base of any marketing policies and it provides the company with a future potential of success. For Al Foah Company, it has to be the unique and high quality date syrups and the brand value that it has in the UAE food industry.
Price
It is one such component in the development of the product which helps the organization to plan their strategies and develop a product that would generate profit for the company and at the same time, its price would be accepted in the market. Al Foah Company has to ensure its competitiveness in the market.
Promotion
Promotion refers to the steps or medium adopted by the company for marketing its products or services. It plays a very critical role as to create a hype in the market regarding the product that would get maximum number of people to the company for its product. Al Foah Company have to adopt promotional strategies for the product that would help them to sustain in the highly competitive market of New Zealand.
Place
Place refers to the location where the product or service is being delivered to the customers. It plays a very important role in the success of the product as the customers rank their experience on the basis of the taste and quality that they get from the products of Al Foah Company.

Market Entry Strategy
Licensing:
In the licensing style of market entry strategy, one company provides the license in the form of permission and rights to the other company or dealer for selling the company’s product in their local market. It is generally carried for a specified period and a fee is collected from the dealers to whom the license is provided that is the licensee. This would be a good strategy for the Al Foah Company to adopt the entry for its date syrup product in the market of New Zealand.
Exporting:
It is the business strategy that provides the entry in the market through direct selling of the product to the suppliers in the foreign markets through exporting the products. This would not be a good strategy for the Al Foah company s there would be no awareness regarding this product in the New Zealand market.
Turnkey projects:
In this strategy, the company provides a very limited freedom to their dealers and suppliers in the foreign markets and all the steps and processes are handled by the company itself. It requires an excessive daily control over the market operations carried by the dealers and main suppliers of the date syrup for Al Foah Company in New Zealand.
Franchising:
Franchising is one kind of licensing where the company not only provides the rights to the foreign markets dealers through franchises, but also takes care that the franchise developed follows the rules regarding the quality and service as mentioned by the company very strictly. It would be a good strategy for the Al Foah Company as it would provide them with a control over the quality and delivery of the product in these foreign markets.
Joint ventures:
A joint venture firm includes developing partnerships with a host country firm where the rights and ownership would be shared between the two. This would not be appropriate for Al Foah as it would not be getting the required partners in the New Zealand market.

Wholly owned subsidiary:
In this strategy, the company develops an entire firm at the foreign location. All the operations are completely controlled by the company and the stocks as well as the rights are possessed with the company. It would not be viable on a short term basis as it involves large investments to be made by the Al Foah Company in the foreign market. However, it can be adopted after some time, when the estimated sales of the product is achieved easily.
The best strategy that should be adopted would be licensing for some time. After the success of the product, developing a wholly owned subsidiary could be considered as a viable option for reducing the costs and increasing the responsiveness. Al Foah company can use the positioning structure on the basis of the level of implementation of their strategies as well as they have to develop a pilot testing phase for the entrance of the product of dates syrup in the market of New Zealand. The strategy requires proper evaluation of the sales in the first month for a limited quantity of product in a very famous super market of New Zealand. On the basis of this, logistics would be developed and statistics related to the projection of estimated sales in the future would be developed. At the same time, it is very important to understand the needs of the customers while launching the product and entering a new market. The strategies that are involved in developing of markets in New Zealand has to be carried considering the legal structure, policies and other regulations offered by the New Zealand Trade Authority and New Zealand Food Safety Department (INTERNATIONAL COMPETITION NETWORK.ORG, 2015).

International Competitive strategy
The relationship of New Zealand has been very supportive with the trade unions, organizations and trading bodies of the world. Hence, there are fewer problems that would arise while setting up a business and globalizing any product by launching it in New Zealand. New Zealand has large number of competitors who consider their market as a huge potential for selling their products in New Zealand. The international markets are striving hard to develop a niche for their products in the markets of New Zealand. Hence, it needs extensive research in terms of marketing strategies, quality and pricing of the product. Al Foah has always been known for its wide range of products and high quality standards. The international policies and framework developed for the product should be such it provides a complete understanding of the market policies and conditions prevailing in the market. These factors are utilized for developing competitive strategies for the international markets (ALFOAH.AE, 2015).
There are 4 types of international strategies available to any business for developing their competence in the market. They are:
Global standardization strategy:
It is one kind of strategy which focuses on the development of a cost effective product in the market and has least dependence on the local responsiveness from the foreign markets. This could be considered for the Al Foah Company as entering the new market of New Zealand would be made possible only through low cost structure.
International strategy:
It involves developing the product initially for the local market and then selling it to the foreign market. This is not suitable for the Al Foah Company because the taste of the people would be different in New Zealand as compared to UAE.
Localisation strategy:
It is the business strategy where there is customization of the product as per the needs of the customers. It helps in ensuring that the local needs and requirements are satisfied and hence it would not be appropriate for the Al Foah Company as the cost pressures are high on its product of date syrup.
Transnational strategy:
It is one form of business strategy that would provide both high cost pressures as well as heavy local responsiveness of the local people in the foreign market. It is not suitable for the Al Foah Company as it would requires a considerable amount of time and resources.
For the launching of the date syrup product in the markets of New Zealand, the cost factor would be the most critical factor for the entry of the product. Hence, the globalisation or the global strategy would be the most appropriate as seen above as it provides a considerable less cost which his very necessary for entering the foreign market of New Zealand.
The evaluation of the above mentioned strategies is done on the basis of the local responsiveness pressure obtained to the cost reduction pressures and it is shown in the figure below:

(SLIDESHARE.NET, 2012)
International Human Resources strategy and Organizational structure
The market for the sale of date syrup can be very well developed and it has huge potential to absorb good quality products of dates in abundance. Al Foah has an organizational structure which is mostly based in UAE. Hence, they would be requiring marketing consultants and experts from New Zealand itself that would help them in developing a proper and fruitful strategy for launching of the date syrup in New Zealand’s markets. The strategies pertaining to the Human resources management in the international involves considering the policies and human factors of the target markets. Organizational structure has to be maintained flexible for adopting the international structures and conditions prevailing in the foreign markets (ALFOAH.AE, 2015).
Conclusion
It can be concluded that entering new market of New Zealand involves developing products on the basis of a complete synchronization between condition of the markets and the needs of the customers. This has to be blended with the quality and services offered by the product. On the basis of these factors and their evaluation, it can be stated that Al Foah can carry expansion of their market in New Zealand through the launching of date syrups in New Zealand.

References
ALFOAH.AE. (2015, February). DATE SYRUP. Retrieved from http://www.alfoah.ae: http://www.alfoah.ae/contentPage.php?pid=16
INFOPLEASE.COM. (2003). Barriers to International Trade. Retrieved from http://www.infoplease.com: http://www.infoplease.com/cig/economics/barriers-international-trade.html
INTERNATIONAL COMPETITION NETWORK.ORG. (2015). CHAPTER 5 – ASSESSMENT OF MARKET ENTRY AND EXPANSION (BARRIERS TO. Retrieved from http://www.internationalcompetitionnetwork.org: http://www.internationalcompetitionnetwork.org/uploads/library/doc559.pdf
SLIDESHARE.NET. (2012, may 6). IKEA: Furniture Retailer To The World. Retrieved from http://www.slideshare.net: http://www.slideshare.net/kuszczakowski/ikea-furniture-retailer-to-the-world
START UP OVERSEAS.CO.UK. (2014). Why Expand to New Zealand? Retrieved from http://www.startupoverseas.co.uk: http://www.startupoverseas.co.uk/expanding-a-business-in-new-zealand/entering-the-market.html

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March 9, 2018

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