Research Articles Base: Market Entry Strategy Research Proposal

Market Entry Strategy of IBM in China

Market Entry Strategy of IBM in China   1.0  Introduction Strategies are central to the achievement of sustainable development. These are the driving force of practically every organisation that are motivated to grow fast ahead of the competitors, grow in line with the industry or to simply catch-up and defend an existing status. The orientation of these organisations is to expand, to reach and to penetrate into new market segments despite of all the hindrances that the market environment imposes. IBM is not an exemption to this as this multinational corporation is known for initiating efforts to maximise profit and minimise risks through strategizing. This paper discusses in detail the research proposal of the market entry strategy of IBM in China. In particular, the research will focus on evaluating the most appropriate entry strategy and the basic entry decisions that IBM should consider prior to penetrating an otherwise highly-paternalistic, communist market like China. In this research proposal, the context and theme of the study are presented; the objectives of the study and the research statements are formulated. Here, vital concepts and questions are stated. Finally, the methodology to be used is discussed. 2.0  Theoretical Framework The theory that supports the aims of this research is Hofstede’s (1980) four value dimensions, which explain differences among work-related value patterns which affect the structuring and functioning of organizations. The four dimensions are the following: large versus small power distance; strong versus weak uncertainty avoidance; individualism versus collectivism; and masculinity versus femininity. According to Hofstede’s analysis for China, the Chinese rank lower than any other Asian country in the Individualism (IDV) ranking, at 15 compared to an average of 24 (ITIM, 2003). This may be attributed, in part, to the high level of emphasis on a Collectivist society by the Communist rule, as compared to one of Individualism (ITIM, 2003). China is proven to be a collectivist society (Triandis, 1994). Chinese are generally willing to give priority to the goals of the collective over their own personal goals, and emphasize their connection to the members of these collectives. Furthermore, they focus their trust and solidarity toward the norms of the members of their collectives, also called in group, and is often distrustful of out-group. The Chinese believes that individualism connotes selfishness, a lack of concern for others, and an aversion to group discipline, whereas collectivism is understood to affirm the solidarity of the group (Ho & Chiu, 1994). 3.0  Literature Review The study will review a document and present related literatures. This will primarily include literatures from Hofstede, Hill and Jones and Johnson and Scholes. Basically, Hill and Jones discuss the basic entry decisions a company faces when going international. There are three basic decisions that a firm contemplating foreign expansion should take into account: which markets to enter, when to enter those markets, and on what scale. a)     Choosing foreign market. The choice must be made on the basis of an assessment of their long-run profit potential. As such, the attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. b)     Timing of entry. The philosophy is: entry is early when an international business enters a foreign market before other foreign firms, and late when it enters after other international businesses have already established themselves. c)      Scale of entry and strategic commitments. Entering a market on a large scale involves the commitment of significant resources to that venture. Though not all companies have the resources, even some large companies prefer to enter foreign markets on a small scale and then gradually build their presence as they become familiar with the foreign market. According to Hill and Jones (2001), there are five options that companies could ponder on. These are exporting, licensing, franchising, joint ventures, and the establishment of a wholly owned subsidiary. Johnson and Scholes (2002) establish the role of strategic management incorporates the corporal understanding of the application of strategic positioning, the power of strategic choices and putting such strategies into practice. Such strategies are inherent for the companies which are diverting their attention from a domestic marketplace into the international scene. A) Strategic positioning illustrates the implications of strategies on the external environment, the strategic capability of the organisations and the corporate expectations. B) Strategic choices provide an array wherein the companies could decide what approaches, directions, or methods use in achieving business-level and corporate-level objectives. Expansions purport a greater profit for the company through business and corporate-levels strategies towards cost leadership, differentiation and competitive advantage. C) The companies’ effort to ensure that strategies are functioning is acknowledged as translating strategy into action. Literatures about international marketing strategies will also be reviewed, as well as literatures about how a culture plays an important role in determining market strategies for multinational corporations so as the reader will have references about the different concepts and elements used in the study.   4.0  Statement of the Problem The problem that will be addressed in this research is the most suitable market entry strategy of IBM in China. The key question to answer is: For IBM, how does the company could successfully penetrate the Chinese market? In lieu with this, the following specific questions will be answered. 1)     What are the strategies that IBM should engage in entering the Chinese market? 2)     What are the challenges and hindrances that IBM will face relating to Chinese market penetration? 3)     How will the IBM combat the challenges imposed by the Chinese culture? 4)     How important is succeeding to penetrate the Chinese market for IBM?    5.0  Research Objectives The main purpose of the study is to analyse the most suitable market entry strategy that IBM could adopt in penetrating one of the most powerful yet convoluted markets in the world – the Chinese market. The following specific objectives will be addressed. §         To evaluate how Chinese culture will affect the expansion strategies of IBM §         To determine the challenges that IBM will expectantly face in penetrating the Chinese market §         To scrutinise how the Chinese market penetration will provide benefits and advantages to IBM   6.0  Research Methodology The study will explore the problem in a positivist view, using exploratory research strategy because it aims to know more about the phenomenon of employing market entry strategies. Exploratory research will enable the study to look at the problem in both descriptive and exploratory manner. It will look into the problem by exploring the views of different sets of respondents, as well as by exploring different literatures related with the study. This research is also cross-sectional because of limited time. This research is a study of a particular phenomenon (or phenomena) at a particular time. (Saunders et al, 2003) Accordingly, cross-sectional studies often employ the survey strategy, and they may be seeking to describe the incidence of a phenomenon or to compare factors in different organizations. In this study, primary and secondary research will be both incorporated. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that involve with it. The primary data for the study will be represented by the survey results that will be acquired from the respondents. On the other hand, the literature reviews to be presented in the second chapter of the study will represent the secondary data of the study. 7.0  Reference Hill, Charles, W. L. and Jones, Gareth, R. (2001). Chapter 8 Strategy in the Global Environment in Strategic Management: An Integrated Approach (5th edn) Houghton Mifflin Company.   Ho, D. Y. F., & Chiu, C. Y. (1994). Component ideas of individualism, collectivism and social organization: An application in the study of Chinese culture. In U. Kim, H. C. Triandis, C. Kagitcibasi, S. C. Choi, & G. Yoon (Eds.), Individualism and collectivism: Theory, method, and application (pp. 137-156). Newbury Park, CA: Sage.   Hofstede, G.H. (1980), Culture’s Consequences: International Differences in Work-related Values, Sage Publications, London.   ITIM (2003). Geert Hofstede’s Cultural Dimensions: China (online). Available at: http://www.geert-hofstede.com/hofstede_china.shtml.[Accessed: 03/23/07].   Johnson, G and Scholes, K 2002, Exploring Corporate Strategy, Prentice Hall.   Saunders, M., Lewis, P. and Thornhill, A. (2003). Research Methods for Business Students. 3rd Edition.  Prentice Hall.   Credit:ivythesis.typepad.com

Market Entry Strategy of IBM in China

Market Entry Strategy of IBM in China 1.0 Introduction Strategies are central to the achievement of sustainable development. These ...

Project 4_Able Corporation

Project 4 Able Corporation External Analysis Opportunities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Meeting the standards of European and other Asian consumers</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Use of the World Wide Web for advertising and product purchase</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Larger target market</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Trend</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Brand image of the company</li> </ul> These opportunities can be used by Able Corporation for gain in profit and establishment in the international market. The company has successfully met the standards and needs of its American and Canadian market, so it would not be hard for the company to meet the standards of consumers from other countries, based on their culture, their curiosity to advanced and new technologies, and their ability to try new products from the United States. Able Corporation can take advantage of the use of the Internet to advertise their products and have a wider market. This would be a way of coping with the trend and improving the brand image of the products.    Threats <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Competition from other exporting companies offering the same product line</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Local or domestic companies in the foreign country</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Entry barriers</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Delay of delivery or export</li> </ul> Identifying these threats would be essential so the company would be able to plan their strategies regarding their expansion to other foreign markets. These threats would somehow hinder the company to reach their target market, including the export policies of their target market or the delay of their export to their market. Determining threats or problems would lead the company to come up with solutions to continue with the company’s operation.   Preliminary Outline of Business Plan A. Identity Development      1. Development of Mission Statement      2. Situational Analysis           a. Use of SWOT Analysis           b. Use of PEST Analysis B. Resource Allocations      1. Contacts with large retailers      2. Distribution of products abroad C. Strategic Implementation      1. Balanced Standardization      2. Adaptation Strategy D. Progress Assessment      1. Financial indicators     2. Non-financial indicators Mission Statement             The company aims to pursue consistent customer satisfaction in all of its major markets by developing and innovating products, through efficiency in the distribution of sales, production, development and operations, based on the expectations, abilities, and needs of its customers.   Key Operating Principles             The key operating principle of Able Corporation is its dedication to innovate and supply high quality and affordable products to all consumers. This leads to its underlying principle of providing customer satisfaction through keen identification of needs and continuous development and improvement of products.      Preliminary Market Analysis Size and Growth of Market – Important markets are from the capitals of European and Asian countries, which will be using most of the company’s products on their households or on offices. Their purchase will be based on the change in the perspective of the cultures in many countries, such as the increase in the incidence of working women. Profitability – The proposed market will be profitable in the upcoming years for most of the countries in Europe are developed, needing an increase in supply for the products in their household and offices. In Asia, most countries are developing, therefore needing the equipments to for an improved lifestyle. Environmental Analysis – This involves the political, economic, socio-cultural and technological trends in the foreign countries. In general, the environment in the European market is more consistent than the Asian market, because more countries are developed in Europe than in Asia. In addition, the currency in Asia is more dependent on dollars, than the euro. Resources – The needed resources of the company include tangible, intangible and human resources, which will be responsible for the continuance of the project. Aside from the financial and technological resources, the company needs human skills, abilities and expertise in the target market (2005).    One-Year Strategic Objectives <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Lower company costs</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Better customer service</li> </ul> Five-Year Strategic Objectives <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Bigger market share</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> To compete in international markets</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> More attractive product line</li> </ul> Ten-Year Strategic Objectives <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Stronger reputation</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Recognition as the leader in technology and product innovation</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> More secured industry rank</li> </ul>   Appendix   Expected Revenue for Able Corporation   Year Revenue 2000 $ 150,000 2002 $ 145,000 2004 $ 200,000 2006 $ 250,000 2008 $ 260,000 2010 $ 350,000 Average $ 226,000     Credit:ivythesis.typepad.com

Project 4_Able Corporation

Project 4 Able Corporation External Analysis Opportunities Meeting the standards of European and other Asian consumers Use of...

The feasibility of using Exporting as a marketing entry strategy for WiserSoft Company to bring its products in the United Kingdom: A Research Proposal

Managerial Decision Making+ Research Design   Introduction             Perhaps, the rapid growth of technological advancement in the society has brought people so much ease in all the things they do. Part of this technological advancement is the emergence of the Information System. Information System (IS) is often regarded as the unquestioned cornerstone towards competitiveness in the 21st century (Donthu & Garcia, 1999). These technological advancements have brought people to create a system that would be helpful in their everyday living.   Furthermore, this development has made changes and development of the lives of people especially those in the working place.  Within the working place, one of the most essential aspects to consider is to create a system that will be useful for different activities of the organisation.   The WiserSoft Company has decided to conquer the international market by exporting its WiserSoft product to the United Kingdom. Exporting, is the simplest form to be used when a company wishes to invade the international market which includes direct or indirect method such as using an agent, in the case of direct method and counter trade if the company opted to implement an indirect method.               Since, the technology has invading man’s working place the product that has been chosen to go international market is the office software.  More and more organisation is trying its best to provide a system in order to help their stakeholders to assess with the organisations’ data projects.  The role of the information system is very important in an organisation.   Hence, the WiserSoft Company was built and now will try to market its product by exporting. Since the companies in the United Kingdom are trying to use information system for their competitiveness, the company’s goal is to be well known in providing information system software in a working place.  Primarily, the main mission of the company is to provide its target market with a tool that will assist them in their workload, more relationships with lesser effort, less personnel and less time with the best results.  The main product of the company is the WiserSoft Office Automation. The company has developed the WiserSoft Office Automation in order to give an immediate response to application gap and produce a single integrated platform by combining its multiple applications to be able to provide an office organisation with model interdependent software tool and that this WiserSoft Automation will soon be out in the UK.   Proposed Research              In line with the plan of the company to export its good within the United Kingdom, it is important that the company would be able to conduct a marketing research first so that they will know whether their plan will help the company to be known in the international market or it will just be a cause for the downturn of the WiserSoft Company. The chosen topic is if it would be feasible that the WiserSoft Office Automation product of the Company can be exported to UK.  The title of the research would be: “The feasibility of using Exporting as a marketing entry strategy for WiserSoft Company to bring its products in the United Kingdom”   Possible Research Question 1.    What is the concept of exporting as a marketing entry strategy? 2.    Can WiserSoft Company utilize exporting in order for them to be known internationally? 3.    What are the advantages of using exporting as a marketing entry strategy? 4.    What are the disadvantages of using exporting as a marketing entry strategy? 5.    What is the possible impact that WiserSoft Company would encounter in using exporting? 6.    What are the perception of the employees and other stakeholder of WiserSoft Company regarding its decision of exporting their products in United Kingdom?   Reference Donthu, N. & Garcia, A. (1999). The Internet shopper. Journal of Advertising             Research. 39 (3), 52-58. Elliot, G.R. (1990). The Marketing Concept – Necessary, but Sufficient? An             Environmental View. Graduate School of Australia, University of             Melbourne, Australia. Hills, G.E. (1994). Marketing and Entrepreneurship: Research Ideas and             Opportunities. Quorum Books, Westport, CT.       Credit:ivythesis.typepad.com

The feasibility of using Exporting as a marketing entry strategy for WiserSoft Company to bring its products in the United Kingdom: A Research Proposal

Managerial Decision Making+ Research Design Introduction Perhaps, the rapid growth of technological advancement in the s...

The feasibility of using Exporting as a marketing entry strategy for WiserSoft Company to bring its products in the United Kingdom: A Research Proposal

The feasibility of using Exporting as a marketing entry strategy for WiserSoft Company to bring its products in the United Kingdom: A Research Proposal

Managerial Decision Making+ Research Design Introduction Perhaps, the rapid growth of technological advancement in the s...

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