Marketing Assignemnt - How the Internet has Affected Marketing.

International organizations are companies that operate across national and continental boarders. Companies go international with an aim of benefiting from resources such as labor, technology, raw materials, and expertise among others. However, the major reason as to why most companies venture in to the international business arena is to increase their market share, make more sales and increase the company’s profits (HM Treasury 2004, p. 2). Mobile phone industries have been on the frontline to venture in to new markets to increase sales. However, venturing in to a new market brings opportunities to the business as well as challenges. This paper is an analysis of key issues facing a smart phone company venturing in to a Latin American emerging market and business advice to retain the market.

Challenges that would face a company in an international arena can be classified in to two different categories, which are the internal and external challenges. The internal challenges are those challenges within the company that might hinder its success in the new Latin market. On the other hand, the external challenges are those that are not associated with the company, but are associated with the target market and affect the company’s success in the Latin market (Moehlman 2010, p. 32).

External Environment

There are different external challenges, which exist in the Latin market, and have the ability to interfere with business operations.The study of all the external environment of the foreign country includes

Economic Challenge

Latin America is a fast-growing market for smart phone, which has attracted many companies. However, the economy of a target nation can pose a major challenge in the success of a company’s operations in the Latin market. For a business venturing in the international arena, the economy of the target nation is an essential factor to put in to consideration, this is because it determines the market price for the products, which directly translates to the amount of profit the business makes. The GDP of the Latin market is important because the growth of GDP simultaneously grows with economic development (Paul 2009, p. 2). The smart phone company targeting to go in to the Latin market must ensure that they have a great understanding of the market as the prices will be set based on the ability of the people to acquire the products.

Political challenge

Political situation of a target nation is an important aspect for the smart phone company venturing in international business to consider. This is mainly because the politicians are the lawmakers and the governments are involved in the drafting of policies governing international business operations (Cherunilam 2010, p. 13). The Latin market is a democrat that is ruled by the majority vote and most of the people in the government are involved in policymaking. However, there is a clear distinction between politics and the economy of the nation, which guarantees quiet working environment. In addition, when venturing in to a new country, it is important to note the international trade bodies, which the Latin country is a member, as this might have an effect of how the nation treats international business in terms of customs and tariffs. The government may be involved in the making of policies that determine the acceptance of international business and taxation, which will determine the profitability of the smart phone company in the Latin market.

Legal

The legal aspect of venturing in to a new country includes governmental regulations during the establishment of enterprises (Thomas 2006, p. 12). This may pose a challenge to the smart phone company as it ventures in the Latin market. The company would need to understand the legal framework of the country as it aims at encouraging foreign investors into the country and in its capital industry (Jansson 2008, p. 12). A good example is, when the government expects that the products being produced by the company should be in line with the health and safety Act in their constitution. Thus, they should not be harmful to the citizens of the country.

Licenses and taxation

Getting the legal documentation and filing for the right taxation can poses a challenge to an organization venturing in an international business. Based on (Thomas, 2006 p.43), the tax policies of the Latin market are designed towards encouraging investments from multinational corporations. Investments from these corporations enables the country grow their GDP and therefore the country develops through provision of employment to the locals.

Cultural

Culture poses a challenge to organization is, when they try to venture in to a market without understanding the way of life for the people of the particular nation. The culture of the people and the Latin America is an important aspect to consider. This is a sensitive aspect of the market, which requires ample time to analyze and understand. The spending and electronic consumption of the Latin America community determines the amount of sales that the smart phone company will make. In marketing, culture poses a challenge, when the company workers do not understand the local people’s language and what they prefer. It required patience, hard work, integrity, and diligence and law abiders in order to carry out smooth operations.

Competition

This is a major challenge to many organizations seeking to venture in international business. This is mainly because there are other companies in the industry seeking to expand their business and increase sales. As a fast growing market for smart phones, the Latin market has attracted major smart phone companies seeking a piece of the market. This presents a major challenge to the venturing smart phone company as the company has to analyze the competition and determine the right procedure of entering the market and gaining a share.

Internal challenges

Despite facing the external challenges, companies venturing in international business also face challenges not related to the external environment (Moehlman 2010, p. 32). The internal challenges are those challenges within the company that might hinder its success in the new Latin market. The internal challenges of a company are usually associated with the company’s operations and selection of the teams to represent the international venture.

Internal Environment

The internal business environment can pose a major challenge when a company is focusing on venturing in to an international business arena. Internal environment keepschanging, and it is composed of management, workers and the culture of the firm (Riad, Ajami & Jason 2006, p. 4). The leadership of the business can either build it or destroy it based on decisions they make concerning the company. The management also affects the engagement of employees, and it can lead to destruction if not managed properly.

International human resource

Employee working in an international face challenges interacting with the local due to culture and language barriers. Most of the employees will come from the Latin America and the incoming human resource might not be in a position to understand the culture of the Latin America people. Hiring the local people help the company to meet the taste of the customers, as they will be interacting directly with the natives. In addition, it is cheaper because importing labor would have to cater for all the expenses of the employees (Riad, Ajami & Jason 2006, p. 4). The communities will also benefit as it will create employment for the local people hence; improving the living standards of the people.

International finance and accounting

International finance and accounting might pose a challenge to a company in case the people working in the Latin market are not conversant with the requirements of international finance and a accounting. This poses a challenge to companies, when they need to determine the fair pricing of the product, which should be reasonable and profitable to the company. It is also vital to employ a local financial advisor who will advise the company on matters relating to international business (Baack 2013, p. 2).

International marketing

International marketing refers to transactions that are carried out overseas which require the traders to be sensitive to entry strategies and identifying the market (Bennett and Blythe 2002, p. 23). The traders put emphasis on other factors such as pricing, promotion and channels of distribution. However, cultural practices play a vital role in influencing consumer behavior (Curry 2009, p. 4). When venturing in to the Latin market, the company needs to understand the people’s culture and develop the right manner to introduce the product to them.

Solutions

External analysis

The external analysis of a company starts with the identification of the industry within, which a company is competing (Hill 2013, p. 47). The management of the company should identify the basic needs of the customer that their company is serving; in order to obtain a customer- oriented opinion, instead of a product- oriented opinion. A company should establish clearly- defined industry boundaries, in order to counter the competitors’ threat (Hill 2013, p. 47). However, the company’s boundaries should not be narrowly defined as this would limit a company’s ability to timely respond to threats. The management can use competitive forces model, industry life cycle, and strategic group analysis, in order to understand the industry. The competitive forces model focuses on elements that shape competition within an industry. They include the risk of new market entrants, established competitors, bargaining power of buyers and sellers, and the closeness of substitute products to the industry’s product.

Strategic business management

Strategic managers have the potential of changing an industry’s competitive structure, and the wider political, economic, technological, global, and geographic environment, in which companies are affiliated (Hill 2013, p. 70) (Mahidhar et al,. 2009, p. 1). In a dynamic business environment, any firm wishing to remain competitive must formulate and implement strategic practices and goals that will lead to the success of the business. Planning, coordination, controlling, and monitoring are some of the key elements that assist a business to achieve its goals. In an emerging smart phone market, there is unlimited potential since there is minimal threat of competitors.

Strategic directing helps to offer productions that are preferred by the customers, and those that are environmental friendly, which enhances profitability. In order to enhance sustainability, the company should focus on restructuring, sound business operations, responsible outsourcing, and change management. Maximizing shareholder’s value helps in minimising the capital risks. Strategic management assures shareholders that the management is committed and capable of pursuing strategies that will provide positive results for the invested capital (Hill 2013, P. 5). The management should configure its resources, and organize the company’s operations effectively.

Corporate reputation is a source of competitive advantage that the company should strive to establish (Okazaki 2012, p. 353). It is among the most valuable intangible assets of a company, which are rarely imitated by competitors. Smart phones face the threat of imitation by other competitors, but this company can enhance its corporate reputation, in order to gain a competitive edge ('Nokia blitzes emerging markets' 2003, p. 18). Corporate reputation increases customer’s confidence in the products, and marketing strategies, which results to brand loyalty (Okazaki 2012, p. 353). If the company shows a strong reputation, then its chances of accessing the capital markets are higher, and this reduces the capital costs. A good reputation influences negotiations with the stakeholders, which enhances profitability, competitiveness, and sustainability of a company. Good reputation in a smart phone company will influence the stakeholders, which will determine their overall support for the company’s initiatives.

Market strategy

Marketing is a key area of strength for a smart phone company. It is crucial for a company to maintain a strategic position in the market. The company should make strategic marketing plans before establishing the various value chain functions. Decisions relating to market strategy are complex, and need to be aligned with a company’s strategy. In a dynamic and competitive environment, the company has to be proactive and innovative, in order to meet the market demands. The strategic objectives should be aligned with the potential of the location.

Brand loyalty

The company should create brand loyalty through continuous advertisement of its products, company name, patent protection of its products, emphasis on quality products, excellent after sales services, and enhanced product innovation through continuous research and product development (Hill 2013, P. 51). Brand loyalty challenges new market entrants, and makes it difficult for them to take away the market share established by another company. Market entrants may find the breaking down of established customer preferences, a costly undertaking, and this reduces the threat posed by potential entrants (Hill 2013, P. 51). For instance, once the smart phone establishes itself, new entrants may find it difficult to convince the customers about substitute products, since the customers will have built trust on their established provider.

The supply chain

Creating supply networks help to cut costs for the company. It is crucial for a business targeting an emerging market, to establish business relationship and understand the culture and local markets. Customers have specific emotional and functional needs, and this requires market differentiation and targeting. Since the company is entering in an emerging market, it can take advantage of the newfound financial benefits, through strategic planning. The company should chose an operating model depending on the expected returns, risks involved, and competition. The rules and regulations of a country determine the type of a model that business can adopt.

Market research

It is important to conduct market research before launching the product, in order to assess the needs of the customer. This will help in developing specific products that fit the consumer needs, and reveal other dynamics that will be useful in product development. The company should be innovative and come up with products that exceed the customer’s expectations. High quality products will help in satisfying the customers and this will enhance the brand. Companies with superior brands are able to satisfy the customers, and build a sustainable business. Research provides feedback, which is useful in improving the products for continuous customer satisfaction and retention, especially in a competitive and evolving business world. Customer satisfaction is a source of competitive advantage for the company (Hill 2013, p. 86).

Competition

A company’s competitors are those companies that offer similar or close substitutes, and they have the capacity of satisfying the same basis consumer needs (Hill 2013, p. 47). The management should make strategic decisions, in order to outsmart their competitors. In an emerging market, only the most effective and efficient company wins and is able to secure a competitive edge over other competitors (Hill 2013, p. 6). In order to maximize the shareholder’s value, the management should formulate and implement strategies that will enable the company to outsmart competitors. The management should understand the competitive advantage, in order to gain a market share from potential competitors, and grow expand its profit margins than those of the competitors. Established competitors include Nokia and Samsung (Lee 2006, p. 10).

An effective business model provides guidelines, which enables a company to achieve profitable growth and gain c competitive advantage. The model should select its customers and differentiate its products. It should create value for the customers, acquire, and retain customers, through effective customer services, high quality products, and fair pricing (Hill 2013, p. 7). Other new entrants in the market will pose stiff competition for the company (Renstrom 2008, p. 15). In order, to stay ahead of competition, the company should remain innovative; build strategic relationships with the key stakeholders such as customers, suppliers, and the local communities. Innovation is a core competency, since it continuously introduces new products into the market. An emerging market provides a range of opportunities and other mobile phone providers will have an interest in that specific market, once they realize its potential (Omatseye 2003, p. 22) (Renstrom 2008, p. 15). Thus, the company should establish itself strategically, and build positive relationships with key stakeholders, in order to gain a competitive edge over the potential competitors.

Business ethics

The company should ensure that their business operations are ethical, and practice social responsibility. This will enhance the public image of the company and attract customers and potential investors. Good public relations with the stakeholders enhance the survival chances of a business. It is advisable to involve the community in the operations of the company, as this will strengthen the business relationship between the public and the company.

Conclusion

An emerging market can be a source of significant opportunities to businesses (Moynihan 2012, p. 14). Latin America offers an opportunity for a company that deals with smart phones since it is an emerging market. However, the task is full of challenges, especially in a dynamic business environment. Internal and external factors affect the performance of any business and should not be down- played. Emerging businesses should strive to establish a competitive edge, in order to achieve profitability, competitiveness, and sustainability. Good reputation, effective leadership, marketing strategies, and change management, can support the goals of a company operating in an emerging market.

An understanding of the macro and microenvironment, make significant contributions, in formulation of strategic plans for any company that wishes to attain sustainability, profitability, and competitiveness. The company must use its resources effectively, in order to establish a distinctive competency. Distinctive competencies define the strategies pursued by the company, and this leads to competitive advantage, and profitability. Adoption of effective strategies can lead to building of new capabilities and resources, or strengthen the existing potential and resources of a company, and this would lead to enhanced unique competencies of a company.

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Introduction