• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11

The marketing department of a multinational company wishes to expand its product sales into a new overseas market.a) What factors do they need to take into account?

Extracts from this document...

Introduction

Module: International Business Word Count: 1998 Student ID: 0363187/1 Table of Contents Introduction - MNCs .....................................................................3 The Macro Environment...................................................................3 Political Factors.............................................................................3 Economic Factors..........................................................................4 Sociocultural Factors......................................................................4 Technological Factors.....................................................................4 Legal Factors..............................................................................5 Environment Issues......................................................................5 The Internal Environment...............................................................5 Market Research..........................................................................5 Porter's Five Forces......................................................................6 Conclusion................................................................................6 Product - Air Travel....................................................................7 Market - Guatemala......................................................................7 Political Factors.........................................................................7 Economic Factors.....................................................................8 Sociocultural Factors.................................................................8 Technological Factors...............................................................8 Market Research......................................................................8 Porter's Five Forces..................................................................8 Conclusion.............................................................................8 The marketing department of a multinational company wishes to expand its product sales into a new overseas market. a) What factors do they need to take into account? Introduction - Multinational Company Economists are not in agreement as to how multinational or transnational corporations should be defined. Multinational corporations have many dimensions and can be viewed from several perspectives (ownership, management, strategy and structural). According to Franklin Root (1994), an MNC is a parent company that: 1. engages in foreign production through its affiliates located in several countries, 2. exercises direct control over the policies of its affiliates, 3. implements business strategies in production, marketing, finance and staffing that transcend national boundaries (geocentric). In other words, MNCs exhibit no loyalty to the country in which they are incorporated. Simply put, a multinational (sometime called a transnational) is a company that has headquarters in one country, but has operation in other countries (Wall et al 2001). ...read more.

Middle

Porter's Five Forces analysis Porter argued that 'the essence of strategy formulation is coping with competition' and that in addition to undertaking a PESTLE analysis, it is also necessary to undertake a structural analysis of the industry to gauge the strengths and weaknesses of the opposition and also determine the competitive structure of a given market (sited Wall et al 2001). The key areas in the five forces analysis are the threat of potential entrants, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry. Conclusion These are the main factors that a multinational company should consider when entering a new overseas market. b) Evaluate the relative importance of these factors, using a specific products and a specific overseas market by way of illustration. Product - Air Travel BWIA West Indies Airways is the Caribbean's oldest and best-known airline. It serves the Caribbean from both sides of the Atlantic and passenger carryings are 1.3 million a year. Founded in 1940, its safety record is unsurpassed in the history of air travel. Based in Trinidad and Tobago, it has major hubs in Barbados and Antigua and has provided the Caribbean with international air service from North America and the UK and Europe. ...read more.

Conclusion

Through market research, BWIA would determine the number of airlines (twenty-six) operating into Guatemala. However, none of these airlines offer direct flights to or from the Caribbean to Guatemala. Thus there is little direct competition to BWIA's entry. Notwithstanding, a direct service eliminates the need for indirect connections through Miami, USA or Caracas, Venezuela which reduces the passenger load from the Caribbean for airlines operating in these two countries. This impact on the airlines operating these routes and further analysis of Porter's five forces will assist BWIA in determining it competition. Porter's Five Forces BWIA's analysis of Porter's five forces should determine the intensity of competition and hence the profitability and attractiveness of an industry. In shaping its corporate strategy, the team can modify these competitive forces in a way that improves the position of the organisation. Porter's model supports analysis of the driving forces in an industry. Based on the information derived from the five forces analysis, the BWIA management can decide how to influence or to exploit particular characteristics of their industry and plan for possible resistance to the development of this new market. Conclusion The relative importance of these factors will vary from country to country and among multinationals. The key component to the successful launch of a new product into a new market is the consideration of these combined factors in informing the strategic decision. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Conduct a PEST analysis for a company within the Tourism industry.

    Travel agents compete in variety of ways i.e. price, quality and the package itself. Companies offer special discounted packages and also compete on branding. As there are hundreds of travel agents in the U.K market so, it's difficult to specify the competitors in the market. Travel select, Expedia, Travelocity, E bookers and Thomas cook etc.

  2. If Carphone Warehouse was considering opening a new store, they would have to take ...

    from Carphone Warehouse, so this would also be a factor for Carphone Warehouse to look at. The local government charges are also a key factor when looking to open a new store, because if the charges are too high Carphone Warehouse would not make as much of a profit if

  1. "Spill-overs from multinational companies to the rest of the developing country are a dangerous ...

    found significant domestic contraction in sectors as a result of FDI. Further to this, upon testing the persistence of these effects they found them to have a continuing significant negative effect for over 4 yrs. Again, upon testing, joint-ventures were shown to be more productive than domestic firms in the same industry.

  2. Toyota Motor Company Limited

    It produced new vehicles to serve this market and also plan to expand its business in this area, trying to compete with Ford in its own home. Europe: During the year of 2002, Toyota's vehicle sales in Europe continued to fare well, having sales rising from 690,000 units in the previous year to 730,000 units.

  1. Retailing In India - A Government Policy Perspective

    The Indian system has traditionally suffered from a high degree of ambiguity. Indian FDI policy decisions also severely suffer from a huge degree of ad-hocism. For example, the FDI policy in the power sector has been in a state of flux for a long time now.

  2. To what extent is the UK airline industry a contestable market?

    There are operating costs incurred as well such as fuel for the aircraft, catering services and maintenance cost which normally is very high. A source stated that the flying operation costs take up the largest proportion of total costs of an airline in general that includes pilot salaries and fuel.

  1. Chinese car market overview. Citroen case study

    For these benefits to be realised fully, it is essential that China implements its terms of accession in a timely and comprehensive manner; the monitoring of China's WTO compliance will be a major EU priority in the years to come.

  2. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    The table is a summary of percentage change in the growth rate through the years.20 % Change COMPANY 2004 �000 2003 �000 2002 �000 2001 �000 Turnover Bellway 13.0 19.6 11.2 11.7 Wilson Bowden 10.0 18.5 24.6 8.6 Cost of Sale Bellway 10.7 19.1 8.5 11.0 Wilson Bowden 5.8 12.4

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work