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Strategy for Entry in the Swedish Market for Solid 55 Ltd

Extracts from this document...

Introduction

Portsmouth University, UK Final Project: STRATEGY FOR ENTRY IN THE SWEDISH MARKET FOR "SOLID 55" LTD Mihail Velikov Bachelor of Arts in Business Administration Sofia 2004 I, the undersigned, declare that this project is my own original work, and I give permission that it may be photocopied and made available for inter-library loan. 14.05.2004 Sofia Mihail Velikov, Signature Synopsis The main object for discussion in this final project is a real manufacturing company called "Solid 55" Ltd. (Solid 55). It has been in the doors industry for about 12 years and is one of the first in it. The discussion below will have the purpose of reviewing the company's past and present actions by putting them into strategic terms. The main focus will be on how the firm can grow and as it is obvious from the title above one way is through exporting its production. Of course, the routes through which Solid 55 reached the position from where to start considering internationalization will be first depicted. What is crucial for successful export actions is the analysis of the potential markets situated outside of a company's home country. The analysis presented below is based on secondary data mainly and is indicating that the country chosen is worth being analysed by primary means of research. After having chosen the foreign market it is important to review the possible entry strategies and to pick the feasible options. Such a review combined with knowledge of a firm's tangible and intangible resources will result in the choice of an entry mode that will best fit the company's profile as an exporter. Last but not least this final project will produce conclusions which will actually be suggestions to Solid 55 on how to begin its exporting actions. Synopsis iii. List of Tables and Figures vii. CHAPTER 1. THEORETICAL BACKGROUND 8 1. The environment, the company and its strategy 8 1.1. The Environment 8 1.1.1. Structural drivers of change 9 1.1.2. The Market 10 1.2. The Strategy 11 1.2.1. ...read more.

Middle

Several new machines were purchased with the purpose of increasing productivity, decreasing wastage, decreasing costs and increasing profits. The purchase of the punching machine will play an important role in the process that I am describing in this chapter - keeping leadership in the luxury doors market and gaining a leadership position in the low-class doors market for Solid 55. The managers of the company gave the following forecasted figures as final results from the application of the new equipment: * increase of output approximately 1.3 -1.5 times; * increase of revenues approximately by 20 %; * increase of sales of metal doors approximately 200% (according to forecasted demand); * increase of profits by 20 %; * increase of the number of corporate customers by average of 15 %; * decrease of production costs approximately by 4 %; Source: (Grant Application Form of Solid 55 for Technology Grant Scheme) 5. A novel product The strengths that Solid 55 gained throughout the years in the door industry and the opportunities that changes in the macro-environment create gave the company the chance to invent a novel product. 5.1. Description of Smart Lock TM and the Always Locked Transponder Door TM The idea used for foundations of the Smart Lock system is quite original and simple at the same time. An industrial GSM-module, which commands an automatic locking mechanism, is installed in the door. It could be activated only when a call is received from a number preliminary entered in the memory. One major phone number is entered in the GSM-module's memory at the initial installation and this number only is delegated with the administrative rights (usually this is the number of the building's administrator or the company owner). Then, allowing or rejecting access to a certain individual to the building and the premises inside is literally performed in a few seconds by sending an sms12 from the administrator's phone to the Smart Lock module. ...read more.

Conclusion

Chapter 4 has the purpose of presenting some main concepts concerning the possible ways through which SMEs might enter foreign markets. The discussion is related to the final part of Chapter 1 by clarifying the advantages and disadvantages of the methods which in my opinion are suitable for a company like Solid 55. The profile of the company as an exporter is related to the motivations and the capabilities it possesses. I have prepared a comparison table on the basis of all the factors mentioned above. It has the purpose of classifying the different methods into "feasible" and "not feasible". The result showed that piggybacking and home-based own sales force are the ones that are both feasible and preferable. The main reasons for that was their relatively high levels of control (level of control in piggybacking is low but is higher than EMCs and trading houses) and high level of involvement in the process of internationalization. Another advantage of these methods in my opinion is that they could be performed simultaneously and independently of each other. Of course, there are disadvantages for both methods - for piggybacking this is usually the substantial bargaining power the "carrying" companies posses. For the home-based own sales force the main disadvantage are the high traveling costs and long training times if Solid 55 decides to hire inexperienced personnel. Both methods have one and the same disadvantage which is related more to the nature of the ALTD. It requires high levels of servicing at the installing stage and also at thr after sales stage because of the specific technical components integrated in it. A possible solution to this problem is the preparation of an exhaustive user's manual or outsourcing the installation and after sales servicing to a local company. Of course, not all threats could be detected before starting to implement a certain strategy and that is why Solid 55 should be flexible and be ready to counteract to unpredicted events. ...read more.

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