(2) Factor conditions:
An important strength of it is that it is the first company worldwide to develop its business model and ITEC has been doing this business more than 10 years. Therefore, it has no strong competitors in franchising (Unique, cost-effective, secure, 2011). Furthermore, it has different channels to do its business. In each city its franchisee has traditional media to carry out advertising, besides, there are more than 10 million pages are viewed a month. Therefore, its network is promoted indirectly to professional users (Gay, Charlesworth, & Esen, 2007). All these channels would bring more business opportunities for it.
(3) Related and supporting industries:
On the one hand, Google and some other search engines are the mainly support platforms for it. And its optimal positioning in these engines makes 85% of visits to its network. The universality and excellent development of these engines in the UK would make it easier to enter to its market. On the other hand, the services and products that it provides to its franchise partners allows for a solid business with great potential for growth. And each portal is managed by a company in that city. This company is responsible for updating the local content, such as the news, calendar, company profiles, etc. It is a daily task to make the website appealing to users and the franchisee. The situation of these partners would bring many opportunities for it.
(4) Demand conditions:
The Competitors in the UK market is less and they are not stronger than ITEC. With the popularity of the internet and the change of the lifestyle of citizens, the demand for this business of ITEC is very large. The number of the people who would search the information through the internet website is very large and sustained growth.
(5) Government and chance:
Besides, the aspects of government would bring opportunities for its entering. For example, UK’s government issued many policies to encourage FDI (Greenaway & Richard, 2007), and the affects of WTO and European Union would bring many chances for it (George & Manasis, 2010) (see appendix 1).
With the analysis based on these two analysis model, this report concludes its key opportunities:
(1) The mainly marketing methods are internet and franchises. Internet is a very popular marketing method and it would save the costs of its business. Franchises would bring some advantages, such as reducing the risks, providing more resources and enhancing the corporation. However, relying only internet makes its marketing and strategy single and franchises would reduce its profit margin.
(2) Its experience for business. ITEC has approximately 10 years business about it in Spain. And this experience would make its business in the UK market simpler. However, its international experience is not enough and this would be the barrier for its entering.
(3) Its excellent situation of the related and support companies, such as Google. The excellent situation of its related and support companies would bring many benefits for it. For example, this opportunity would reduce its risks in the UK market and it would make it get an excellent reputation. However, over-reliance on partners should make it not aggressive to achieve the success.
3. Recommendations and Implementation
Based on the analysis about the key opportunities of ITEC to enter to the UK market, this report has the recommendation that differentiation strategy would be appropriate for it to enter to the UK market.
On the one hand, from its key opportunities, it mainly uses the internet to do the business, but its method is very simple. Thus, differentiation strategy is very appropriate for it to improve this opportunities to enter to the UK market. The effective differentiation strategy should be applied in its strategy based on the Porter’s Competitive strategies (Barney & Hesterly, 2007). ITEC has an excellent business in Spain and there are many opportunities for internationalizing, such as it has no strong competitors in the UK market, it has the different distribution channels in Spain and it has many different products and services. All these factors help it achieves the success in Spain. Thus, applying these opportunities in the UK market is very important for it.
On the other hand, some complementary strategies should be applied by it to implement differentiation strategy better and improve its key opportunities. Business strategy has four components and they are distinctive competence, scope of operations, resource deployment and synergy (Fred, 2007). From the perspective of distinctive competence and scope of operations, and in order to improve the third opportunities, reduce the costs and risks, co-business strategy and strategic alliances should be applied by ITEC to implement differentiation strategy (Stonehouse, et al, 2004). Considering the costs and risk of these strategies, co-business and strategic alliances should reduce its costs and risk to explore the UK market. From the perspective of resource deployment and synergy, and in order to improve its second key opportunities, this report recommends that vertical integration strategy is very useful to implement differentiation strategy (Robbins & Coulter, 2007). This business of ITEC is mainly sell franchises for advertising, and it has the professional technology and the excellent experiences. Besides, the strong search engines are the support related industry. All these opportunities attributes to its vertical integration strategy to get the differentiation advantages in Spain. Therefore, if it wants to get an excellent scope of operations in the UK market, the vertical integration strategy would be applied in its internationalizing in the UK.
The implementation for its differentiation and other complementary strategies should follow the following aspects:
(1) It should develop the different products and services and find the different media to corporate with them to get the differentiation effects.
(2) It should find the strong relative companies in the UK to corporate and make the strategic alliances with them. Absolutely, before their corporation, the in-depth analysis and evaluating about these companies should be the necessary step (Mellahi, Frynas & Finlay, 2005). Finding the companies which have the strong strength and excellent reputation is significant for its success.
(3) It should find the local resource and take advantages of it. Besides, reinforcing the management and corporation in any link in its management chain is significant. Absolutely, expansion of product portfolio and applying its commercial equipment available to carry out the business are the vital aspects from the perspective of the organizational structure and management systems in its international strategy.
4. Appendices
Appendix 1
Appendix 2
Fiugre1 Porter’s diamond model
Source: adapted from George, G. & Manasis, G., 2010
Appendix 3
Appendix 3 the costs of its business
Source: (Accessed: 3 April, 2011)
5. References
A whole range of possibilities (2011) (Accessed: 3 April, 2011)
Barney, J. & Hesterly, W. S. (2007). Strategic Management and competitive advantage. 2nd edn. New Jersey: Pearson education.
Fred, D. (2007). Strategic Management: Concepts .11th edn. Harlow: Pearson.
Gay, R., Charlesworth, A. & Esen, R., (2007) Online Marketing – a customer-led approach. Oxford: OUP
George, G. & Manasis, G. (2010) ‘Analysis of Competitiveness of Greek’s Olive Oil Sector Using Porter’s Diamond Model’, Research Journal of International Studies, 16, PP.33-46
Greenaway, D. & Richard, K. (2007) ‘Firm heterogeneity, exporting and foreign direct investment’, The Economic Journal, 2007(2), pp 134-161.
Mellahi, K., Frynas, J.G. & Finlay, P. (2005) Global Strategic Management. NY: Oxford University Press.
Richard, L. (2009). Strategic Management. 5th edn. Harlow: FT Prentice Hall.
Robbins, S.P. & Coulter, M. (2007) Management. 9th edn. Pearson Education, Inc.
Stonehouse, G., et al (2004) Global and Transnational Business: Strategy and Management. 2nd Edn. Wiley press
Unique, cost-effective, secure (2011) (Accessed: 3 April, 2011)
