Analysing the opportunities and risks that would be faced by a company operating in a particular branch of manufacturing or services aiming to set up operations in a particular foreign country

University Degree Business and Administrative studies

SINGAPORE

M.Sc. in International Marketing

Essay: Analysing the opportunities and risks that would be faced by a company operating in a particular branch of manufacturing or services aiming to set up operations in a particular foreign country.

Table of Contents

Contents Page

Introduction………………………………………………………………………..2

Foreign Direct Investment (FDI) in the Singaporean Economy………….……3

2. Hypothetical Profile of our Company…………………………………………..5

2.1 Background…………………………………………………………………..5

2.2 Why Mind&Body wants to go international ? …………………………….6

2.3 Analysis of the potential market ……………………………………………6

2.4 PEST Analysis ……………………………………………………………….8

3. Market Entry Strategy …………………………………………………………10

3.1 Marketing Strategy………………………………………………………….11

4. Service Marketing Mix …………………………………………………………13

4.1 Promotion Mix …………………………………………………………..…14

Conclusion-Recommendations …………………………………………………..15

References …………………………………………………………………………16

Introduction

Singapore consists of the island of Singapore and number of few tiny islands. It is located just north of the equator off the southern tip of Malaysia. Singapore, a highly developed and successful free market economy, enjoys a remarkably open and corruption-free environment, stable prices, and one of the highest per capita GDPs in the world. Since 1959, Singapore has been governed by the People’s Action Party (P.A.P), and from 1990 up to now, the prime minister has been Lee Kuan Yew.

Singapore’s success in attracting foreign investment is undoubtedly spectacular and its ability to exploit FDI for wider economic development may provide lessons for other countries. This paper examines the material linkages between foreign-owned companies and suppliers based on the island. Backward linkages to indigenous suppliers of materials have traditionally been considered one of the main ways in which FDI develops the host economy (Hirschman, 1958).

Henderson and Appelbaum (1992) claim FDI is only significant for economic transformation when it stimulates local firm production linkages and/or results in shifts to higher value-added forms of production within the subsidiaries of multinational enterprises (MNEs). Furthermore, it is generally accepted that the level of local supplier interaction is perhaps the key indicator of corporate embeddedness (Dicken et al., 1994). Another reason for the importance of linkages is the fact that linkages (i.e. supplier firms) may actually outlive the initial investment made by the MNEs, therefore contributing to long-term economic development.

Therefore, Singapore is possibly the best example in the developing world of FDI-led economic development (Huff, 1995).

1. Foreign Direct Investment (FDI) in the Singaporean Economy

In fact, it would be accurate to say that MNCs play a bigger role in Singapore than in almost any other economy in the world. The massive amount of foreign direct investment (FDI) brought in by the MNCs has served as an engine of growth ever since the country’s independence in 1965. Although both developed and developing economies compete fiercely for FDI these days, Singapore adopted a liberal open-door policy toward foreign investors long before it was fashionable to do so.

The combination of a strongly pro-FDI government and generally favorable environment meant that Singapore has been and continues to be a highly attractive location for foreign capital.

Table 1 below clearly illustrates the magnetic appeal of Singapore for foreign

investors. Since Singapore’s population in 2004 was 4.3 million, of which 3.5 million

were citizens and permanent residents, per capita FDI inflows were over US$3,700

and almost US$4,600 if we exclude foreign residents.

Singapore has consistently had one of the world’s highest per capita FDI inflows for the last three decades. Relative to the rest of the world, investment by foreign companies has played a relatively larger role in the total investment of Singapore.

2. Hypothetical Profile of our Company

We will focus in Mind&Body plc, a health and fitness club chain of Greece, investing in Singapore by building a new Club. After evaluation over several factors the Singapore will be analysed with a PEST analysis. Afterwards different possible market entry Strategies will be analysed.

A target market will be chosen and Mind&Body will be positioned in its environment. Therefore, the marketing mix adapted to this situation will be created in order to maximise the chances of high profit in this new market and make the most of this opportunity.

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