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全球营销战略、设计与创新 “全球化是一个过程，是对建立国际社会的繁荣和包容，尊重和公平对待世界各地的人们的一种共识”（阿里，2000年，PP8） 先进的通信技术和全球旅行的发展让世界变得很小。规模经济被广泛地应用于大型组织，成为优化单位成本竞争的一个主要因素。由于廉价的劳动力和自由贸易设施，印度，中国，孟加拉国和其他亚洲国家在开放工厂和出源分支方面是世界上最大的制造商和服务提供商。在全球背景下的组织必须集中自己的决定，适应与那些对企业的成功至关重要的国际趋势。 新的世界超级大国金砖四国包括巴西，俄罗斯，印度和中国。由于金砖四国巨大的经济推动力，美国的政治霸权已经开始变化了。2007年德国商品出口仍是世界出口（9.3％）排名第一，而美国（8.7％）和中国（7.3％）分别是位于第二和第三。 Global Marketing Strategy, Design and Innovation “Globalisation is a process that is built on collective understanding of need to establish a world community that is prosperous and tolerant and on respect for and equitable treatment of people across the globe” (Ali, 2000, pp8) 1.Aim Advanced communication technology and developments of global travel make the world so smaller. Economies of scale is one major factor which has been widely used in large organisations and optimise the per unit cost for competition. Ex. many of the world’s largest manufactures and service providers open factories and out source branches in India, China, Bangladesh and other Asian countries due to cheap labour and free trade facilities. Organisations must be focused their decisions in a global context where organisations are no more independent in this world and would be being up to date with international trends that are vital to the success of the firms. The political supremacy of USA has started change with new world superpowers BRIC (Brazil, Russia, India and China) due to their enormous economic boost. In 2007 merchandise export of Germany is still number one in world export (9.3%) while USA (8.7%) and China (7.3%) second and third respectively. The economic growth rate in Germany (1.6%), USA (2.2%) and UK (2.6%) has been beaten by new superpowers such as China (10.4%) India, (9.2%) and Russia (6.2%), in 2007. (Source, The Economist, 2007). West and East European countries are in an effort to strengthen in currency, free trade and their political image through European Union. Reducing monitory power , rising of unemployment, higher labour cost and adverse budget deficit will present major challenge in advanced economies. Environmental sustainability is focus as a major consideration of governments due to global warming, Ozone layer damage and CO2 emission percentage. The world trend is developing in the human rights, ethical labour practices and social compliance. Global trading regulations and practices , pertaining to Intellectual Property, IT development, new global trade zones and tariffs are making a significant support to international business. 2.0 Introduction 2.1 Assignment For an “Internationally trading company” of your choice, identify the key factors that impact upon the company from their external environment. Construct a marketing strategy that is will ensure organisational success across a number of national markets with specific reference to the levels of standardisation and variation. Identify the internal resources that are required to make the strategy a success with an assessment of whether these resources exist within the organisation. Evaluate the company’s effectiveness to design and create new products and services to address the changing needs in global markets. 2.2 Objective Wal - Mart is number one retailer in the world and it opens new stores in Asia , Europe , Africa and Lathin America which use acquisition or joint ventures. The aim of this assignment is to convince Wal -Mart to enter in to the Sri Lankan market ( 20 million population ) as a test market for the South Asia that consist of more than 1.2 billion population. Colombo is the main commercial town in Sri Lanka which would show different cultural as well as upper , middle and lower class people. Existing per capita GDP is around $2500.00 and the country expect $ 4000.00 within next four years. The country was in a 30 years civil war and end up in mid 2009 and now it shows rapid growth in every sector such as new sea ports , air ports , Hi ways, free trade zones , power plants and tourism. The new York time’s number one tourist destination is Sri Lanka in 2010 and this industry depicts significant growth in last one year. ‘Cargill’s Food City’ and ‘Keels Super’ are the main players in retail industry and their are many super market net works operate in the industry. This assignment’s objective is How Wal- Mart can enter in to Sri Lankan market with success. 2.3 Company Profile , Wal - Mart The Wal-Mart was success in China and now more than seventy five stores belongs to Wal-Mart. Main suppliers of the company are based in China due to Chinese economies of scale benefits hugely consumption by Wal- Mart which imports 26% of commodities from China. United Kingdom is Wal-Mart’s great hope in Europe with an established supermarket culture. The natives shaped in similar ways to Americans. Moreover in ASDA, Wal-Mart found a fellow traveller. The British firm was growing fast by using many of the same strategies that had enabled Wal-Mart to leave behind its humble beginning in Bentonville, Arkansas. (Ranchhod and Gurau, 2007) ASDA first opened its doors to customers back in 1965. ASDA is one of the UKs fastest growing retailers and employ over 170,000 employees across the business through out the Great Britain. Since 1999 ASDA was part of Wal- Mart, the US based company which is the world’s biggest retailer with over 7000 stores and 2 million employees’ world wide. ASDA has nearly 375 stores in UK. http://www.asda.co.uk (10/11/10. 8.00 am) The Wal-Mart, worlds’ largest retailer also had failed in the global business because of complexities of external environmental factors. The cultural and social differences are to be the main focusing and analytical factors in any environmental study. Other failing factor is implementation of similar global strategies to the another nations, It will be success in some similar societies like USA and UK but not in USA and South Korea. So the organisation is large or small they suppose to do a complete environmental studies before invest or implement a project in globally. 3.0 External Audit This can be discussed as macro and micro analysis. The external environment of the firm comprises the whole range of economic, social, political and technological factors that influence a firm’s decisions and its performance. However for most strategy decisions, the core of the firm’s external environment is its industry, which is defined by its relationship with customers, competitors and suppliers. (Grants, 2008) 3.1 PESTEL Analysis / Macro External environment is always deciding growth and profitability of the company and as a part of that, global macro environment is concerned with changes and trends in Political, Economic, Social, Technological, Legal and environmental issues. (PESTEL). 3.1.1 Political As political environment, host country’s government policies purely affected to global entry. Export restrictions, amount of government activities, barriers of financial flows become adverse effects to global business. The large companies like Wal–Mart neglect third world countries due to political instability , budget deficit, government debt, civil conflict within and between countries. There are more restrictions can be seen Asian countries like India such as corporate tax , import tariffs, limited quotas, payroll tax these are adversely effects to the global entries. Wal-Mart operate in 15 foreign countries, including China, Mexico, and UK. Wal-Mart entered in to the China with fewer restrictions after Chinese government release the country to the open economy and now Wal- Mart has 76 retail stores in China. Wal-Mart recently made an agreement to enter the Indian market in a JV with the Indian company Bharati Enterprise. This JV allows it to avoid Indian laws prohibiting foreign retailers still; the Indian government is receiving pressure to investigate from those who dislike Wal-Mart because of its market power and reputation. (Hitt and Ireland, 2008) Ending of a war that ran over 26 years brought a new hope of stability and unity to Sri Lankan politics in 2009. 3.1.2 Economic GNP and GDP per capita are main economic measurement indications for any country and they show monitory power and economic stability of the people. Labours are skilled enough to assembling of product or garment industry, investors like to entry for manufacturing because lo labour cost. Other economic factors are inventory levels, raw materials, currency exchange rates, and merchandise trade balance, financial and political health of trading patterns, balance of payments and future trends. In advanced economies, unprecedented public intervention has stabilized activity and has even fostered a return to modest growth in several economies. Developing economies are further ahead on the path to recovery, led by resurgence in Asia. (Annexure 1)#p#分页标题#e# 3.1.3 Social The rapid sociological changes happening in many countries affect practicing of labour and the nature of product demanded by increasingly diverse consumers, government policies and laws also affect where and how firms may choose to compete. . (Hitt and Ireland, 2008) In the social perspective of global entry is a prominent factor due to growth of the project population size, education level and social classes are main factors to be considered in the macro environment. Ex. Wal- Mart always tries to enter in to Asian countries like India due to population and income distribution patterns. If any company like to invest for production factories, in a country that must have a good young age population than old age population. There are other social factors towards attitudes such as materialism, capitalism free enterprise, individualism, role of family , role of government, role of relations , consumerism, environmentalism, importance of work and pride of accomplishment. 3.1.4 Technological Self scanning tills are widely used by Wal Mart in Japan, UK and USA. it is saving wages and minimises customer delays. Internet direct delivery system has achieved customer attraction because of its convenience. And the other technological factor is Wal- Mart’s auto ordering system. This is the modest technological development of the retail industry that has taken places all the orders from branches to depot through the computer system. Example when a product scanned through the till, it will order automatically. 3.1.5 Environmental Environmentalists always keep pressure on Wal- Mart, because of its position as one of the world largest companies. Wal- Mart was establishing ambitious goals such as increasing the efficiency of its vehicle fleet by 25% within 3 years and doubling the efficiency in ten years. The firm has targeted reducing energy use in stores by 30% and reducing solid wasters in the stores by 25% by over the three years period. Wal- Mart has agreed to invest $500 million annually in environmental technologies to be used in its stores. . (Hitt and Ireland, 2008). In UK, ASDA always try to minimise the issue of normal plastic carrier bags and it invest and try to introduce reusable bags. Company established recycle plants for plastics, card boards, bio/bakery by products , animal by products, glasses and all other hazards waste. In Sri Lanka there are not much environmental issues but government has many future plans. 3.1.6 Legal In legal perspectives minimum wage laws (UK minimum wage is ￡5.89 and it will directly increase the price of goods) high environmental protection laws ( recycling) trading standards (age restrictions of alcohol / tobacco and medicine and safety equipments/ fire works) union laws , patent laws, anti monopoly laws , Sunday closing laws ( ASDA 24 hour shops cannot be open before 10 am and should be closed before 5 p. m on Sundays) municipal laws and trading laws are specifically considered in the retail industry. There are no legal restriction in Sri Lanka to operate a retail supermarkets and present government wants to bring the investment from multinational companies like Wal-Mart. Threat of partnerships Formation of strategic partnerships with existing market leaders are viewed as a vital method of entering in to the retail Industry and expanding in to new markets. Those partnerships pave the way to form strong alliances, combining innovations and technological expertise with reputation and resources. . Threat of new entrants Remarkable market growth in emerging economies, low capital costs and convenience government policies on retail industry in South Asia facilitate new entrants to enter the retail industry. Diminishing market growth in advanced economies, investment costs for advanced technology and huge marketing expenditure needs to be made to create a brand image are the challenges for new entrants, which mitigate the threat of new entrants. Threat of substitutes Substitute is a product or service that appears different but satisfies the same need. Still small and medium scale shops provide credit facilities to their local and related customer groups so a significant market share has been captured by them. Threat of competition There is a high rivalry in the retail industry with specialty super market and small shops competing for the same market share. Cargills, Keels Super and Arpico are the main players in the field and there are some other super market have performing well such as Santra, Laugh super and Sathosa and Co-op city. Threat of buyers Buyers own the most powerful force in the super market industry. They have entire freedom to switch to Wal-Mart to another retailer . there are two loyalty cards schemes available at ‘Cagills’ and ‘Keels super’ and there by they can tie the buyers to the company. Threat of suppliers The main tool of Wal- Mart is under cut purchasing price with bulk quantity but Sri Lankan local brand suppliers still hesitate to offer big price differences to super market due to still small and medium shops sales are holding a significant market share. Retail Industry 4.0 Marketing Strategy for global market entry 4.1 How is the organisation adapting to external influence The strategy as a link between the firm and its external environment is the notion of strategic fit. For a strategy to be successful, it must be consistent with the characteristics of the firm’s internal environment, its goals and values, resources and capabilities and structure and systems. (Grant, 2007) M&S faced difficulties since 1998 in Britain, due to lack of fit between strategy and the needs of the external environment. In UK, M&S had failed to respond to shifting consumer preferences and new appearance to sourcing and supply chain management. (Grant, 2007) McDonald and Coca Cola, KFC are always use ‘licensing’ entry strategy to move in to the new markets. Nokia, Toyota and Boss are being entering in new markets using ‘simple export’ to the local agents or joint venture. TATA Indian giant ‘acquired’ multi million Jaguar in UK as an entry strategy to Europe market. Companies like Rayne Air and Easy jet start to market expansion with 4.2 Drivers of globalisation or global entry They can be categorised in making global strategies, Government drivers - trade policies, tariff barriers, subsidiaries for local firms, ownership, technical standards, host government policies Market drivers – similar customer needs, global customer requirements, transferable marketing Competitive drivers – independence between countries, competitors global strategies Cost drivers – economics of scale, favourable logistics, and country specific differences 4.3 Ansoff Matrix – Strategic Directions to market development. Holliman, research plan. As sited in Ansoff (1985) developed a matrix with particular focus on the level of market and product development identifying two factors as the primary criteria when identifying a market entry method. This stands in contrast with the work of Ohmae (1985) who claims that the first stage may always be export via agent. Following model describes that the market entry strategy adopted by organisations try to deliver an existing portfolio of products to new markets would only have to consider one factor, is the market similar or distant. Sri Lanka is a distant market for Wal-Mart and could be selected two main strategies call as strategic alliance or joint venture and acquisition or FDI Several strategies available for the global business that could be utilized in their market entry strategy. Most of companies looking for expand beyond their national borders and strategies are depending on the psychical disparity distance and cultural distance. Exports in similar market and Strategic alliance or JV for distance markets are considered as common entry methods. Ex. Spain exports their excess volume of fruits and vegetables to similar market in UK , Wal- Mart ASDA. China opened its refrigeration manufacturing factory in USA in year 2003 and produce 200,000 units per year with a high competitive market, this can be considered as existing product in distance market and strategy is strategic alliance. 4.4 Marketing strategies These can be applied in global business . Low price strategy – Lowest price offer than competitors with severe quality of good and services. Wal-Mart introduced ASDA in UK as low price strategy. It always compare the price with competitor on daily basis and adjusted on the consecutive day as lower than competitors. ASDA aim is to lower margins with high volume. ASDA has achieved 33 product Grocery basket lower price award by “Grocer” in 12th consecutive years. In Sri Lanka comparatively prices are high in supermarkets than the other shops. No frills Strategy- Easy jet shows low price combined with low perceived product benefits and focusing on price sensitive market segment. Major competitors ( eg. BA) have already established and not going to do further price deductions due to their high brand image. Hybrid Strategy - Companies are looking to achieve differentiation and low price simultaneously compared to the competitors. This used in global entry strategy. Grater volume can be achieved in the early stage and cost minimisation with outside differentiated activities are available.#p#分页标题#e# Differentiated Strategy - Market a product or service that has uniqueness and it’s differing from the competitors. Further, identifying key competitors’ strategies, new products introduction to new global markets can be seen in this strategy. Low price strategy is the most apposite to introduce to Sri Lankan retail industry by Wal – Mart because it would gain global economics of scale than the other available super markets. Wal- mart already has strong relation ships with Indian suppliers and Chinese suppliers so the same product will be getting significant huge profit volume to company. 4.5 Standedisation and Variation Supermarket cultures are not similar in every country. As example States and UK are having similar shopping culture but in Germans or South Korean consumers behave different way of shopping. Sri Lankan shopping behaviour is differ from the UK because people like to by different product from specialised places. As example fish shops, vegetable shops, wine stores and meat shops. And also the product categories are different than the USA and UK. As example less verities of crisps, frozen foods and tissues and more verities from local dry foods, spices, bakery and hot short eats. Most of the Sri Lankan super market consist of in store pharmacy and a convenience Mini bank. Many global brands has already established in the country and still they keep prestige prices rather than penetration prices due to get more profit. Ex. Nestle, Unilever, P&G, Anchor, GE , Pepsi and Coca Cola. However , the super market’s overall prices now become lower than small and medium enterprises. There are more opportunity to enter in to the industry as soon as possible using an appropriate global strategy combine with local cultural values. 5.0 Master Plan and Global strategy for the Project According to the above information, most suitable entry strategy is acquisition of a existing retail network in Sri Lanka Cargills , Keels Super and Arpico are main players in the industry and the Wal-Mart’s objective is to make the mechanism to acquire or joint venture with one of the above major players and also expand new stores. Cargills which own 150 stores island wide, is the main target for acquisition. It has $ 275 million annual turnover, 17.22% return on investment , 34.59% dividend pay out for 2009/10 annual year. (Cargills, Annual report 2009/10). This established in 1946 while quoted company in Colombo stock exchange and 69.98 % of majority shares belongs to Ceylon Theatres ltd and Cargills market value shows $ 386 million December 2010. (www.cse.lk/Cargills). Cargills consist of several subsidiary companies such as Cargills food processing ltd, Cargills Distribution ltd, Uni dill packaging and so on for its operation handiness. Cargills already consist of its owned brand concept products range and it well famous in the country. Expansion of this concept will be the main target area after the acquisition due to get rid of the undercut obstructions Cargills Food city is rated the forth most valuable brand in Sri Lanka by the brand finance index of 2009 and is also ranked among the top service brands in the country. Cargills food city was also shortlisted for the most responsible retailer of the year award at the world retail Award 200 and 2010. (Daily Mirror , Dec 14. 2010) The first step is get all relevant information about the company and do the feasibility study about the Cargills . If feasibility study show positive sign for investment the second stage would be invest 10% of shares Cargills from the Colombo Stock Exchange and get a membership of the board. The investment will be 22.4 million shares out of 224 million issued capital at rate from existing market rate LKR 196/- ($1.75) to premium rate LKR 264/- ( average LKR 230/-) finally the forecast capital investment for 10% ownership will be $ 45.92 million (average $ 2.05 x 22.4million shares). Thirdly , the Wal – Mart aim is to fully study about Sri Lankan retail industry such as legal barricade , competitor ownerships, competitor weaknesses , industry growth patterns, return on investment and government policies in industry. There are several intentions on this stage to the director, if Wal- Mart decided to stay in Sri Lanka as follows To discuss about acquired of another 65% shares of Cargills to Wal-Mart or/and To make relationship with two other main competitor Keels super for total or 75% acquisition or/and To discuss with Arpico super market to get total or 75% ownership or/and Lauaf super market is a newly established retail net work in the country. It is a one owner organisation and if the offer is fair enough he would sell his retail net work to wal – mart. These are the final options to major entry strategies to Sri Lankan market. After acquired or merge of one or two above options Wal- Mart plan is to established 50 new stores around the country. 6.0 . Resource allocation and Implementation Plan 6.1 SWOT Analysis This internal analysis would be main tool for the top management to get the general inspiration about the future projects. Strength and weakness are consider as in-house factors and opportunities and treats are external considerations. 6.1.1 Strengths Consolidated relationships with Chinese and Indian Supplier chain and operational excellence in China Japan. Global economies of scale , financial and technological capability and multi cultural experience. Renowned global brand name and ready undercut. 6.1.2 Weaknesses Implement similar strategies to everywhere Neglect cultural values. Opportunities 20 million population in Sri Lanka and their interest towards western style shopping. Faster growth after the thirty years civil war No major global retailer exist. Cheap labour , low rules/regulations, Less maintained expenses, less investment cost, good ROI, ready to joint venture. Higher retail price with remarkable gross profit margin. 6.1.4 Threats Government is more concern about local companies, barricade foe huge undercuts. Less volume of revenue and low portion of profit due to currency. Political disagreements with Europe 6.2 Market research Analyse all the information gathered from external audit and consider following issues as well. To indentify consumer feedback on existing company and Wal-Mart, identify potential new product which can be sold with high margins from Wal-Mart product range, potential towns for expansion of new stores, identify loyalty methodologies , get to know about cultural values and trends and competitor activities. 6.3 Define Objectives To position existing brand name in the country as high quality with fair price and achieve 90% awareness. To achieve $ 3 billion annual sales turnover within first 2 years To established 50 new mega stores within next 3years . 6.4 Strategic Gap ? In mapping the present strategy of Wal- Mart with its weaknesses and strengths and with future scenarios, the importance of focusing on the risk of investment in a middle income country. The minimum 80% investment may be recovered from re sale the company and the 20% of investment will be a risk factor due to premium amount paid at the acquisition stage but it will not be a lost if any other multinational want to buy it on premium. How ever $ 418.5 million investment need for the acquisition. Other net works values are less than this. 6.5 Resource Allocation Investment Initial investment $45.5 million will be allocated for first step get 10% share capital and another $ 273 million for next 60% share. Wal- Mart already consist of technological advance operating systems. Company can run as it is on this investment. To expansion of another 50 stores will be cost each $ 2 million which totally another $100 million. Brand name There will be $ 10 million extra cost to the company for building up brand name more strong . Human resources CEO may be from Wal-mart and the rest top ,middle and lower level managers will be Sri Lankans. There are many educated and experience retail industry employees available in Sri Lanka they have enough experience in USA, Middle East, Australia, Italy , Japan and UK. 6.6 Healing the GAP – Recommendations Upon reviewing consideration in detail, following are the suggested strategic options for drive forward in the next five years. –Issuing public shares to get the $200 million investment in the Colombo Stock Market – Acquire another competitive net work to the company to get rid of competition. _ Enter the other related similar market like India , Bangladesh, Pakistan with this experience. |
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