Friday, February 14, 2020

Memo to Paul Taylor - AM Equipment Term Paper Example | Topics and Well Written Essays - 1750 words

Memo to Paul Taylor - AM Equipment - Term Paper Example One of the major steps that AM should take is to prepare going global. This entails establishing of various managerial positions that will be responsible for overseeing effective distribution of the products in the new markets. In its efforts to enter the three foreign markets, AM should establish an export sales department. Based on the fact that the company is currently based in US, the export sales department will ensure linkage between the production facilities is US and the sales outlets in the three countries. Additionally, AM should employ skilled marketing managers who will be responsible for overseeing the company subsidiaries located in the foreign countries. One of the advantages of the export sales department and the hiring of experienced marketing managers is that new policies such as effective pricing, extensive promotion and creating strong customer awareness will be created. For instance, the company will emulate penetrative pricing policy (Joshi 47). Through this pol icy, AM will enter the new markets using low prices without compromising the quality of its products. This will ensure that it acquires large customer base. However, the company will need more financial resources to cater for the marketing managers wages. ... After preparing to go global, AM should find the right market that will provide ready market for its products and skilled human resources. One of the key factors to consider is the population of the foreign countries. Additionally, the company should take into consideration the competition, political stability and regulatory environment among other factors. Being one of the developing economies with large population, South Africa is a viable country that AM should enter. In the same way, Britain and Australia have strong economies and high customer’s purchasing power thus proving a market opportunity that will enhance the sales and the profitability of the company. It is also vital to note that in order to encourage investments, South Africa, Britain and Australia have flexible regulatory environment that is essential for foreign direct investments. For example, South Africa has entered into double taxation agreement with US. As a result, AM will not face a lot of taxation cha llenges that may hinder its operations in the country. Additionally, South Africa taxation for foreign companies stands at 35% which is not so high. One of the major aspect that make the three countries viable markets that AM should consider is that they experience political stability that is essential for foreign and local investments. Even though AM Equipment Incorporation will be exposed to stiff competition from the well established firm in the three countries, the company will undertake extensive advertisement and promotion thus effectively putting at bay its competitors. Based on the political and technological development in the three countries, AM will benefit from adequate availability of classical factors of production that includes labor, capital, land and

Saturday, February 1, 2020

Entry Mode in the Chinese Car Industry Essay Example | Topics and Well Written Essays - 6500 words

Entry Mode in the Chinese Car Industry - Essay Example As more and more manufacturing companies, operating internationally, face heavy domestic and global pressure and make increasing Foreign Direct Investment (FDI) abroad, the research of the entry mode decision has caught the attention of managers and academic scholars. In this regard, many theories, which identify and focus on diversified variables that influence the entry mode decision, have been developed. After several years of continuous growth, China is now the fourth-largest automobile market in the world next to U.S., Japan and Germany. Even the development continues at just half its current pace, there is a possibility that China could leap into second place in 3-5 years. Automobile executives, facing flat or falling sales in their home markets, predict that China will become their biggest market on the next decade. Thus competitions in the Chinese car market will become tough, which will eventually mark down automobile prices to a rational level and extend competition in price, quality and after-sale service. Since there is an increase in the number of wealthy Chinese yearly and that the recent statistics reveals that Chinese private citizens have overtaken the government in the purchased of car units, automobile giants both at home and abroad look at the Chinese car market as their prospect. ... Probably the mounting of sales is attributed to the car loan offerings of banks, series of price cuts for homemade cars promoted by a tariff cut in January and the construction of additional roads. There is immense untapped growth potential in China's automobile market. According to government statistics, last year car ownership was only 1.5 units per 1,000 persons over the global average of more than 90 units. Besides, statistics also reveal that in the next five years about 32% of China's urban residents intend to buy a car. These results bode well for car marketers both in China and abroad. Giant global automobile industries now are either responding with vast investment or reforming models like mini cars that most fit the Chinese family use. Following Volkswagen and Citroen, almost all of major car manufactures, such as General Motors, Ford Motor, Honda, Fiat, Toyota and Mazda, made investments in joint ventures with Chinese carmakers successively thus intensifying competition for market shares. Unlike the international automobile giants, China's automobile industry is fragmented. Of the 118 car manufactures in China, most are small, whereas its top five manufacturers produced 37 percent of total output in 2001. However, with the current low labor cost which is only one-twentieth and one-thirtieth of that in Japan, the government labeled China as a "pillar industry" that has great room for development. But still it is expected to be a difficult process and the need for Chinese government restructure the industry is yet to realize. With the commitments to the WTO in 2003, China has agreed to implement another round of tariff cuts for automobiles before ultimately reducing the tariff level for automobiles to 25 percent by 2006. Besides, China is also