Question

Starting your own business-Step 1: business Idea, Licensing and setting the Marketing Objectives. Scenario: You and your two friends were fed-up with the routine job activities. You all were graduated from the same school and had jobs in marketing, software development and consumer electronics sales. Having good understanding of the business and the market of your own industry, three of the friends met in a coffee shop and decided to start their own business and wish to enter into international market. (Born Global) You agreed to do something in consumer electronics, since it is believed to be a good potential in international market. (or any other product/service of your choice) Task 1-13-International Business ideas, Research and Structure 1. Discuss among your friends about the licensing and registration in any of the International Market 2. Determine the estimated startup cost of your company 3. Proposal of investments (partner's contribution) /funding from banks etc. 4. Develop the organizational structure with goals/Objective 5. Develop the Marketing goals/Objectives 6. Select the international market and briefly discuss the history, legal system culture and demographics 7. Discuss your product/service its features, USPs 8. Discuss you capabilities, structure, culture leadership, employees, technology etc 9. Develop a SWOT analysis of your product/services (PESTEL) 10. Based on your SWOT comment why you think that you should pursue this product into that specific international market 11. Who are your customers/segmentation strategies? 12. What approach you would adopt for your pricing, advertising, and promotion strategies. 13. How would you enter into the market and why (international existence/entry strategies) "Please don't focus on exporting

Answer 1

The fast-growing advancements in technology means that the barriers across geographies and cultures are disappearing and newly set up businesses can also venture in international markets with a higher success probability. There can be various ways a local company can go global and enter new markets:

1. Exporting
2. Licensing
3. Contract manufacturing
4. Joint venture
5. Direct investment

Let's assume we are thinking of extending our very own consumer electronics business (called XYZ) in India. We have our initial company set up in the US

We start with the PESTEL analysis:

Political Situation:

1. The government is currently very welcoming of outside companies and is providing its support in opening the business as well as establishing the manufacturing units in the country under the 'Make in India' initiative
2. Similarly, the FDI policies in the country has been changed to increase the participation of foreign brands
3. However, the problem of corruption lies within the country which can act as a barrier to the take off

Economic Situation

1. Greater focus on globalization
2. Increasing disposable income of the population
3. Cheaper labor cost in the country as compared to US
4. A controlled inflation rate and fiscal deficit

Social Situation

1. Country's median age is 27 which makes for a younger workforce in the country
2. Government's initiatives through Skill India program which enhances the efficiency of the workforce here

Environmental Situation

1. Higher emphasis on environmental protection by the EPA in India
2. E-waste management initiatives run throughout the country

Technological Situation

1. Increased internet connectivity and a rise in tech savviness throughout the nation
2. Make in India initiative bringing people more closer to technological advancements globally

Legal Situation

1. Better taxation through the inclusion of GST in the country

The analysis tells us that it is a good time to enter the market. Next, we do an analysis on the route/mode of entry that we will take to get into India.

Hypothesis:

Our company XYZ prepares low-entry level smartphones (<INR 2000) and targets individuals with a desire to own a smartphone but at a much cheaper cost.

In this case, our best bet would be a Joint venture with an already established company in the region which doesn’t cater to this particular target market and can use the JV as a way to expand its own profits in the country without the fear of cannibalization

Our USP will also be the same that we provide smartphones at highly aggressive price points while providing competitive specifications

Since our product is in the low-entry level price band, it would mean that we are targeting the Tier 2,3 and Rural population in the country. In this case, we will have to use Television marketing and BTL strategy to tap and get customer attention. Digital won't be very good from an ROI perspective since that section of the society still relies heavily on press and TV as its medium of entertainment.