Consider you are a International Marketing Consultant. A local firm believes it has potential to internationalize and were considering two countries. They have requested your consultancy in choosing one country. Your scope of assignment is to advice in the report format
1.Out of two, best country to enter
2.Appropriate mode of Entry
3.Analysis of the business enviornment challenges and their potential impact to the local establishment
4.Appropirate Marketing Mix Strategies in the country chosen
Your report should also include
•The organization and the product or service that was chosen to internationalize
•Reasoning why you believe the organization has potential to go international
•What are the main types/sources of information that you will access to assess the market potential of the markets in both those possible markets, and why would you use them?
•Conclude with recommendations.
Background of Dhiraagu Company
The process of taking the reach of the business out of the national boundaries is known as expansion. The report is being prepared in order to advice Dhiraagu Company to enter in which international market so that company can its increase its revenue and expand its market share. The report will provide the suggestions of two countries where they should expand its business along with the entry mode by which they can enter into the international market. Further, the report will do the analysis and will reflect the challenges and their potential impact on the local establishment. The report will also provide the marketing mix strategies in the chosen country.
Dhiraagu is the largest and leading telecommunication provider of Maldives; they offer digital services along with the complete range of data, mobile, TV services, internet, and fixed-line throughout the Maldives. It is the Maldivian first telecommunications company, and was situated in 1988 (Batelco Group, 2012). The Dhiraagu name is an abbreviation for Dhivehi Raajieyge Gulhun, Accurately: Association of Maldives. The world’s longest links of microwave over water are maintained by Dhiraagu. This link of 65 km through the equator links Fivahmulah and Gaafu Dhaalu- and hence Gaafu Alifu atoll. Dhiraagu has two substantial shareholders named as Government of the Maldives and BTC Island. 41.8% of holdings are with Government of Maldives and 52% of holding is with BTC Island (Batelco) and the remaining holding which is 6.2% are with the general public (Dhiraagu, 2018). The business of the company is depending on the commitment to providing innovative and creative services and products and a belief that places customer experience on high value. The customers of the company are government and corporate institutions, small and medium businesses, and individual customers. They offer complete solutions and provide particular needs ranging from common telephone services to multifaceted combined private solution of networking for global customers.
The company continuously try to fix the geographic hurdles and stay in connection with the customers by the country’s biggest distribution and retail network of 120 agents, 40 exclusive partners, approx. 3000 retailers, and 40 distributions across the country. In the Maldives, they offer the broadest coverage including 199 inhabited islands of the country, industrial islands, and all island resorts.
The Dhiraagu Company has potential to expand its business in different countries where the company can get new opportunities and can offer their best services to the customers of that country.
- The Dhiraagu is the largest telecom service provider and has a strong market position in the Maldives as they offer a complete range of internet, data, TV services, etc. The company is a well-known name in the telecommunication industry and it shows that they have a potential that they can place their services in the international market.
- Currently, the company is facing huge competition in the Maldives but the company is still able to manage its position and image in the market which shows that company will survive in the international market and will successfully face the cut-throat competition there.
- The company is successfully able to maintain the longest microwave links over the water of the world.
- The company believes in maintaining diverse human resource and culture in the organization and respect them which is an essential element for the success of the business. Therefore, they can operate their business in the international market and will not face such barriers in expanding their market share.
- As per the 2016 third quarter financial statement of Dhiraagu Company, the revenue of MVR 1.9 billion was recorded by the company in the year’s initial months. This is an 11% increase of the revenue in comparison to last year’s revenue of MVR 1.7 billion. The company has also recorded a net profit amount in this time duration which is of MVR 653 million. They earned a 16% increase in the profit in contrast to previous year’s MVR. Along with this, the company has also received MVR 617 million of revenue in the third quarter and it is 12% more than the third quarter of 2015 (Shaahunaaz, 2016). This data reflects that the company has potential to expand along with enough funds which are very important for the expansion of the business in various countries.
- Workforce or employees are very important to the success of the business as many organizations consider them as the backbone of the business. The Dhiraagu Company has employees who have skills and knowledge of the technology and has the capability to implement those technologies effectively. It shows that the company has potential to bring new software and services for the people of different countries and can contribute to the development and growth of Maldives and host country.
Potential to Expand Business
As the company has the potential to expand its business in different countries. So, it can be suggested that the Dhiraagu Company can expand its business in Egypt and India.
Egypt is also known as the Arab Republic of Egypt, which is located in Africa's north-east area; although a land bridge is formed by the Sinai Peninsula with south-west Asia (National Geographic, 2015). Therefore, Egypt is also known as Middle East Country. Egypt is a continent-wide country, which supports it in becoming Africa's major power, the Muslim world, the Mediterranean and the Middle-East. Approximately 1,001,450km2 (386,662 miles2) area is covered by Egypt and is surrounded by Gaza Strip and Israel in the north-east; Sudan in the south; the Mediterranean Sea in the north; the Red Sea in the east; and Libya in the west (Tour Egypt, 2018). Egypt is the 3rd famous African country and very popular in middle-east (Ask Alladin, 2018).
The average speed of internet in Egypt is of 2.2 Mbps (Sarwar, 2018). There are various other countries like Bangladesh who have a low internet speed of 2 Mbps but these countries are working hard to improve their stage but Egypt is disentanglement because of the deprived state of activities in the country presently.
India country, formally the Republic of India is situated in South Asia (Facts about India, 2018). By area, India is considered as the largest country, the most famous world's democracy, world's second popular country and the seventh largest country by area (Maps of India, 2015). The country from the south is surrounded by the Indian Ocean, on the southeast Bay of Bengal and on the southeast from the Arabian Sea. The borders of Bhutan, Nepal, and China to the northeast, Pakistan to the west, and Bangladesh and Myanmar to the east are shared from India. The Maldives and Sri Lanka are the neighbour countries of India. The maritime border on India's Andaman and Nicobar Island is shared with Indonesia and Thailand.
The internet speed in India is low as 2 Mbps, but the country is working hard to improve these situations (Sarwar, 2018). The Government of India is trying to contact from the international companies in order to increase the GDP and Foreign Direct Investment of the country. This shows that there is the huge scope for improvement and various companies have opportunities to invest their money in this country.
Suggested Countries for Expansion
The Dhiraagu Company can choose to expand its business in India in order to provide their best services in the country because in India there is huge scope for the international company to expand and government of India also supports and invite international companies to set up their business in the country.
The roads, airports, telecommunication, railroads, power grid, education are the problems in the country which act as major hindrances as the country wants to attain its maximum economic potential. The on-going development and rising incomes have been demanding the enhanced and improved infrastructure, for the economic growth and delivering public services (Gov Export, 2017).
Protectionist Policies and High Tariffs
Investors and Exporters face tariff, often impulsive regulatory and non-transparent system or rules. Many services of U.S. have restricted entrance to the market. As per the survey of World Bank on the topic of easiness of operating business for 2016, 130 was the rank of India out of 189 countries because of its challenging climate of business (Kashyap, 2014).
Powers of State
In 2014, Andhra Pradesh was divided and converted into two states i.e. Andhra Pradesh and Telangana. Companies who are planning to invest their funds or wants to operate their business in India such as Dhiraangu should be ready to face these changing economic and business conditions across India with 7 union territories and 7 union territories. In India, decision making and power are decentralized, with changes at the state level in labor relations, quality of governance, political leadership, education levels, taxation, and regulations.
Attitude towards Authority
Conventionally a caste community with origins in Hinduism, Indian culture have high prominence on status and authority. Communication between stages is comparatively closed therefore the important employee vision or proposals in subordinate positions will be shared hardly with the superiors (Aswathappa, 2010). If Dhiraagu Company will not study or understand the Indian attitudes and their impact on business then they have to struggle in order to bring change as fast as possible and can fail in relating the value and experience of their employees.
The culture of Indian business concentrates majorly on trust and relationship building in place of working quick and hard towards the particular objective of business. The course of cultural awareness supports a lot to the business operating in India because it helps in developing strategies in order to avoid frustration, unable to achieve the tangible outcomes, delayed projects, and common clatter as an outcome of various partialities for associations and tasks and courses.
Introduction to Egypt
Indians like to communicate in unintended high context communication. In other words, they like to look at the complete picture, which plays important role in maintaining relationships, they even give importance to the emotions, body language and they avoid saying ‘no’. The variance in the style of communication can affect and result in the big challenge for those organizations who prefer interacting in low context and direct way (Budhwar and Varma, 2010).
Concepts of Time
Polychromic culture is followed in India. In other words, people like to change main concern areas India is a polychronic culture, in other words, people tend to change priorities on the basis of their depending on their attitudes and position towards promptness are relaxed. Many international organizations need devotion to firm’s deadlines and quick decision-making, therefore they struggle to manage the time as it cannot be controlled (Maclachlan, 2010). Training of Cultural awareness can provide support and help Dhiraangu Company to understand the time concept and generating strategies so that they can deal with them.
The number of possible candidates becomes less if an international company starts operating in the location near to the local business. This is due to the capability of the international company of hiring maximum people, and local business will be left with limited applicants (Johnston, 2018). It results in an increase of wages by the local business to grab talented applicants. In addition, the local businesses have to provide improved benefits to the applicants in order to compete with the international business offerings.
Importing New Technology
The local business can be benefitted with the entrance of an International business in the local boundary. This is being said because these international businesses bring new technologies in the host country. These new and innovative technologies can help in reducing the wastage of resources and saving time. Along with this innovative and advanced technology provide a way to the country towards the development and growth (Lambregts, Beerepoot and Kloosterman, 2015).
Awareness of new concepts, methods, and cultures
We live in a world which is comprised of many countries and people of those countries follow various cultures, religions, values, concept, theories, methods, etc. If an International company opens its office in the host country then it will be beneficial because it will help the host country to know more about the international country and their people. Along with this, the International Company bring its concepts, theories and methods which are applied in business along with them which provide a new direction and though to the host country.
Internet Speed in Egypt
The competition increases if an organization set up its business from the home country to the host country. This competition may be linked to the target market, technological adaptation, service and product, fast production by companies, cost and price, and quick response, etc. When a business manufactures products at low cost and sells it cheaper, then it helps in increasing the market share of the company or business. When a company produces with less cost and sells cheaper, it is able to increase its market share.
In the market customers get a vast variety of product's choices which influence their behaviors: they just try to obtain services and goods fast and in an efficient manner than before. Customers also anticipate high quality at low price. All these anticipations want a company's response, otherwise, company's sales will decline and they might be able to lose a big market share and profit. A company should always be prepared for service, product and price and preference of customer because all these aspects are the requirement of the global market.
Transfer of Knowledge and information
The most valuable and expensive factor of production is information in the present environment. It can be exchanged and transferred easily from one country to another country. If the company gets a chance to make use of information and knowledge then it will be considered as the capability of the company of adopting global changes. The fast-changing market requires the fast exchange of knowledge and effect use of that information and knowledge (Jones and Lluch, 2015).
Office building and new stores may be built by a big international company which offers employees new and modern surroundings which a local company might not be able to offer. It includes advanced technology such as computer keyboards build ergonomically, work-friendly lighting. Local companies may provide or maintain safety conditions which can meet the standards of government, employees may notice that the international company provides provisions of safety above and beyond the least requirements. International companies’ employee may be able to find employee-friendly and comfortable surroundings.
The international company mostly bring advanced and better products in the host country’s market, and the local business of host country should observe them survive in the business. It reflects that local business should accept corresponding products and technologies. This is because the international companies have many resources at their disposal; they have the opportunity to explore in the host country’s market (Davoren, 2018). Mostly these type of markets is untouched by the local businesses, which frequently focus their processes on trading their services and goods. Therefore, local businesses have the chance to grow by arriving in the new markets that are uncovered by the international companies.
Introduction to India
Mode of entry
There are various ways through which Dhiraagu Company can enter into the market of India such as Exporting, Licensing, Franchising, Joint Venture, Wholly Owned Subsidiary, etc. The telecommunication market of India involves various companies who are offering services to the people of the country along with that they are facing cut-throat competition in the Indian market. The name of the companies to which Dhiraagu Company have to give strong competition and have to make their position in the market are Airtel, Idea, Jio, Vodafone, etc. Further, the company should go for the joint venture with Airtel in order to enter into the market of India.
Joint Venture is the most popular entry mode in which two companies syndicate their assets in order to sell services and products. Various organizations with strongly organized economies, like China, frequently need foreign companies to work with China's local company if they are willing to sell services or products to the citizens of China (Wolfe, 2017). Though, Joint venture offers foreign companies with a companion who is experienced in the international market, these types of partnerships can be challenging to accomplish and require an excruciating of profits (Management study guide, 2018).
The business organization selects Joint Venture as an entry mode for the foreign market for some reasons such as to influence each other's strength, sharing risk with partner party, etc (Shishido, Fukuda and Umetani, 2015). Though, for the success of Joint Venture, the objectives of both the companies should be same in regards to sharing of technology, satisfactory levels of risk and rewards of the host market, obeying the laws of government and joint product development (Shepherd, 2006). Joint Venture repeatedly flourishes if the following situations are existing among the partners: small market share, and have the ability to learn from each other without compromising their intellectual property or competitive advantage (Trost, 2011).
The Dhiraagu Company can pursue Joint Venture in order to get access to the Indian Telecommunication market. This is been suggested because Airtel is the leading company of India in the sector of telecommunication and facing strongly and huge competition from other competitors such as Idea, Jio, and Vodafone. Dhiraagu Company and Airtel both want to become the leading company in the world and want to provide network facility in every single area. Along with this both, the companies can support each other effectively and can grow.
Internet Speed in India
Dhiraagu offers a wide variety of services to its customers in the sector of Telecommunication. The detail of the product is explained below:
Mobile Services: Dhiraagu offers both data service and voice services to its customers. Presently Dhiraagu Company is the world's longest microwave links provider over water. It offers various plans for data and voice services. The services of Dhiraagu are classified into Post-paid services, prepaid services, Tele media services, etc.
In order to sustain in the market of India, the company should prepare the recharge plans according to the need and income of the citizen of the country (Bhasin, 2018). They should offer various plans, packages so that they can attract customers and in this Airtel, Company can guide them as they are expert in this field.
Dhiraagu can follow the pricing strategies of Airtel Company in the market of India. They can follow the competitive pricing strategy because of the high competition in the sector of telecommunication in India from the companies like Idea, Reliance Jio, and Vodafone (Kittu, 2016). TRAI (Telecom Regulatory Authority of India) is the one who monitors the pricing strategies of all the companies operating under this sector to confirm that the prices that are being charged from the customers must be fair (TRAI, 2017).
Dhiraagu should offer the flexibility of selection to its customers and make especially their plans as per the salary and preference of the customer. This pricing strategy will help Dhiraagu Company in retaining their customers by providing combo offers in order to boost the revenue. There are maximum chances that the company will face price war with Reliance Jio Company and other telecom companies. Along with this, the customer loyalty is zero under this sector everything depends on the service prices. Therefore, the company should plan to provide data packs, calling and SMS at low cost.
The Dhiraagu Company should offer its services through retailers and distributors, which makes the source of marketing mix place strategy. The company can make use of roadside stalls, convenient stores, retail stores, etc. so that each customer can avail the services of the company. The company can provide its services through chemist's shops, paan shops, groceries shops, etc. The Dhiraagu Company become the part of ‘Project Leap’ which was in traduced in 2015, with the aim of expanding the marketing share and networking of the company. Further, the company may start its 24 hours customer support team which will assist or guide the customers if they face any problem and it will also help the company to reach a maximum number of customers.
Challenges in India
In order to become a well-known company and establish the brand in India the company needs to organize an advertising campaign for its offerings by exploiting all the channels of media such as social media, events, print, TV, etc. The strategy of promotion should be very effective so that it can attract a maximum number of customers (The Economic Times, 2018). Further, the company can make use of famous celebrities of Bollywood such as Sachin Tendulkar, Shahrukh Khan, Vidya Balan, A.R Rehman, etc. in order to promote its services same as Airtel does (Marketing Mix, 2017). The Dhiraagu Company can arrange some marketing campaigns to attract the youth audience. The company can become the part of various events by sponsoring them such as Grand Prix, Cricket matches, etc. Along with this the company can enter in maintain its social corporate responsibilities through campaigns of education, awareness about girl child, etc.
- From the above discussion, it can be recommended that Dhiraagu Company should go for the Joint Venture as a mode of entry in the market of India. In India, they can partner with Airtel as this is the most famous company in India and face huge competition from other competitors.
- The company should do full study or research on the telecommunication market of India in order to identify the opportunities and threats present in the market.
- Dhiraagu Company should be well prepared in terms price, product, and customer preference and services because these aspects are counted under important aspects and are required in the global market.
- The company can follow the footsteps of Airtel Company in order to sustain in the market and to increase its market share. There is no harm in following the partner company, in fact, it is beneficial because it helps in identifying the weak areas.
- Dhiraagu Company does not need to transfer labor from its home country, it can get labor at a low price in India which help in maintaining the budget and funds of the company.
- The company should always follow and respect the rules and regulations formed by the government which will help them in maintaining their image good in the eyes of country’s government and people.
Dhiraagu Company is the famous company of Maldives and in the conclusion, it can be suggested that if they want to expand their business in another country than they should go ahead for the Indian market. This has been suggested because India is the biggest market where the company will get a maximum number of opportunities and can grow in that market. The above report has provided the brief description of the Dhiraagu Company along with the reasons explaining the potential of the company in order to expand its business in overseas market. The report also includes the description of the potential market (Egypt and India) where the company should expand and India has been selected for the expansion of Dhiraagu Company. Further, the report has also explained the challenges that can be faced by the Dhiraaga Company in the Indian market. Impact of Business Environment of Dhiraangu Company to the Local Organization of India has also been explained in the above report. After this the report has also provided the mode of entry i.e. Joint Venture through which the company can enter in the market of India. Along with this marketing mix strategy is also provided in the report to analyse the potential of the company and how it can properly establish in the market.
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