Factors That Regulate the Economic Structure of the Industrial Environment
Prepare a research report of industry characteristics that will affect an organization entering in that industry.
To understand industry organization, an individual needs to know about the factors that regulate the economic structure of industrial environment. The characteristics of industrial organization can be determined from the effects that influence the economic and other factors of an industry when a disparate company launches product from their industry (Tedeschi2013). The industry should have growth prospects in order to attract small companies or B2B companies to engage into business deals with them. While many B2B company have their own industry, some of them perceives greater prospect in selling or launching their new product in other industry rather than their own industry (Hutt and Speh 2012). The industry which has higher economic value or possesses greater institutional capital stacked in economic market tends to tempt many prospective B2B companies in indulging in doing business with them. Industries like Microsoft and Google has supplied their ideas to other companies and industries as they saw that this will assist them to gain stature in global market.
Mitsubishi group is a cluster of companies that manufactures different automobile parts and engineering equipments. They are the autonomous bodies; associatively form an industry called Mitsubishi heavy industry. The industry hugely supplies machine tools, equipments, engines, automotive components to other industries. They are largely associated with B2B business with aerospace, defense, and ship building and energy industries. The size of the industry is huge as they have 300 companies all over the world. Recently they have been successful in doubling their market sales so that they can maintain their pace with the competitor company such as G. E Corporation and Siemens AG. They supply engineering equipments. It has become the largest manufacturing firm of Japan who both manufactures and supplies machineries. The industry also manufactures ships, automobiles and aircraft. Mostly they are associated with activities that are related to defense.
Rovimatica is a Spanish technology company that has invented a new technology in the field of robotics and wants to show case their products and manufactured equipments on an influential company in order to gain fame in market. Mitsubishi has been dealing with Rovimatica for many years as they are online electronic equipment providers and their sale value is lower than other trading companies. The company is involved in manufacturing, building and designing electronic equipments. Mitsubishi is highly influential industry and lately, they have thought of launching a robot that can be placed in hospitals for 24 hours patient surveillance purpose. Rovimatica has their own ecommerce site and they sale their products. They are the B2B Company who has newly designed a robot and wants to sell it to Mitsubishi.
B2B introduces to the situation where a commercial undertaking takes place between two organizations (Lilien 2016). In this case Mitsubishi has taken up the liability to promote the Spanish robotics company commercially.
Mitsubishi in this case will be buying the product which is manufactured equipment.
- This is a complex transaction that takes place between the buyers and sellers and buyers may extensively negotiate as they are in most cases more powerful than the sellers(Visweswara, Gohad and Rao 2012).
- Target marketing should also be searched in order to get a clear perspective about the consumers or the target customers.
- B2B is a very complex and extensive process when it comes to decision making. The company may hire a team in order to make feasible decision whether the product has the potentiality that the company can give it its name.
- Purchasing personnel is the official decision maker who makes decision about the transaction process.
- Technical team is hired in case of electronic products that will ensure the product has no technical defaults and contacts the suppliers giving them time to time information about their product(Hirvonen, Laukkanen and Salo 2016).
- It is the commercial transaction that defines the role of manufacturer and the wholesaler.
Impact of Economic Growth Prospects and Institutional Capital on B2B Companies
In a B2B business the client is not a customer rather the business is the client itself. This draws the conclusion that as when a business is serving another business more attentions needs to be given. It is like nurturing a two way relationship. The client should be sincere about his product and should ensure that the buyer is satisfied with his product. Stereotyping is a common problem in B2B business if privacy is not adhered then the ethically it may confront undesirable outcome. Demand of the market is also important in B2B.
Key players in this case are Mitsubishi and the client Spanish company Rovimatica. They are connected to each other because Rovimatica wants to sell their robotics product to Mitsubishi. Now a day, B2B markets solely depend on networking sites (Janita and Miranda 2013). The transaction procedure also takes place via internet. This can be very risky because there is always a chance of receiving faulty products. The cost of sales and purchase becomes low as the cost of transaction is lower. It is a techno product that is being discussed here so extensive confusion about its design and sustainability can bring uncertainty about the launch. It is a new product so the industry in concern here will go through the designs and go through the data to ensure about its sustainability. The article published by Jolibert et al. 2012, broadly discusses about the importance of the purchasing professionals holds a valuable position in business.
The key business consumer in this case is Mitsubishi. The company is launching the product made by the other company that means the industry is supporting company commercially. The consumer here is not the customer it is the industry which will buy that product for selling purpose. Industry analysis is tool that determines the weakness and strengths of a company who is interested to enter a new industry(Grunig 2013). Mitsubishi saw that Rovimatica is a company that is trying to launch their product for the first time and has a name in the market as successful online trader. The company assessed that Mitsubishi is a big name and a new product launch under their label would mean greater profit. The competitive aspect of an industry is highly useful for measuring the sustainability rate of the industry.
Mitsubishi is a big company and their background history foretells the success story about the goals that they have achieved. Undeniably they are the best that a company can get acclamation that is about to get launched. The key industrial characteristics that can be observed are as follows:
- Historical performance is a significant attribute which is assessed in case of industry. The industries that have strong past history can provide best opportunity for the new product launch.
- A flourishing industry like Mitsubishi will never face constriction in case of labor. They have enough supply of both technical and non technical labor.
- The geographical regulation of Mitsubishi is massive. They are famous all around the world.
- According to Michael Porter the potentiality of profit of an industry depends on five factors threat from the new entrants, rivalry that exists between the other existing competitors, bargaining power of the buyers and the bargaining power of the seller.
The company who is trying to launch its new product will always search for economic stability which will not hinder the production process of the product. Due to low economy many potential product suffers rejection at the manufacture level. According to Biegl et al. 2014, cross functionality in case of marketing of robots and secondly the product should be able to diminish the semantic communication barrier between the user and the supplier. In the journal published by Foss and Knudsen 2013, Competency theories that can be implemented on firms are discussed. It is the theory that talks about the perspective of competence that an industry needs to use their capital strategically in order to achieve long term goals.
Case Study: Mitsubishi and Rovimatica's B2B Deal
The article published by Kohlbacher and Rabe 2015, extensively discusses about the innovations and the future prospects in the field of Robotics. There are several ways a market can be segmented. The marketer needs to decide about how the segmentation can be done or the suitable strategy that will enhance the profitability of the product. The location of the consumer is important in determining the geographical segmentation of the market of the product. Demographic segmentation detects the age, social class, income class, family, race etc. Demographic variables are utilized in order to get a clear perspective about the preferences that the consumers have. Robots are something that is of high value and they are rarely used for private purpose. The journal published by Lotz et al. 2014, illuminates about the complexity of the technique and possibility of failure that looms on the mechanism of robots. Still robotics are widely accepted. They are mostly used in industrial purpose or military purpose. Recently medicinal field has also shown interest in robotics(Völter et al.2013). The high profile nursing homes are slowly replacing their facility with bots. That is why the target customers are those people or industries those who can afford such luxury. So the consumers should fulfill the demographic categorical aspects like thriving, expanding, rising and aspiring. Mitsubishi is an affluent industry that has the capacity to survive the demographic challenges and has the power to draw consumer from the expected sectors of community.
Mingling with high profile industry like Mitsubishi can draw attention towards the new company and its product. Industry is the key tool to develop the competitiveness to defend the other competitors of the market. The launch of a new product means facing several difficulties and obstacles from the market. That is why a company searches for a suitable company that has power and competitive strength to dominate other market competitors. A financially strong industry will be able invest capital for the products that has high market potentiality. An organization or a company will be ultimately gaining from this situation. Their product will be launched safely without any financial barrier(Tan 2013). Marketing and channeling should be done because the social channels are the effective way to spread the news about the new product. Robots are technology based products that is why public demonstration should be arranged. It is not unusual that a technical may not take place. Technical team needs to be hired so that these kind errors are sorted out before it gets public exposure.
When the product is being manufactured concept testing and product testing should be done in order to understand how much the product will be popular when it will be launched. The design of a robot should be market appropriate. Its weight and energy saving capacity are the factors that should be kept in mind. Philip Kotler, the theorist has rightly said a product should serve the utility of the consumer. Marketing strategy is all about reaching the desired goal applying a comprehensive plan. The product needs to be the right mix so that it can earn market profit and sustain the market storm(Wu, Zhang and Li 2013). Market research about the product should be made to see the past history about the market. Robotics is a field that has been successful in capturing the attention of audiences. Expertise is needed in order to retain consumer attention. Techno market has to have one quality, the ability to catch the target audiences by surprise so that they get stuck with amazement. An industry that supports innovations in the field of technology and also acknowledges potentiality in budding companies should be approached for projects that have ample potential(Gooderham et al. 2013).
Mitsubishi is a company which has extensive grip on the field of technology. Robotics is a field that needs a systemized plan in order to achieve long term success. Undoubtedly, it is a cost heavy production process. The plan of the product or the product itself should be reliable enough to engage the sight of the consumers. If a company wants promote or launch a new product from other potential industry, it should be kept in mind that a strategic plan should be followed. Marketing is not a constricted discipline it involves a lot of study and involves the whole organization. Communicating about individual vision and strategy helps in developing a plan that is market sustainable. A team should be strong enough to realize the value of the project and act accordingly keeping in mind goals which has to be fulfilled. The field of technology is greatly dependent on cost, time and efficient technical team. An industry should know how to entice consumer attention and make their products worthy of the market.
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