Market Entry Strategy
Discuss about the Distribution Planning Problem in Docking Networks.
Foreign market entry is always challenging too many organizations, since there are still numerous challenges faced ranging from competition, international law and regulations, social and cultural differences, inadequate workforce, economic and political stability among many others. Therefore, it is important forever company contemplating to go global to have extensive knowledge about the company. This paper will explore various strategies that will be used to introduce UUG into the United Kingdom Market. The plans include market entry, competitive, pricing, promotion and the distribution strategy of UGG boots from Australia.
During the initial process of organization expansion, the first aspect to be deliberated is always market entry and strategy. Market selection refers to the process by which a company uses to decide on the market to invest in. Selecting the right market and determining the correct entry always ensure the success of the business (Poturak & Dunman, 2014) .The process still requires the investor to understand the marketplace and the customer thereby having a conceptual framework of the market growth, and how it will affect the product and services. The significant factors that contribute to market selections are the firm related factors and market-related factors: the firm associated factors entail the expansion of the UUG boots, an aspect that is possible in the United Kingdom.
This is favored by the number of people in the United Kingdom, that total to about 66.57 million people that assures the company a broad market base. The United Kingdom has high purchasing power parity of about 90.99, standing at number 20 in the global ranking and have a strong economy worth about $3,152 billion. The senior population, robust economic status, and the high purchasing power, the United Kingdom market is the best selection among the options. On the other hand, the firm related issues of the UGG make the United Kingdom the best selection since the boots are designed in a stylish way, an aspect the most of the UK population love, hence will attract a large number of consumers. Secondly, the boots are of good quality material offering the product an essential primary selling point. Thirdly, the product variety catches the attention of all gender hence have a more substantial demographic factor.
Market entry is the process of taking the new product into the targeted market and always considers different aspects such as the size of the opportunity, barriers to entry, and the projected and historical growth of the market. Generally, there are still about six market entry strategies used by the international business. The plans include franchising, licensing, alliance, mergers, and acquisition, exporting and joint ventures. Therefore, it is upon every business organization to choose the best strategy depending on the information gained from the market research done prior the investment.
For the UUG boots, the best market entry strategy is the joint venture. The joint venture is an entry mode that entails a partnership formed by two or more companies that are already in operation in the expansion market. UUG Boot Company may join other companies such as Deeasjer, NPS Solovair, Tricker’s or any other in the United Kingdom to provide easy access to the market. Joint venture choice has a significant number of advantages to a company theta is expanding its market share into the international market, especially into a completive one (Abdul-Rahamn et al., 2014). The selection of the joint venture will help UUG to access the new market, increase capacity and distribute any risk that might be faced. Additionally, through a joint venture, UGG can get specialized stress that has information about the United Kingdom market hence enhances the marketability of the product.
In every market, there is always competition received from either existing companies or threats posed by potential entrants. Competition still affects the business operations and must always be addressed strategically to ensure that the company remains relevant in the market .these is achieved through a competitive strategy (Wiggan, 2015). Competition strategy refers to the designed long-term plan that dictates and makes a company to gain a competitive advantage over others. The approach focuses on creating a defensive position and generation return on investment. Four competitive strategies were designed by Michael Porter; these are cost leadership, differentiation, cost focus and differentiation focus. The choice depends on the level of competition in the market and the company's goals.
For the UGG, the best competitive strategy would cost focus and differentiation focus. Through differentiation focus, the product’s uniqueness in the United Kingdom market will ensure that it has equal opportunity with other brands such as Tricker’s in the United Kingdom. On the other hand, through the cost focus, the company will ensure that the products are as low as possible compared to the existing potential competitors to build the initial customer attention and loyalty by attracting as many as possible.
The popularity of a product always depends on the marketability strategies employed. Among these strategies, product pricing played a significant role in capturing the attention of the consumers. Low prices attract many customers. However, a good number of customers tend to relate low rates with low quality. On the other hand, high product prices deter away some customers as the products seem expensive, but to some extent, such products are always considered of good quality. Therefore, pricing is a challenging aspect of many organizations, especially a startup. The different pricing strategies include premium pricing that is used in introducing new products into a distinct competitive advantage over similar products; and are always priced higher than the competitor.
The penetration pricing still lower than a competitor is used to get broader access to the market. The economy pricing used to set prices at the bare minimum making a small profit by selling a high volume of products and finally the skimming pricing used to establish product price while there are no competitors. UGG footwear, the best pricing strategy will be penetration pricing to set the price in the United States. Jointly venturing with an existing company in the UK, the use of penetration strategy will aid in marketing the product in the new market. High quality with many prices will attract the attention of many shoe buyers.
Promotion is an element of the marketing mix that aims at creating awareness of a product to the potential customers hence increasing the volume of sales. There are different kinds of promotions; these are advertising, sales promotion, personal selling, and publicity.
The best promotion strategy for the Australia UGG is personal selling, coupon and adverting. Using the coupon and the discount, on the Australian UGG boots, customer’s attention is guaranteed. The reduced prices create to enable the promotion, and more customers spread the word the more they buy the product. The marketing staffs from the UK Company who have enough knowledge on the market will assist Australia UGG in penetrating the market through face-face selling.
This opportunity will enable customers to get a full insight of the new product and spread the positive aspects through word of mouth. On the other hand, a large number of people use the internet and spend a lot of their time using social media sites. Therefore, Australia UGG will employ social media advertising to capture the attention of a considerable number of customers who are on the social media platforms. Through creating Facebook accounts, twitter accounts, and website, many people will have to see the pictures, prices and location of the shops hence can make a stop or make an online purchase.
Distribution always enables the products and services to reach customers where they are. The distribution strategy refers to the set of independent organizations that ensure that the process by which a product or service is available for customer use. Apart from creating availability of the product and services to the final application, the distribution strategy provides customer service, help in negotiating the terms and also help in promoting the product (Javanmard, Vahdani & Tavakkoli-Moghaddam, 2014).
There are different kinds of distribution methods such as the middlemen, the agents, the wholesalers, the retailers, the distribution, the dealer and the value-added resellers. The choice of the distribution strategy depends on the product, the market structure, and level of competition. Australian UGG best’s distribution strategy would be the use of retailers, and the wholesalers as these two channels will help in promoting the product and increasing the volume of sales at the same time.
From the above exploration, it is evidential that every organization going global has to do extensive market research to determine the barriers that may hinder or facilitate the entry. Market entry and strategy are essential as they allow the organization to adopt the best method to ensure survival among the existing competitor. The approach will enable the company to have the best pricing and distribution strategies for the products to have a better competitive advantage over other products. Therefore, it is recommended for the Australian UGG boot to follow the above approach to have a successful entry and growth into the United Kingdom.
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