Discuss about the Effective Method of Develop Business Case.
The discussion in the report is based on the plans of an organization to expand their operations in another country. The organization that is taken into consideration is Amul India. The countries where the expansion of the company is planned are Australia and UK. The international expansion of an organization refers to the strategy that includes the strategy related to market entry of an organization including the important choices related to market focus, determining the target customers and channel strategies and allocating resources. The expansion plans of the organizations and activities related to business activities in all regions throughout the world is related to international expansion (Weaver et al. 2014).
Strategy related to market expansion proves to be attractive if it is able to determine the increase in sales and profitability of the organizations. International expansion also refers to the strategy of the organizations that is related to the growth of business in many other regions within or outside the boundaries of the country where the business operates. This is mainly a strategy related to the development of business or strategy related to marketing the products in new regions as well. There are many different ways by which a business organization can enter the new market and continue their operations smoothly (Hutzschenreuter and Horstkotte2013).
About the company
Amul is a dairy products based organization which is based in India. The company is mainly based in Anand which is situated in the Gujarat. The company was founded in the year 1950 and the brand of Amul is managed by the cooperative body named Gujarat Co-operative Milk Marketing Federation Ltd. which is owned jointly by around 3.6 million producers of milk in Gujarat. Amul had started the white revolution in India which helped the country in becoming the largest producer in the world of milk and products related to milk as well. The founder or chairman of Amul was Dr.VergheseKurien for a period of almost 30 years, that is from 1972 to 2006. The products of Amul are presently available in almost 60 countries of the world. Amul became a registered company on 14th December 1947, which was a response to the manipulation of the producers of milk (Amul.com 2017).
The company was awarded with the “Best of all” award which was a Rajiv Gandhi National Quality Award. The organization has developed technically over the years in all the production units in India. Amul is well-known for its innovative advertisement policies and ways by which the advertisements are presented by the organization. The organization hired the managing director of a famous advertising agency to design the ad campaigns for Amul butter. The advertising agency was successful in designing many advertisements as well as hoardings for the company. The advertisement was also awarded a Guinness World Record as it was the longest running advertising campaign in the entire world. The Amul butter girl had become a famous character in the entire world. The character of the advertisement was celebrated in the entire world (Amul.com 2017).
About the products
The products of the organization include various types of dairy related items including, butter cookies, chocolate cookies, jeera toast, milk bread, multi grain bread, pizza base. The major products of Amul include the pure milk that is produced by the company. The butter that is produced by the company is considered to be the best in the market. Amul also manufactures many different types of cheese including gouda cheese, mozzarella cheese, cottage cheese or paneer. Flavoured milk products as well as curd related products are also manufactured by the company. Amul also manufactures powder milk, skimmed milk and many types of chocolates and ice creams as well. Amul exports its products to more than 60 countries of the world (Amul.com 2017).
The products of Amul are loved by the consumers all over India as well as the places where they are exported. It can thereby be said that Amul fulfils all the requirement of a product mix of an organization. The product mix of a company can be defined as the set of products and the items that are offered by a particular organization. Amul fulfils all the various categories of the product mix including the width, depth, length and consistency.
About the target market
The segmentation of market for the Amul Company can be done based on the various factors which include the geographical, demographic, behavioural and psychographic factors related to the market where the products are offered. The company has designed the advertisement policies based on the area where it is being offered and the climate of the area as well. The population of the country or state also affects the ways of marketing the products in the market. The demographic factors include the age, gender, the size of the family, income, religion or education related to the market of the area. The psychographic factors of the market segmentation include the social class, lifestyle as well as the attitudes of the people of the area where the product is marketed (Urbiztondo, Bonardi and Quélin2013).
The behavioural patterns of the people of the area where the products are marketed also influence the target market. The target market segment of Amul include, kids and the products that are offered include, chocolate, Amul Kool, Amul Milk, Energy Drink and Nutramul. The other target market segment of Amul includes women for whom the products that are offered by the company are AmulCalci+. The third target market segment of Amul is the youth and the products offered are Amul Cheese, Amul Cheese Spread. The calorie conscious members of the population are another target segment including, Skimmed powder milk, AmulLite butter. The health conscious people are another major target segment Amul. Amul has been able to cater each and every market segment and fulfil their needs and demands as well (Ginevi?ius and Ostapenko2015). The company has also attempted for industry based segmentation of the market which includes the segments of milk, butter, ghee or cheese. Amul has been targeting the mass market segment of the entire population and it does not offer ant premium products.
The countries that are chosen for expansion plans of Amul are Australia and USA. These two countries have a dynamic and strong market related to foreign investment and Amul can gain from the economic strength of these two countries.
The government of Australia is based on a stable democracy. The state has a lot of say in the economy and plays various roles in the parliament as well. The government intervenes in various factors related to the international business environment which include, subsidies, tariffs, currency controls, import quotas, financing related to exports, administrative policies and free-trade zone. The government of the country is however quite stable and the tax system is also favorable for business, the communication and infrastructure of the country is also world-class in nature. Amul can therefore think of expanding its operations in this country and increase their scope of business as well (Wu and Chen 2014).
The political environment of USA is based on a strong political and democratic setup and effective rules and regulations are set up and the fair elections are also held. USA has a strong influence on the making of policies of the various countries of the world as well. The country is considered as a global superpower as well. Amul can find a huge market opportunity in this country and they can expand their operations in USA to increase their profitability as well (Lynch and Jin2016).
Australia has free-market and vibrant democracy and has shown huge economic progress in the last 25 years. The Australian economy is highly developed in nature and it is also considered as one of the greatest economy which is mixed market in nature. The GDP of Australia is around AUD$1.69 trillion. Australia is considered to be the second wealthiest nation after Switzerland. Amul can therefore plan its expansion in this country and try to establish its operations as well. The strong economy of the country will give a boost to the sales of Amul (Falkner 2017).
The economic factors of USA are also quite favourable for the business expansion plans of Amul. The country has a strong GDP of more than 16.760 trillion dollars and it is also the largest as well as the strongest economy in the world. Amul can therefore plan for expansion in USA as India already fruitful business relations with the country and they will be able to gain a lot from this expansion (Sarooghi, Libaers and Burkemper2015).
The regulatory obligations related to business are quite essential in Australia. The laws and regulations are designed so that it can ensure sufficient protection, fair competition for the parties as well as the integrity in the business market as well. The laws related to business are flexible in nature and the procedure is made to open up a simple business(Iacoviello2015).
The legal environment of USA is highly regulated in nature and the business organizations wishing to operate in this country need to be aware of the various legalities that are related to the business, the guidelines and the standards as well, which can thereby affect the sales of the organization. Amul Company therefore needs to regulate its business activities based on the rules and regulations that are laid by the US government. The business market of USA is also quite competitive in nature (Schaltegger and Wagner 2017).
Australia has been an attractive destination for the investment plans of foreign organizations. The country is considered as one of the richest countries and has enjoyed huge economic expansion in the last two decades. The business environment in Australia is quite competitive in nature and the major sources of exports in Australia are agriculture and mining. Amul can gain a lot from the financial situation in Australia and establish its operations in the country (Thomas 2015).
The strong economy of USA acts as a positive financial factor for any organization which is planning to expand its operations in the country. The high GDP of the country depicts that the income of the citizens is also quite high. The expenses related to the operations of the organizations can however be quite high and this can thereby affect the profitability of the business as well. Amul has to therefore try to use the reputation that it has in its own country top established a market in the country (Frias?Aceituno, Rodríguez?Arizaand Garcia?Sánchez 2014).
The social environment of the country is diverse in nature and the people are also quite young. The level of education in the country is also quite high and this has also helped in raising the awareness among the citizens (Aithal 2017). The national culture of Australia has been shaped by the female population more as compared to the male population. The society of Australia is multi-cultural in nature and English is the primary language of the country. The multi-cultural environment of the country will help the citizens to accept any new business. Amul can gain its ground in the country quite easily (Franks et al. 2014).
The cultural or social base of the country faces many problems related to the increasing age of the population and this can therefore lead to a shortage of lab our for the business organizations that are operating in the country. The rates of taxes in the country related to business can also lead to immense problems for the organizations as well (Samson 2014).
Assessment of the opportunities and challenges related to the business
There are different opportunities that can be properly ascertained by Amul as this will help them in understanding their different issues that can be properly solved by them. This will help them in exporting their products in other countries as well as this will help them in increasing their power in other countries and grow their importance as well (Bharti and Sengar 2017). Proper export strategies has to be adopted by the company as this will help in exporting their different products in other countries and this will help in increasing the turnover of the company along with their margins in an exceptional level. This will help the respective company in expanding in other markets as well in other countries (Leonidou et al. 2015).
Furthermore, Amul needs to properly concentrate as well as focus on the chocolate market as this will help in creating different policies related to advertising their different products and this will help in advertising their different other products (Sondhi 2015). Amul needs to have a proper as well as separate SBU as this will help in concentrating more on increasing the product line through different kind of chocolates as well as other similar products (Verbeke 2013). This is essential in nature for Amul to understand their different opportunities as this will help in spreading their business internationally and this will help them in understanding the different issues that is faced by the organization and sort such issues with increasing the product line as well (Chidlow et al. 2015).
On the other hand, there are different threats of Amul from other competitors in the competitive market. There are different other competitors in the market in the local, international market those who are entering into the international market and this is a kind of threat to Amul as the other companies who are taking away share of wallet from Amul. There are different brands such as Kwality walls, London Dairy as well as Havmor those who are competitors of the Amul in the market (Brannen, Piekkari and Tietze 2014). Amul needs to properly analyze the different strategies that are adopted by the competitors in the market as this will help in analyzing such marketing strategies and this will help them in adopting such strategies in the market and solve such issues as well. As Amul is trying to expand their business in the international market, it is essential for them to understand as well as analyze the different brands that are performing best in the international markets in USA as well as in Australia and this will provide them proper guidelines in order to introduce new products in the chocolate segment and reach different parts in the entire world as well (Cavusgil et al. 2014).
There are different strong competitors of Amul in the market that can hugely affect the business of Amul and this will reduce the market share of Amul as well. There can be economic slowdown in the market and the rate of inflation can affect the entire business and this will have negative impact on the business as well. There can be different seasonal fluctuations in the production of milk in the entire market as this will affect the production in the entire market as well. Amul requires expanding the product categories in the Australian as well as USA market and this will help them in expanding their market in different areas as well.
Recommended international strategy
The transnational strategy that is adopted by Amul is transnational strategy as this will help the entire company wherein the different global business activities are properly coordinated between the different operational divisions in the company in different franchises as well as retail outlets that are being located locally as well as internationally (Khandwalla 2014). A proper transnational strategy helps in offering different benefits of centralization that is provided by different global strategies along with local responsiveness characteristics of the different strategies that is domestic in nature (Tripathi, Shastri and Yadav 2015). Amul requires a proper transnational strategy in terms of proper global integration as well as responsiveness. Amul recognized a proper overseas market that required extremely high degree local responsiveness and this will help their business to grow internationally as well in different regions in an effective manner as well.
The value chain requires to be properly analyzed as this will help in taking into consideration the different cultural, legal as well as economic environments. Proper analysis is required to be done by Amul on the external as well as internal environment as this will help in analyzing the different requirements of the customers as this will help in setting a new business in different regions as well as sectors (Abbasi 2016).
Different strategies related to the marketing of different products of Amul can help in analyzing the different innovation, accountability as well as responsiveness of customers in the competitive market as this will help in addressing the different issues in an effective manner. The proper emphasis has to be provided on the different issues that will have positive impact on the investments as this will help in gaining huge amount of return as well.
Recommended mode of entry
The entry mode strategy that can be properly adopted by Amul is franchising technique model as this will help in reducing the cost of different turnovers and this will help in gaining huge amount of profit from different retail outlets as well. the market entry strategy is the properly planned technique that can help in delivering different goods as well as services to the target market and this will help in distributing in different retail outlets as well. The franchising strategy will help in proper establishment as well as managing different contracts in foreign countries such as Australia as well as in USA (Caballero-Anthony et al. 2015).
Proper franchising technique is essential in nature as this will help in applying the proper business model of other firm as this will help in proper distribution of goods as well as services. Amul will properly adopt different techniques as this will help in gaining proper success in the business in the competitive market. There are different advantages in franchising technique that can be applied by Amul wherein there is proper freedom of employment along with there is proven trade mark as well in comparison to the competitors. There is reduced risk of failure in the market and this will help them in delivering proper proven products as well as services.
There will be different international market strategy that can be adopted by Amul as this will help in understanding different additional considerations and this will help in understanding the different strategies as well that will help in lowering the risk as this will require minimal investment. There will be huge potential profits in the business in the adoption of franchising technique and this will help in increasing the amount of profit as well. When Amul will be expanding their business in the international entity, this will help them in granting other independent entities as to perform their business in a better manner (Caballero-Anthony et al. 2015).
Therefore, it can be concluded that proper transnational strategy has been adopted by Amul as this helped them in understanding the different potential profits that can be gained by them. Proper ascertainments have been made by Amul by properly applying the franchising technique as this will help in understanding the different forms of marketing techniques. The different political, legal, economic as well as social factors has been considered by Amul as this will help them in expanding their business internationally and this will enhance the different marketing strategies as well that will help the business to move in a positive manner as well.
Franchising is a proper technique that can be applied by Amul as this helped Amul in improving the business and this will help in improving the business activities that has been performed by them both globally as well as in the local retail outlets as well. The financial analysis has been conducted as this helped them in understanding that Amul has to expand the business in such a manner that this has helped them in expanding their business in other countries such as USA and Australia as well. The opportunities and threats or challenges has been analyzed properly as this helped in understanding the different issues that can be faced by Amul from other competitors who are dealing with same kind of business internationally. The different opportunities has been properly implemented by Amul as this helped them in creating their position in other countries as well and this helped them in expanding their business both locally as well as internationally.
Therefore, it can be recommended that the threats can be analyzed properly by Amul as this will help in expanding their business in different countries and this will help them to create an opportunity for themselves as this will help them in expanding their business without many difficulties in other countries both locally as well as globally as well. The franchising technique can be properly applied by Amul internationally as this will help in analyzing the different disadvantages that can affect the business of Amul and try to adopt such marketing strategies that can help them in improving their business in an effective manner as well.
The different implementations has to be properly analyzed by Amul as this will help in reducing the issues and this will help in gaining a cost effective business that will help them in improving the business as well. Lastly, proper cultural factors has to be considered as this will help in mixing different cultures in different parts of the world and this will help in generating awareness among the different citizens in the different parts of the world and this will help in improving the awareness that is important in nature.
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