Bunnings Group Limited: Market Entry Recommendations for Singaporean Market

Brief Introduction of Organization

Bunnings Group Limited is an Australian multinational company owned by Wesfarmers since 1994. It operates in Australia, New Zealand, United Kingdom, and in Ireland. The company was initially founded in 1887 in Western Australia and performed activities such as sawmilling. Later on in 1952, the company becomes a public company and simultaneously expanded its operations in retail industry, and in hardware stores. In 1990s, organization started expanding its business in the overseas market and with this effect; company opened its first warehouse style store in Melbourne in 1994.

Bunnings currently operates in more than 300 store locations along with the retails chains such as Home Timber and Hardware, Mitre 10 and other retailers. With this effect, organization has 20% market share in the Australian retail hardware industry. Company’s product offering is wide and huge. They provide unique and useful products for DIY projects, for builders as well as fancy items which are useful for renovation type of procedures. Along with this, they also provide fittings for bathroom and kitchen, flooring materials, lightning products, paint, hardware and tools, window furnishings, etc. (Bunnings Warehouse, 2018).

The aim of this report is to expand the business of Bunning Group Limited in Asian countries with the objective to increase their revenues and presence in the international market. While executing the research methods, organization observed that the Singaporean market will be more suitable for Bunning Group limited in order to expand their operations. Bunnings Warehouses are not reached to the Asian countries and for enhancing their international approach, Singaporean market have been chosen.

The report will include the research methods used for selecting the market, market entry strategies in order to attain the desired goals and the objectives. Apart from this, the report will include the market strategy recommendations under which the company’s PESTLE and SWOT analysis will be performed. The next of the report will include the marketing mix recommendations through which an effective position will be developed in the Singaporean market. Along with these strategies, promotional and advertisement strategies will also be covered in this report with the objective to enhance the market presence of the organization in the international retail chain industry.

In order to select the target market for the organization with the motive to increase their global presence, Singaporean market has been chosen. Singapore market has been selected due to numerous vital elements such as presence of big retail companies in and the emerging economy rate. Apart from these elements, organization is able to uplift its performance in the target market with the help of its own services and product offerings. Only few competitors are available which performs the same functionalities as of Bunning Warehouse.

Evaluation of Selected Target Market

Their unique products and services are the major reason for their success and growth, with this; they had developed an effective position in Australia, New Zealand, and Ireland and in United Kingdom’s market (Tabrizi, et. al., 2014).

In the search operation of the target market, organization has used secondary research method which is also known as the desk research. In this research method, organization could utilise the information already researched by the philosophers, newspapers, journals, articles as well as through digital platforms. Information shared by websites could also be used for reaching to the final decision in relation with the motive to expand the business operations of organization in the international market.

This method includes internal desk research and the external desk research and it helps the organization to determine the most appropriate technique in relevance with identifying the market conditions of Singapore with the motive of setting up an effective position in the target market. This will help the organization to acquire the distinct market share in the target market along with determining the opportunities to expand the business in the international market (Water, et. al., 2014). 

There are numerous market entry options available for the business enterprise to enter into the domestic or international market with the motive of expansion. Prior to the adaptation of most appropriate strategy, it has been recommended to the organization to research the future aspects of the market entry strategies in relevance with obtaining the desired goals and the objectives. Along with this, the determination of the factors related with the market entry options is necessary with the objective of successful expansion in the target market. Following are certain recommended market entry strategies for the Bunnings Group Limited in order to make the expansion effective and result oriented:

Joint Venture: It is a particular form of partnership which involves two companies working together on a particular project. This form of partnership is done for certain period of time in order to accomplish the desired tasks. Two companies specialised in their sectors agree to work on the same project for attaining their targets. Market conditions and the environment plays crucial role in the operations of these types of firms as these are formed for a limited period of time in order to accomplish the desired task. Generally, profit sharing ratio amongst the companies is equal otherwise it depends on their mutual understanding. Bunnings Group Limited could come into a joint venture type of firm with a well-known brand in the Singaporean market.

Market Entry Recommendations

This will help the organization to understand the business environment’s conditions as well as it will help them to ascertain the opportunities for setting up their brand image effectively. The best example of joint venture type of firms is Sony and Ericsson, both of them decided to manufacture the cell phones and for a long period of time, this joint venture enjoys the leading position in the market. Thus, it has been recommended to the Bunnings Group Limited to operate their functionalities in the Singaporean market in the form of joint venture type of business entity (Morschett, Schramm-Klein & Swoboda, 2010).

Franchise: Franchising is a typical North American process which is used for expansion of the business in the international as well as in the domestic markets. Now this process is being used by other parts of the globe also in order to attain their desired goals and the objectives. This form of business enterprise is majorly used by the fast food companies under which same type of food items and beverages are delivered to its consumers. Bunnings Group Limited could adopt this strategy in relevance with setting up their strong image in the Singaporean market.

This form of business will be adopted only by reviewing the demand of the products and services delivered by the organization in the target market. Without appropriate information, organization would not be able to acquire the appropriate market share in the target market. In a franchise model, organization needs to provide the details of their business to an outsider of the target market with the reputed brand name. With the help of the effective brand image, business could easily be set up along with the attainment of the goals, objectives and objective to establish a unique image in the market becomes an easy task (Moore, Doherty & Doyle, 2010). 

Licensing: This is a general mode of entry into the new market; it involves huge paper work under which company gets the right to sell its products and services in the target market consenting over several conditions, rules and regulations. With the help of this strategy, organization would be able to accomplish its tasks in an effective manner. Apart from this, organization will get the official license to perform its functionalities in the target market with the motive of acquiring a separate and important position in the target market.

Bunnings Group of Limited is performing its operations in several countries, thus, it is required to adopt the most appropriate market entry strategy for maintaining the brand image of the organization. Along with this, it is necessary for the organization to acquire the appropriate share in the market with the objective of increasing its effectiveness in the international market (Glowik, 2016). 

Direct Exporting: This strategy is used for trading in the international markets without showing its presence in those markets. This procedure involves the selling over the demand and this procedure involves seller, buyer and agent from both the countries which will help the seller and buyer to accomplish the task in an effective and appropriate manner. Agents and distributors becomes the face for the company because they are the people who have traded with its consumers on behalf of the company. Thus, they plays crucial role in these types of activities and for the company, these types of employees carry huge importance (Omar & Porter, 2010). 

Amongst these market entry strategies, Bunnings Group Limited could adopt the most appropriate strategy in relation with their goals and objectives. Bunnings Warehouse has developed a reputed position in the international market with its superior level of services. Along with this, the company is majorly known for delivering the essential products and services to its consumers in order to increase their effectiveness. Reviewing the organizational working procedure and the future market conditions, it has been recommended to the Bunning Group limited that licensing or joint venture type of market entry strategies could be adopted in relevance with setting up an effective position in the target market.

In addition to this, licensing and joint venture type of market entry strategies are effective enough to extract the positive outcomes for the organization. In joint venture, risks factors will be distributed amongst the companies involved and the same will be executed with profits. In order to increase their effectiveness in the target market along with developing an important position, organization will be able to identify the market conditions of the target market (Stevens & Dykes, 2013).

Bunnings Warehouse provides various products and services to all segments of audience. This strategy is being used by the organization for approaching to the right market in order to enhance the demand of their products and services. With the help of increase in the demand, chances for attainment of the goals and the objectives for the organization will be increased. Bunnings Limited majorly deals in homewares, accessories, and warehouse services to the retail chain companies in order to store their goods in a safe and secure manner.

Company is operating its activities from more than 300 locations along with approximately 30,000 employees. Organization has covered almost 20% market share in the Australian retail hardware sector and in order to accomplish its objectives related to the increase in the international presence of the organization, they are continuously planning to expand in the rest part of the globe (Martorell, Mulet & Otero, 2013).

Major target market for Bunnings Group Limited in Singaporean market will be retail chain companies, bathroom fittings organizations, and the companies with the functionalities in the market of light fittings, electrical appliances, outdoor living, paint products, storage places, and warehouses and the hardware and furniture stores, etc. Apart from this, organization has executed the segmentation and positioning strategies in order to analyse the current market conditions and the influence of the external environmental factors. This has helped the organization to develop its position in the target market along with the motive of fulfilling its consumer’s needs and requirements (Srdjevic, Bajcetic & Srdjevic, 2012).

Marketing strategies are used for setting up the position of the organization in the target market. Prior to implementing these strategies, organization is required to perform certain steps in order to analyse the current marketing environmental conditions and the company’s strengths, weaknesses, opportunities and threats through which the effective strategies or the model could be adopted for the purpose of enhancing its effectiveness in the target market.   

Political factors: Political risk in Singapore is quite low as well as the political rules, regulations and the frameworks are supportive for business corporations in order to increase their country’s economic conditions. According to the Political and Economic Risk Consultancy, lowest political risks are involved in Singapore. With the help of democratic nation, political stability could be analysed and this has led to the better standard of living for the citizens of the country. With these frameworks, opportunities for the multinational and domestic corporations have been increased. Political factors and their policies invites the business corporations for conducting their operations in Singapore and this will increase the opportunities for Bunnings Limited in order to successful expansion (Pestle, Crowley & Weirauch, 2014).

Economic factors: Singapore’s economic conditions are vibrant and free market economy. With the involvement of huge multinational companies in the economy, economic conditions of Singapore have been increased rapidly and it is one of most emerging countries in Asian continent. Per capita income of citizens of country is highest amongst the ASEAN. Apart from this, Singapore is also known for the corruption free economic conditions and with this effect, opportunities for business corporations are huge as well as supportive. In these conditions, Bunning Limited will easily be able to set up their strong and effective position in the Singaporean market along with their motive of increasing their global presence will also be fulfilled (Kolios & Read, 2013).

Social factors: Social factors such as customer’s preferences, market’s current trends, culture and values of the country. Organization needs to consider all these factors before setting up its outlet in the target market in order to achieve the desired objectives and the goals. Apart from this, it is crucial for the organization to develop and adopt certain strategies in relevance with the global factors (Helms & Nixon, 2010).

Technological factors: Technological factors such as improvement in the technology, introduction of new devices, machinery and the technological advancement are the major factors which influence the organization towards resistance to change. Change is necessary for improving the organizational performance as well as it is crucial from the perceptive of gaining the competitive advantage. Adaptation of these factors will help the organization to enhance their effectiveness as well as to gain the competitive advantage in the target market (Amin, Razmi & Zhang, 2011).

Legal factors: For improving the performance of the organization, legal obligations should be fulfilled with the motive of economic growth. It is required for the organization to develop certain effective rules, regulations and the policies through which the strategies could be utilised on the basis of legislative requirements. This will help the Bunnings Limited to attain its goals and the objectives along with development of an effective image (Huang & Sarigöllü, 2014).

Environmental factors: In Singapore, the Ministry of Environment and Anti-Pollution Unit is continuously working upon certain crucial environmental factors such as maintaining air quality, controlling the pollution factors, etc. With the effect to these factors, business organizations need to contribute certain part of their revenues with the objective of increasing the effectiveness of their functionalities (Kim & Hyun, 2011).

This tool could be used by the business enterprises for increasing their efficiency through promoting their products and the services in an effective manner. Along with this, the crucial part of this strategy is to promote the main features and elements of the organizational products in order to set up an effective image in the target market along with gaining competitive advantage. This tool is effective enough to uplift the performance of the organization along with determining the various opportunities for increasing their revenues and the profitability. Following are certain crucial attributes of marketing mix strategy:

Product: This attribute of the marketing mix tool describes the unique features and the elements of the products to its target audience. This element is useful for increasing the effectiveness of the product as well as it helps the organization to promote their products in the target market in an effective manner.

Price: Price of the product plays crucial role in relevance with the demand. In order to increase the demand of the product, price of the products should be set on the several bases through which the organization could be able to uplift its competitive advantage (Mintz & Mintz, 2013).

Place: Place of distribution is the outlet of the organization through which the target audience could be able to get the products and services. This will help the organization to approach its audience in an effective manner and it could also help the organization to uplift their goodwill in the market.

Promotion: This attribute describes the promotional techniques used by the organization in order to promote their products and the services in the target manner in an effective manner. Apart from this, it plays crucial role in relevance with gaining competitive advantage and the desired goals and the objectives (Armstrong, et. al., 2015).

Conclusion 

From the aforesaid discussion, it can be concluded that the Bunnings Limited is a multinational Australian company known for providing several services and products to the retail chain stores, directly to the consumers, etc. Currently, they are present in New Zealand, Ireland, and Australia and in United Kingdom. With reviewing the success of the organization in those continents, organizational management has decided to increase their global presence and for the same reason, Asian continent has been chosen with increase in the number of retail chain companies.

Along with this increase, Singapore has been chosen for setting up their store in relevance with increasing their effectiveness as well as for attainment of the growth related objectives. In this report, market entry options are discussed in relevance with the entering into the particular country’s market. Further, the report concluded the marketing strategies in order to analyse the organizational capabilities for increasing their effectiveness in the target market in accordance with external environmental conditions of the target market.

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