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Recommendations On A Suitable Market To Enter, Justifying Its Choice Based On That Country's Competitiveness, Political Stability, Infrastructure, Economic Growth And Its Overall Market Potential.

2682 words - 11 pages

1.0 INTRODUCTIONJPW Home Style is a company focused on providing tailor made furniture for approximately eighty percent (80%) of its customers. With the company's increase of sales by 40% over the last twelve months, has led to the suggestion that there is need to expand beyond the UK market.The choice of which market to enter has been driven by an assessment of the proposed country's relative long term growth and profit potential. With these criteria, Japan has been favoured, based on research into its competitiveness, political stability, infrastructure, economic growth and its overall market potential.The Japanese market has tremendous potential mainly as a result of it's:- Economic Stability- High technological and infrastructure standards- Buyer behaviour2.0 JUSTIFICATION FOR COUNTRY OF CHOICEAssessment was made, based on research using Doole & Lowe 12C framework (appendix 1), which focused on:- Country- Concentration- Culture/ Consumer BehaviourConsumptionContractual ObligationsChannelsCommunicationCurrencyChoicesCommitmentCapacity to payCaveats (threats)Economic StabilityThe Japanese have experienced a major slump in their economy but is still deemed a major economic power house globally. Its GDP real growth rate is 2.9% (2004 est.) which gives them the rating as the largest economy behind China and the USA. Major features of their economy include:The working together of manufactures, suppliers, and distributors in closely knit groups called Kieretsu.The guarantee of lifetime employment for a substantial portion of the urban labour force.According to Cateora and Graham (2005)'The stage of economic growth within a country affects the attitudes toward foreign business activity, the demand for goods, the distribution systems found within a country and the entire marketing process'. (Cateora and Graham 2005, p. 244)High Technological and Infrastructure StandardsA strong infrastructure and technological standard, forms the foundation for effective communication, good distribution system and a reliable media. This will generally support both the production and marketing of any company such as JPW.'Not only is technology the key to economic growth, but for many products it is also the competitive edge in today's global markets'.(Cateora and Graham 2005, p.379).By entering the Japanese market, JPW will have access to a technologically driven country, which is a feature of their economic growth. Their infrastructure is also excellent, which is compared favourably with other countries, as identified in table 1.Table 1 Market Indicators in Selected CountriesCountry Roads (1000 km) Vehicles (per 1000 people) Rail Lines (km) Electrical Power (kwh per capita) Mobile Phones (per 1000 people) Personal Computers (per 1000 people)United States 6,304 759 160000 12,331 451 625Brazil 1,724 79 25652 1,877 167 63China 1,403 8 58656 827 110 19Colombia 113 51 - 788 76 42Germany 231 529 36652 5,963 682 382India 3,319 7 62759 654 6 6Japan 1,162 560 20165 7,628...

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