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Global Supply Chain Management

Executive Summary of OMC Company Analysis

The case study involves the case that being the Business Management Consultant recently hired by OMC Company, there is a need of providing proper plan to solve business issues of ABC company. The research aims at development of strategy to get competitive advantages while expanding the scope of company to global company. ABC Company is famous for its services and products as a local aluminum manufacturer company and the case of that company has been considered in this research. The company is a well-known company and has been operating its business successfully. The main issue that is faced by the ABC company is competition faced by ABC company due to other aluminum manufacturing companies in the local market ABC company has decided to “GO GLOBAL” and search for new market in the foreign country. The research includes Business Consultation Report to choose less-risky International Market Entry Strategy. The research includes the overview of the exporting and non-exporting market entry strategies and their risks and profits associated with them. Partnership and exporting strategy have been declared as the most suitable method available to the ABC company to go global.

Analysis of OMC Company Analysis

The case study involves the case that being the Business Management Consultant recently hired by OMC Company, there is a need of providing proper plan to solve business issues and develop strategy to get competitive advantages while expanding the scope of company to global company. The case that has been considered in this research the client who wants consultation, is the owner of ABC Company. The company has been famous for its services and products as a local aluminum manufacturer company. Products of ABC Company includes aluminum sections that are used in the construction of façade. The products of ABC company were useful for medium to high-rise residential buildings. In addition to it, construction of commercial towers, and other development projects also included the products and services of ABC Company. The company for which client requires consultation is basically a local company that has been providing services locally for twenty-five years. The company is a well-known company and has been operating its business successfully. The main issue that is faced by the ABC company is due to addition of two large aluminum manufacturing companies in the local market and their effective marketing of the products. Due to these facts, the level of market competition that is being faced by ABC company has become intensive. The company ABC decided to sort out the issues by making a suitable Strategic Response Plan to the competitors. The strategy that the company has selected to tackle all the issues that they are facing was to “GO GLOBAL” and search for new market in the foreign country. Business Consultation Report is needed by the company to choose less-risky International Market Entry Strategy. ABC Company will rely on the recommendations of the research to make the Best Business Decision of Going Global.

Business Consultation Report:

There is a need of presentation of solution of the issues faced by the company and their suitable solution and appropriate strategy that can be applied in this case.

Problem of Client and His Unique Needs:

The main issue that is faced by the ABC company is due to introduction of two large aluminum manufacturing companies in the local market. These new rival companies are using effective marketing for the promotion of their products. Due to these facts, the level of market competition that is being faced by ABC company has become intensive. ABC company is facing issues due to this increased competition and they are facing trouble because customers are moving towards other companies. The profit and the level of sale that the company is receiving is declining with the increase in market competition and it is a major issue for the ABC company. The requirements of the company ABC are to decide the suitable option to move further in their business. The company ABC decided to sort out the issues by making a suitable Strategic Response Plan to the competitors. The company ABC requires the suitable plan for global market entry and the overview of the options that are available for them to tackle the situation (Tan,2009).

Two Types of International Market Entry Strategies (exporting and Non-Exporting):

The company ABC can adopt the method of market entry that is most suitable for them and they can enter the market by applying the exporting strategy or non-exporting strategy. The brief overview of these options is presented in the following lines:

 Exporting Market Entry Strategy:

According to this market entry strategy, the company can send goods that they produce in one country and can sell them in some other country. It is an important strategy to enter into new market and it is adopted by many businesses because it has many advantages as compared to the other options that are available to the companies. It is a low-risk strategy and it is preferred by many businesses. The companies that have a good name and business in local market can adopt this method to expand their business and find place in new market. The company that is doing a suitable business in the local market can get better options in the international market (Weismann,2014).

Non-Exporting Market Entry Strategy:

The non-exporting strategy that a company can adopt to introduce itself into new market is not to sell its products directly by exporting rather adopt different techniques to introduce itself in other market. The company can adopt the option like joint venture, franchising and other non-exporting techniques to promote their business in the foreign and global market (Lin,2000)

Five Non-Exporting Strategies:

Licensing

It is a widely used method that is adopted by the companies to enter into another market. Licensing is sophisticated arrangement in which a company gives the right of using products and services of company to other companies. The defined market strategy is suitable in case when the company that is acting as a purchaser of the license has a relatively large market share in the market. If the company wants to enter new market and the other company that is already providing services in that region have higher repute, then company can buy the license to enter the market.

Franchising

Franchising is a process of market entry in which the company do not want to export the product directly into another region or market. It is a suitable option of market entry for those companies that have a repeatable business model. Franchising is appropriate for those companies that have the model of business that can be easily transferred to other markets. The important factors that must be considered before selecting Franchising as a market entry option is the fact that business model is very unique. It is also suitable for the companies that have strong brand recognition to be used internationally. The risk of the process is that there could be future competition in the franchise.

Partnering

Partnering is an important market entry strategy that is commonly used by companies when they are starting business in Asia particularly. It is a very useful technique and it has wide range. It involves the partnership and include simple co-marketing arrangement. In complicated cases it could be modified to strategic alliance for manufacturing. It is a suitable strategy in cases when the business and social culture of the area in which marketing in being planned is very different than local culture. It is a good approach because local partners can provide market knowledge and contacts to the newly started business (Chung, 2001).

Joint Ventures

It is a type of partnership strategy in which the company creates a new company by combining the two other companies. In this process both the new companies decide to work together and share their resources in particular market. The both companies that joined together to form the new independent third company in the process of joint venture generally share all the risks and profits equally. It is also a suitable type of market entry strategy globally used (Omar,2009).

Buying a Company

There are many markets in which the suitable option to enter the market is to buy the present local company that is already providing services in that region. The main important advantages that can be achieved by this strategy is the fact that the present local company already have substantial market share. This process has the lower risk but it is a costliest solution. It provides the company that is new in the market with complete local market knowledge, an established customer base. In addition to it, the local government treats that company as a local firm.

Ranking of The Five Non-Exporting Strategies on The Basis of Risk Associated

Non-Exporting Strategy

Risk

Licensing

Less Risk

Franchising

High Risk

Partnering

Moderate Risk

Joint Venture

Moderate Risk

Buying the company

Lowest Risk

Expected Profitability of Each Type of The Five Non-Exporting Strategies

Non-Exporting Strategy

Profitability

Licensing

LOW LUCRITIVE

Franchising

High Risk

Partnering

HIGHER LUCRITIVE

Joint Venture

LOWER LUCRITIVE

Buying the company

LUCRITIVE

Business Solution and Recommendation of The Best Global Market Entry Strategy

Is Exporting Strategy by Finding a Global Distributors a Suitable Option?

According to the condition that is available in the case study, the export strategy is very suitable in this case. The company is a big firm that has a lot of experience of operation. It has been providing useful products in the local market and therefore it can attract the foreign customers and can draw their attention as well. It is a suitable option because if the company exports the aluminum products to other countries and provide quality products to the customers worldwide, they could get new customers worldwide. This strategy is very suitable in the present case and it could be used to convince customers worldwide to buy the products produced by ABC company. Exporting strategy could be useful because the company is having a good setup of manufacturing products in the local market and they could use effective marketing strategy to draw the attention of the customers Worldwide to buy their products. The company can hire distributors to sell their products globally and it is a suitable option in this case. Therefore, exporting strategy and suitable marketing strategy could help the ABC company to find customers in new markets and it is a suitable market entry strategy in the present case. It can attract the people globally and the best quality production could make it an effective step and strategy to boost the profit of ABC company. The company needs to apply the concept of global supply chain management along with exporting strategy in order to assure their services and products are being supplied globally in best possible way.

Best Suitable Non-Exporting Strategy Suitable in This Case

According to the above mentioned analysis, if the company want to grow its business globally then they could adopt the Partnering Strategy to enter into the global market. The company needs to adopt the principles of global supply chain management and can install new plants in some of the regions of the World and can distribute their products globally by exporting them. The strategy of partnership is suitable for the company because it would help the company to get detailed information about new markets and the company can use its twenty-five years of experience in local market to earn trust of customers Worldwide. 

Conclusion on OMC Company Analysis

The case involved the situation in which Business Management Consultant recently hired by OMC Company, there is a need of providing proper plan to solve business issues of ABC company. The research aimed at development of strategy to get competitive advantages while expanding the scope of company to global company. Partnership and exporting strategy have been declared as the most suitable method available to the ABC company to go global.

References for OMC Company Analysis

Omar, M., Williams, R. L., & Lingelbach, D. (2009). Global brand market‐entry strategy to manage corporate reputation. Journal of Product & Brand Management.

Dev, C. S., Brown, J. R., & Zhou, K. Z. (2007). Global brand expansion: How to select a market entry strategy. Cornell Hotel and Restaurant Administration Quarterly48(1), 13-27.

Chung, H. F., & Enderwick, P. (2001). An investigation of market entry strategy selection: Exporting vs foreign direct investment modes—a home-host country scenario. Asia Pacific Journal of Management18(4), 443-460.

Weismann, M. F., Buscaglia, C. A., & Peterson, J. (2014). The Foreign Corrupt Practices Act: Why it fails to deter bribery as a global market entry strategy. Journal of Business Ethics123(4), 591-619.

Lin, H. (2000). Choice of market entry mode in Emerging markets: influences on entry strategy in China. Journal of Global Marketing14(1-2), 83-109.

Tan, D. (2009). Foreign market entry strategies and post-entry growth: Acquisitions vs greenfield investments. Journal of International Business Studies40(6), 1046-1063.

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