1. Australia Software Company The members of Third Team 081123066 081123077 081123095 081123099 081123271 2. Agenda Click to add title in here Click to add title in here Objectives Future 4 1 2 3 Background Analysis Recommendation Summary 3 5 6 3. Objectives Assess market attractiveness of France, India and South Korea Recommendation - Select the suitable market Future action - Choose the best entry methods [ 4. Background Company Contents Contents -Government -Major corporations Product Market in Australia Software development - A security system for PCs, Laptops, PDAs and new generation mobile phones, which provides for access control, data encryption and secure login to corporate networks. Target users: The company which used corporate networks. 5. Background Company Contents Contents - International expansion - Support foreign language versions - Interested in three markets: France, India and Korea. Oversea market Future strategy Software development - Selling to USA and the UK through distributors 6. Analysis Micro Market size And Market growth rate Macro Politic/ legal Micro Completion Macro Social/culture ThemeGallery is a Design Digital Content & Contents mall developed by Guild Design Inc. Economic Cost of serving market Analysis Micro Macro 7. Here is the legal risks India: the IPR protection law is very specific and strong [5]. France: In common with all developed societies, France has a distinctive system of protection of intellectual and industrial property rights. [6]However, French has protection own industry laws [7]. South Korea: Korea ranks fourth in the world for number of patent applications .So there is a developed IPR law[8]. 8. Here is political risks India high inflation has largely eroded its political capital. At 8.62% in September, headline inflation is still above the Reserve Banks comfort zone of 5-6 percent, [1] .India's highest risk score of 6.87 on a scale of 10 [2]. The monetary system is stable recently. France has a strike movement for the pension change, recently [3]. French control the inflation. It is unstable, Europe dollars go down. South Korea : the tension relationship with North, Besides war, another risk scenario for markets would be the implosion of the North Korean regime, leading to sudden reunification [4]. Inflation of South Korea is a diagram,[7] The exchange rate is stable recently. 9. The comparative corruption among three counties The India government rank the worst . 10. The comparative GDP growth 11. The cultural and social: language 1.France 2.South Korea 3.India French 2. Korean 3. English Definitely only Indian can save the cost of creating a new language. Besides if do some marketing research and technology supporting is difficult for different languages. The English Software 12. Compare the economics Labor cost There are labor cost, GDP growth rate, Software industry development , exchange exposure . The labor cost is the important dimension. Whether the country has potential market Government attractive schemes International expansion should consider this. GDP growth Software industry Exchange exposure 13. Software industry schemes India rank the first South Koreas software mainly developed for domestic markets . No beneficial project . India South Korea France India is famous software superpower, India production of computer software products have been exported to world 75 countries, the United States is the largest market for Indian software products, followed by Japan, European and southeast Asia countries, but also Indian software product main buyers. Software exports now has become one of the Indian national economic pillar industries, software export to India's information industry brings bumper profits. The software industry developed not as well as expected by government. On the contrary ,some protective action have been taken. In 1986, the Indian government promulgated computer software policies, to software development created favorable conditions, such as providing capital (including foreign exchange), organize personnel training, simplifying investment and import formalities, debate domestic goods tax, etc. In the 1990s, India's economy toward full liberalization, and globalization, performance: basic cancel industrial permit to the private sector can enter more industries 14. Labor cost India France South Korea Australia China 0% 20% 40% 60% 80% 100% 5% 45.7% 8.7% 23.6% 27,8% 6.3% The cost of workforce ranks the total cost 1.00 EUR = 1.36910 USD 1.00 EUR=1,543.25 KRW 15. Market size One of the most determinations is population Title in here Title in here Title in here Title in here A B C D 16. The foreign exchange situation Australia France South Korea India France South Korea India Export Import Booming Recession Exchange system Nowadays, seeing the global business, more and more prefer Asian to Europe. Australia 17. Market size The following parts belong to what is the potential of the market . The market penetration Target users Population 18. The population The following diagram illustrate: 19. Penetration market growth rate Growth Start Jump 2008 2007 2006 2005 2004 2003 2002 2001 2000 59.4% 56.6% 44.7% the peak (SK) only 30% in India 76.3% (SK) 74.8% 72.8% 70.2% 65.5% SK and France have achieved the peak pent age, but Indian has a huge penetration population. 20. The number of target market Indian South Korea French American The number of target users: new generation mobile phone users , PC, PDA, 30% 76.30 % 98.27% 99.1% 21. The market trends India South Korea France USA 2020 2020 2020 2020 The software will go outside for new market Design for domestic needs strengthen exporting Software. no date available Outsource some software Exporting some software for developing countries The market trends in the future 22. Competition situation South Korea More competition The competitive similar companies perform easy to use , Quick to install, transport it, no maintenance to try the features. to kill a target market of soft product coverage, India The most competition France Much competition 8 9 7 9 USA The situation is similar with India 23. Cost of serving market Software is special product, transfer in through internet 60% 20% 15% 5% Innovation Cost of workforce Marketing Distance and other factors A B C D 24. Risks Economic and political risk ratings Risk and Uncertainty Firms usually experience higher risk and uncertainty when they operate abroad. Competitive Risk A firms innovative advantage may be short-lived. Monetary Risk A firms expansion occurs through foreign-direct investment, foreign-exchange rates and access to investment capital and earnings. Political Risk Look for economic and social conditions that could lead to political instability. 25. Risk assessment table 0.5 0.9 0.8 5 9 8 10% Political risk Lowest 10 - highest 1 4.4 7.2 6.6 100% Total 10% 20% 50% Weighting Attractiveness Rating (1-10) 0.4 0.5 0.7 4 5 7 Monetary risk Lowest 10 - highest 1 1.0 1.8 0.6 5 9 3 Competitive risk Lowest 10 - highest 1 2.5 4.0 4.5 5 8 9 Risk & uncertainty Lowest 10 - highest 1 Korea India France Korea India France Measure 26. Opportunities CHOOSING AND WEIGHTING VARIABLES Variables must be weighed against each other to effectively evaluate the potential success of a particular venture and to compare various ventures. Opportunities Market Size Market size is determined by sales potential. Ease and Compatibility of Operations Market located nearby, share the same language and offer similar market conditions. Costs and Resource Availability The cost of labor, the cost of inputs, tax rates, and available capital, utilities, real estate and transportation. Red Tape Difficulty of getting permission to operate the business. 27. Opportunity assessment table 4.6 8.4 7.1 100% Total 10% 10% 30% 50% Weighting Attractiveness Rating (1-10) 0.5 0.2 0.8 5 2 8 Red tape Lowest 10 - highest 1 0.5 1.0 0.2 5 10 2 Costs and resource availability Best 10 worst 1 0.6 2.7 2.1 2 9 7 Ease and compatibility of operation Best 10 worst 1 3.0 4.5 4.0 6 9 8 Market size Best 10 worst 1 Korea India France Korea India France Measure 28. The Risk-opportunity matrix 29. Future: entry method of India We dont choose exporting, because - May compete with low-cost location manufacturers - Possible high transportation costs - Tariff barriers - Possible lack of control over marketing reps we dont choose set up a wholly owned subsidiaries - we can not afford huge risks and benefits - In the pioneering period, we can not avoid political risks 30. Where is the market We choose exporting software to sell in American market, First of all , software is special product, we transfer it by internet. Besides, American market is a mature market, which we have own our market share. Furthermore, avoid cost of establishing manufacturing operations. then we can make use of achieved experience of American market. We dont choose Joint venture: Because, risk giving control of technology to partner, may not realize experience curve or location economies . What is more , shared ownership can lead to conflict we dont choose set up a wholly subsidiary , because, we wont face to bear full cost and risk . In anther way , we can not supply full the cost to set up a wholly subsidiary. 31. Future Entry methods Joint venture Exporting Joint venture Exporting India partners Local environment USA Tariff Share risks Enhance capacity Enlarge economic scope Avoid political risks Advert own brand Learn local markets Mature markets Enlarge sales Hold more shares Strengthen compete Less barriers Get local subsidy Low tax Benefit from high tech 32. Recommendation: Security software product and sell in India, exporting to USA which has been oversea markets of Australia Software Company. Submarket Major market The low cost of workforce Save money on researching new market Can focus on major software innovation. 33. Thank You!