Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
Executive summary
The report discusses the international market entry strategies and approaches for Hybrid Homes
(Private) Limited to enter Maldives as a new market to expand the market share. The report
contains comprehensive analysis over macro environment of Maldives and discussion over
market segmentation methods to close the over market to identify the right target market.
It is identified two markets such as small and medium size tourism industrial business
organizations and low income level families and provide the justification on target markets in
terms of financial and non-financial perspectives. Further marketing process for new
international market entry is evaluated using 4Ps model.
1 | P a g e
Table of Contents
01. Introduction...........................................................................................................................3
02. Overview of the organization...............................................................................................3
03. Macro environmental analysis for international market.......................................................4
04. Discussion on market segmentation methods to enter new market......................................6
05. Justification for selection of new target markets..................................................................7
06. Marketing mix (4Ps) analysis...............................................................................................8
07. Conclusion............................................................................................................................9
08. References...........................................................................................................................10
List of figures
Figure 01: Hybrid homes
Figure 02: Hybrid hotels
Figure 03: Hybrid Homes (Private) Limited Logo
Figure 04: PESTEL Model
Figure 05: Maldives index of economic freedom score
Figure 06: Maldives population growth rate
Figure 07: STP Model
Figure 08: Marketing Mix Model
01.Introduction
2 | P a g e
The report discuss international market entry strategy for Hybrid Homes (Private) Limited in Sri
Lanka. During last decade Hybrid Homes (Private) Limited established in Sri Lanka market
being the market leader in Sri Lanka hybrid homes market. Hybrid Homes (Private) Limited
entered to market by installing sites for construction locations and now it has been improved to
hybrid restaurants and hotels. In overall perspective, Hybrid Homes (Private) Limited has built
strong market reputation for hybrid homes construction in Sri Lanka market. It is discussed the
macro environmental attractiveness and challenges of Maldives market to execute the
international market entry strategies and approaches for Hybrid Homes (Private) Limited. In
addition to that STP model (Segmentation, Targeting and Positioning) is used to evaluate the
optimum market segmentation methods to cluster the whole market in order to target the right
market for Hybrid Homes (Private) Limited in Maldives. In addition to that it is implemented the
marketing strategies based on 4Ps model which includes Product, Place, Price and Promotion.
Macro environmental analysis for international market entry is performed based on the
interpretations of PESTEL analysis which focuses on environmental factors in terms of political,
economic, social, technology, environment and legal. In overall perspective, the report aim to
evaluate whether entering to Maldives market is profitable to Hybrid Homes (Private) Limited in
terms of expanding the market share and gain the financial benefits as well.
Figure 01: Hybrid homes
3 | P a g e
Figure 02: Hybrid hotels
02.Overview of the organization
Hybrid Homes (Private) Limited introduced new construction concepts to Sri Lanka with
innovative construction methods with related to containers. At the initial stage of the business
process Hybrid Homes (Private) Limited provided the services to install temporary site locations
for larger construction projects in Sri Lanka. Under innovative and unique product development
approach of Hybrid Homes (Private) Limited, product portfolio moved to hybrid home concept
to provide an option to construct a small house using containers for low income level people in
Sri Lanka. In addition to that there is a huge demand from restaurant sector in Sri Lanka for
hybrid restaurants.
4 | P a g e
Figure 03: Hybrid Homes (Private) Limited Logo
03.Macro environmental analysis for international market
Macro environment analysis for Maldives market is performed based PESTEL analysis discusses
on environmental factors such as environmental factors in terms of political, economic, social,
technology, environment and legal (Batter, 1999).
5 | P a g e
Figure 04: PESTEL Model
Political environment
Political environment in Maldives is not at stable position. As a result of that fiscal policies and
monetary policies are changing frequently (Mariyam, 2013). As a result of that business
organizations are facing the problems of implementing the strategic decisions to achieve the
growth perspectives. In addition to that there are incidences have been recorded regarding
unethical political influences to business sector.
Economic environment
Business decisions and business plans are formulated based on the behaviors of economic
environmental variables. Interest rate in Maldives is high compare to other South Asian
countries. In addition to that higher inflation rate in Maldives decline the purchasing power of
the people (Mariyam, 2013). As a result of that Hybrid Homes (Private) Limited will not be able
to decide premium prices for Hybrid Home products.
6 | P a g e
Figure 05: Maldives index of economic freedom score
Social environment
Social environment mainly discusses variations and changes in people behaviors and
composition and how those changes impact to the business decisions and market demand for the
products. In Maldives, population is increasing rapidly (Mariyam, 2013). Space availability
construct houses are considered as one of the major issue for Maldives people.
Figure 06: Maldives population growth rate
Technology environment
7 | P a g e
Invest in technology is important to ensure the business process efficiency and effectiveness. In
Maldives, technology environmental factors have been developed over the period of time with
the expansion of ICT market (Mariyam, 2013).
Eco-logical environment
The main economy strength of Maldives is tourism industry and natural environment (Mariyam,
2013). It is essential to comply with environmental protection business practices and green
business models to ensure the business sustainability in Maldives.
Legal environment
In running a business organization, it is required to focus on labor laws, environmental protection
laws and taxation laws (Mariyam, 2013).
In overall perspective, Maldives is an attractive market to promote Hybrid Homes due to social
environmental issues such as lack of adequate land spaces to construct homes, higher cost of
living etc. Further it is essential to implement proper financial management strategies to
overcome the possible financial market issues and problems in Maldives financing market.
04.Discussion on market segmentation methods to enter new
market
Market segmentation involves with clustering the whole market into several clusters based on the
common specification and characteristics of the market (Cattani et al, 2017). Market
segmentation contains sub processes such as defining the future customers, identifying the
market segments, match the competitive advantages with market expectations and develop the
marketing management strategies (Huselid et al, 1997). There are main four market
segmentation approaches such as geographic market segmentation, demographic market
segmentation, psychographic market segmentation and behavioral market segmentation.
8 | P a g e
Figure 07: STP Model
Geographic market segmentation involves with cluster the whole market based on the
geographical locations. When target market has large geographical volume, geographic market
segmentation approach is suitable to enter the market through small geographic market.
Geographic market segmentation is suitable for the countries which have larger geographical
volume. In Maldives scenario, geographic market segmentation is not viable due to small
geographical volume of the country. Demographic market segmentation involves with
segmenting the whole market based on the characteristics of population. For example;
demographic market segmentation approach considers about race, religion, gender, occupations,
family size etc. In promoting hybrid homes to Maldives market, it is important to have a clear
understanding over average family size of Maldives people to plan the hybrid home structures
and basic capacity.
Psychographic market segmentation approach links with the people thinking pattern over
household consumption patterns and perception towards hybrid homes. It emphasizes that
business organization should evaluate the perception and attitudes of market participants to plan
and build the product features and specifications. However, hybrid home concept is a new
concept to Maldives people and it is not practical rely on psychographic market segmentation
due to lack of people understanding over importance and significance of hybrid homes.
Behavioral market segmentation considers the people satisfaction and expectation by consuming
9 | P a g e
the existing products in the market. Behavioral market segmentation emphasizes that there is a
better market opportunity to enter the new market, when customers are not satisfied with existing
products in the market.
In order to determine the market segmentation method to enter Maldives market, Hybrid Homes
(Private) Limited should use combination of demographic market segmentation and behavioral
market segmentation to identify the right market segment to implement and execute the market
positioning strategies.
05.Justification for selection of new target markets
In order to promote hybrid homes products to Maldives market, it is identified 2 target markets
as follows;
Small and medium size tourism industrial business organizations.
Low income level families.
Small and medium size tourism industrial business organizations
Maldives is a tourism industrial based country. That means tourism industry is the backbone of
Maldives economy. The biggest challenge for small and medium size tourism industrial business
organizations in Maldives is, there is no adequate initial capital and resources to expand their
hotels in attractive manner to reach the premium tourists (Suresh, 2012). Building construction
cost is high in Maldives due to all the construction materials are imported from international
market. Small and medium size tourism industrial business organizations in Maldives can moved
to hybrid hotel concepts to develop and promote unique hotel concept in Maldives at lower
construction cost and limited construction timeline. In addition to that hybrid hotels can be
moved to another place from existing place (Suresh, 2012). It will be a great solution for small
and medium size tourism industrial business organizations who do not have their own lands to
build the hotels and hybrid hotels can be installed in rental land and move to another land at the
end of land lease period with previous land owner.
10 | P a g e
Low income level families
When evaluate the income distribution among Maldives population, majority of families can be
categorized as low income level families. More than 80% low income level families are living in
rental premises. Building their own house has become a dream due to higher living cost. Hybrid
homes method is a good solution for low income level families to build their own house at lower
cost (Suresh, 2012). Generally basic hybrid home can be purchased at USD2000 cost which
includes one kitchen, two room, one bathroom, one living area and one dining area.
It is important to conduct a comprehensive market analysis to have an understanding over
customers’ expectations of small and medium size tourism industrial business organizations and
low income level families target markets in Maldives to develop the basic designs and
specifications of hybrid hotels and homes (Suresh, 2012).
06.Marketing mix (4Ps) analysis
Figure 08: Marketing Mix Model
Product
In developing the product development strategies for Hybrid Homes, it is essential to consider
the requirements and expectations of the target market customers (Porter, 1981). Most of the
11 | P a g e
people in target market expect to fulfil the minimum household requirements from Hybrid
Homes. It is recommended to plan the structure of Hybrid Homes which includes one kitchen,
two room, one bathroom, one living area and one dining area. With these minimum structure of
Hybrid Homes, organization should plan to introduce low cost product to market to match with
the purchasing power of the people and it is recommended to introduce Hybrid Homes
customization option to customers who are willing add more value added features to basic
Hybrid Homes structure.
Place
Place of marketing mix involves with implementing the strategies and methodologies to
distribute the products among target market customers (Lajara & Sempere, 2002). For example;
retail business organizations uses different distribution methods such as ecommerce to reach the
target market customers. In planning the distribution plan for reach customers in Maldives
market, organization should initiate joint venture arrangement with Maldives business entity to
conduct the sales and marketing strategies and position to the product values and benefits to the
customers to increase the customer base within shorter period of time.
Promotion
There are two types of promotional strategies such as pull promotion strategy and push
promotion strategy (Shenhar, 2004). Pull promotion strategy is used to attract the customers
towards the product while push promotion strategy involves with reaching to customer to
position the product values. In this case, it is recommended to use online marketing methods to
make the customer awareness of product existence and use direct marketing approach to reach
customer’s place and conduct direct discussion with the customers to plan the structure of hybrid
home based on customer requirements and budget. Market promotion strategies should be
updated with respect to the changes in perceptions and behaviors of target market customers. In
addition to that it is recommended to perform cost and benefit analysis of each promotion
methods and approaches during the promotion strategy planning stage and perform variance
analysis at the completion stage comparing expected outcome and actual outcome.
12 | P a g e
Price
Prices of hybrid homes depend on purchasing power of the people. Further it is essential to
ensure the product quality in order to ensure the business sustainability and build the market
reputation (Vera & Crossan, 2004). Organization cannot impose premium prices due to low
purchasing power of the target market customers. Based on that it is recommended reply on
penetration pricing strategy which ensures high quality and low price of product. Further
organization should review the behaviors of economic market variables to assess the relevance of
pricing strategies with respect to the changes in economic environmental variables.
07.Conclusion
In Maldives, there will be a huge market demand for hybrid hotels from small and medium
tourism industrial business organizations. In addition to that due to higher cost of living in
Maldives, hybrid homes concept will be an ideal concept to construct a basic house at lower cost.
Marketing strategies should be based on online marketing and direct marketing. Further it is
essential to change the business approaches and tactics with respect to the changes in macro
environmental forces. For that purpose organization should have proper change management
mechanism to capture change in business environment and respond.
08.References
Huselid, M., Jackson, S.E. and Schuler, R.E. (1997), ``Technical and strategic human resources
management effectiveness as determinants of firm performance'', Academy of Management
Review, Vol. 40 (1), pp. 171-88.
13 | P a g e
Lajara B M, Lillo F G and Sempere V S (2002), “Human Resources Management - A Success
and Failure Factor in Strategic Alliances”, HRM and strategic Alliances Employee Relations
Vol. 25 (1), 2003 pp. 61-80
Marko, M., Dejan, P. and Vladimir, O. (2006), “Strategic Project Management – New
Management Approach”, International Scientific days.
Mariyam R,, (2013), Developments in the Construction Sector of Maldives, Quarterly Economic
Bulletin.
Morrison, A. and Roth, K. (1992), ``A taxonomy of business-level strategies in global
industries'', Strategic Management Journal, Vol. 13, pp. 399-418.
Porter, Michael E. (1981), “The Contributions of Industrial Organization to Strategic
Management.” Academy of Management Review 6.4: 609–620.
Shenhar A.J, (2004), “Strategic Project Leadership: Toward strategic approach to Project
Management”, R&D Management, Vol. 34(5), pp 569-578.
Suresh K., (2012), Develoment of tourism industry in Maldives, International Journal of
Scientific and Research Publications, 2 (4), ISSN 2250-3153.
Vera, D and Crossan, M. (2004), “strategic Leadership and Organizational Learning”, Academy
of Management Review, Vol. 29, (2) pp 222-240
14 | P a g e