Global Expansion Strategies for Alba Beds Ltd

Introduction

Marketing is the planning and the executive strategies of pricing, promotion and distribution of the goods and services across the international countries to create exchanges which further satisfies the individual and the organisational objective (Hofer and Baba, 2018). The aim of the study is to analyse the global marketing activities for the organisation Alba beds ltd and develop appropriate strategic planning to expand the business internationally. The company is a UK based small and medium size firm manufacturer and wholesaler of beds, frames, mattresses, sofas and headboards which are in good quality and the company is also efficient to deliver efficient services to the customers so that the customer’s expectation can be maximised. The company aims to expand in BRIC countries mainly in China, where there is strong customer base which further helps the company Alba beds ltd to expand their business internally and run their operational activities efficiently (Alba beds ltd, 2020).

Developing global marketing

Global marketing is the process for creating, communicating and delivering value to the customers and it is helpful to manage the customers across the globe, by promotional tactics of the firm. Every business in the recent era of globalisation aim to expand their operational activities across the international countries and in this regard the strategic planning such as product diversification, pricing policy, promotional activities and distribution network are playing crucial role in managing the global marketing tactics, where the companies are able to promote the brands in the world market and retain long run customers worldwide (Steenkamp, 2017). In order to enter into new international market, the global marketing activities are effective for the brand for successful establishment of the company where the organisations can promote the products and services at the international economy and attract more audiences in the market. In this context, the political and economic environment is necessary to be considered to analyse the business external environment. Global marketing strategic planning is mandatory, where the multinational corporate firms try to boost their performance in the international market through choosing successful positioning strategy (Keegan, 2017).

The strategic planning of using uniform brand name, identical packaging system, direct export, synchronised pricing, coordinative product launches as well as franchisee, which are effective to expand the brand across the international markets. In addition to this, there is product strategy where the companies aim at product diversification strategy to promote variety of products and target different segment of customers in the market (Zaveri and Amin, 2019). The global marketing strategic planning also includes the pricing policies and the promotional activities, where the company can promote the organisational products and services through social media advertisement, creating social campaign and media advertisement which may attract the audiences in the emerging market like China (Vassileva and Nikolov, 2016). In addition to this, the distribution strategic planning is also necessary to be structured well to provide the quality products to all the customers and in this regard the global marketing strategic planning includes managing human resource of the firm and strengthen their supply chain by hiring experienced staff who can manage the distribution network and deliver quality products safely at the right place and within right time (De Mooij, 2018). Hereby, the organisational strategies of promotion, pricing and products diversification as well as supply chain management for distribution of the products, franchise and direct export are effective tactics to enter into the new international market, promote the brand and establish the business by strengthening their customer’s base in long run.

Merging with BRIC markets

The company Alba beds ltd aims to expand their business in China, which is a BRIC country and it is considered to be an emerging market, where the start up businesses can be established well through effective global marketing strategic planning. The business environment in China needs to be analysed to identify the external circumstances for the organisation Alba beds ltd to run their operations further. The political stability in China and economic growth in the country are contributing factors to attract more foreign investment and in this regard, it would be beneficial for the organisation to expand their business in China, which is one of the greatest emerging economies for successful establishment of the business. In addition to this, the socio cultural activities are also favourable in China, where the demand for the quality good is increasing day by day and people are concerned about the quality and durability of the products (Vassileva and Nikolov, 2016). The company Alba beds ltd has the capability to promote the company in the international market for maximising the organisational objective. In addition to this, the global marketing planning is helpful where the company can improve the product quality and durability of the organisational products at Alba beds ltd which are mattresses, bed, sofa and other necessities as well as the company can set appropriate price for the products to attract the Chinese customers. China’s immense diversity, variety, complexities and it has intense competitive intensity which further influences the firms to establish their business in the country (De Mooij, 2019).

There are certain risks in expanding the business in China, due to changing preferences of the customers towards the product, and the major risk in starting business in China is complex legal and political environment where there are unclear legislations, obligations and prohibitions for the companies which may affect the business negatively. There are certain benefits of doing business in China, which are kicking up the business opportunities to next level, gaining access of better products and services, managing products quality to meet the organisational standard, getting variety of lower cost products in the market as well as the Chinese market is emerging economy and it has strong customer base, where the company can attract the audiences and perform better in the market (Rao-Nicholson and Khan, 2017). On the other hand, the disadvantages of expanding the business of Alba beds ltd in China are such as lack of intellectual property rights, problems with manufacturing, government behaviour is unpredictable, strict and complex legal compliances which may raise risks of doing the business of Alba beds ltd smoothly in Chinese market. In this context, the economic environment in China is favourable, where the Chinese economy is growing rapidly and the GDP growth rate is approximately 9% as well as low inflation rate and sound fiscal position further affect the business activities positively, fostering the economic stability of the Chinese economy. There are certain trade barriers in China, which are RQs to grant the right to pay lower tariff, licence requirements, quotas, complex inspections and requirement of formal certification for the international trade, which are major complications in doing the business in China for the company Alba beds ltd.

Factors influencing the choice of entry mode

There are several factors that influence the organisations to choose different market entry mode for running their busying sustainably and gaining high competitive advantage in the market. In this regard, there are external and internal factors which motivate the entrepreneur of the company to develop effective strategic planning for successful market entry. The major external factors are such as market size and market growth, as well as government regulations, political stability, economic growth and social development in the country and level of competition which influence the company to make the decision for market entry. On the other hand there are internal factors that also influence the entrepreneurs of the companies to expand their business and maximise the organisational objectives in long run (Zaveri and Amin, 2019). The major internal factors are such as objective of the company, available company resources and product strategy, level of commitment, international experience and flexibility. In this regard the internal factors of Alba beds ltd will be evaluated which influence the entrepreneur and management team of the company to choose the one of BRIC countries for successful establishment of the brand. The company Alba beds ltd is the manufacture and wholesale of the beds, mattresses, sofa and other products which are effective to meet the customer’s needs and preferences. The quality products and efficient service of the company are effective to serve the customers in a better way (Alba beds ltd, 2020).

The major internal factor is organisational objective. The objective of the firm is to expand their business internationally and gain high competitive advantage in the industry so that it would be possible for the brand to secure future sustainable development. The company also aims at serving the large numbers of customers to maximise their profitability and enhance sales volume year by year by international expansion of the companies. Hereby, the aims and objective of the firm are effective to influence the entrepreneur to choose effective target market for successful establishment of the company (Steenkamp, 2017). Apart from that, though the company is SME, it has the capability of reallocating the organisational resources and manages the production unit to be the famous manufacturer of the bedding products. On the other hand, there is strong employee base, where the staff members are efficient to manage the production unit for pricing quality and durable products so that the customer’s needs and expectations can be minimised and thus the strong employee base is also another influencing factor to support the organisational manufacturing activities so that the company can expand their business and run the operational activities efficiently.

Evaluating the Entry Method- Franchise

Franchising is the process of rapid market expansion and it is beneficial for the firm which has repeatable business model. Through franchise, the companies in the recent years can expand their operational activities across the international markets and grab the market opportunities to run their business internationally (Rao-Nicholson and Khan, 2017). It is effective for low cost and low risk expansion technique where the companies can run their operations in the international place. Franchising is mainly an arrangement where the franchise or grants or licenses some rights and authorities to franchisee and it is well known strategy for business expansion (Vassileva and Nikolov, 2016). The company Alba beds ltd needs to choose proper strategy to enter into the Chinese market, which is one of the emerging markets to operate and attract the audiences for maximising the organisational objectives. Alba beds ltd can choose the strategy of franchising where the firm can make arrangement with the franchisor in China for successful business expansion. The franchisor authorises the franchisee to sell their products, gods and services and give rights to use their trademark, and brand name the franchisee pay one time fees to the franchisor for maximising their revenue and sales volume (Hofer and Baba, 2018).

In this regard, franchise is great way to expand a business without incurring additional costs of production and distribution for expanding their business in the international market. Additionally, it is helpful to maximise sales volume and grab the market opportunities as well as the brand name can be established in the Chinese market and increasing goodwill and reaching more customer can also be possible through the strategy franchising (Hanf and Winter, 2017). On the other hand, there are some disadvantages of using franchising strategy for market entry of the brand Alba beds ltd in Chinese market which are there is no direct process of selling their products and managing royalty become difficult in such an era of intense competitive market. The company Alba beds ltd can choose franchising strategy to enter into Chinese market by collaborating with retail firms in China such as Shanghai Bailian Group Co., Ltd, Gotme Home Appliance Group, and Suning Commerce Group Co., Ltd., to promote their brand and fulfil the business objective.

Conclusion

Alba beds ltd is efficient to reallocate the resources and improve capabilities to expand their business international, so that it is possible to run the business and secure future sustainable development. The marketing entry strategy franchising is appropriate for the company to enter into Chinese market to have strong customers base and retain them for long run so that the sales volume and profitability of Alba beds ltd can be maximised well in long run.

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Reference List

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