Business Management - Airsec Company - Case Study Example

Name Instructor Course Institution Date Table of Contents 1. Airsec LTD………………………………………………………………………………….3 2. Objectives of the Company…………………………………………………………………..3 3. Task 2………………………………………………………………………………………...3 4. Benchmarking………………………………………………………………………………...6 5. Difficulties in entering Indian Markets……………………………………………………….7 6. Task 5………………………………………………………………………………………....8 7. List of References……………………………………………………………………………10 AirSec LTD Objectives of the Company The essence of existence of every organization is the realization of its goals. Objectives form the vital landmark for organizations to achieve the set goals. Before embarking on the process of establishing objectives, it is highly advisable that there is a need for a significant degree of consideration. This enables formulation of objectives that are target oriented, can be quantified and measured in terms of their ability to generate the change that is needed in the organization, not too ambitious and can be achieved within a given time frame by using the available resources. In a similar manner, careful consideration and orderly thinking enable creation of objectives that relevant the course of the company. Time is essential. Therefore, the objective must have a specific time-bound. In the light of these guidelines, effective objective of AirSec LTD would be: The company will be selling its products in at least three non European markets by the end of the following year. A draft mission statement of the company is: To give you the peace of mind by eliminating security threats in your residential and commercial premises through high-tech aerial security technology. Task 2 Pricing is one of the marketing mix factors that play a vital role in the sale of a product. Different organizations employ different pricing strategies. However, the choice of the pricing strategy is significantly determined by the merits and drawbacks of the strategy itself. For instance, companies can price their products according to the industry standards. This strategy is known as cost based pricing model. In this case, the prices of the products are determined by the costs of production. In other words, the price of the product is generated by adding the cost of production to fixed percentage profit. The advantage of this model is that is easy to determine since it does not involve market analysis. It just uses the internal information. However, this is also its weak-point. Determining the price of a single product is difficult. This is due to the fact that units of costs of costs of production vary depending on their volumes. Excluding market analysis also reduces its efficacy. In general, it ignores the pricing stratges of potential competitors. It may lead to the establishment of high prices in a weak market and also cause the company to sell its products at low price in strong markets. In this sense, it is evident that it affects the profit margins. It is important to observe that the price of a product communicates its value as intended by the company and plays a critical role in the success of the organization. When prices are determined by the perception that optimal pricing reflects how consumers value the product, the strategy is referred to as value-based pricing. This pricing strategy can enhance higher sales volume. In some cases, customers have the mindset that they can obtain quality service from products that are highly priced. This strategy is challenged by the need of intensive market analysis and research. The mangers must determine the preferences of the target customers. It also depends on intense advertising. This is the only way that the company can communicate the value of the product to the targeted market. In most cases, companies wish to expand their markets. The aspect of globalization has made it easier for firms to venture into markets that are outside their geographical jurisdiction. In such cases, firms tend to use new product pricing strategy. This pricing strategy is also referred to as penetration pricing strategy. The major focus of firms entering new markets is to capture and retain the largest market share possible. This strategy is also very critical for firms that are venturing into production of new products. One of the strategies in this case is to lower the price of the products to change consumer behavior. For this reason, it is the best pricing strategy if an organization wants to face stiff competition. On the contrary, determining the price of new products can be very difficult. Kemper (2010) argues that this is due to difficulties associated with estimating the demand of new products. Sometimes the prices of products are affected by the market forces such as demand and supply. This generates a type of pricing strategy referred to as demand based strategy. Inn this case, the behavior of consumers is the chief determinant of the prices. Managers use the demand schedule to determine the prices of the products. The demand schedules help in determining sales levels and profitable production. However, gauging the demand accurately is difficult in most cases. It is to observe that there are various options that AirSec LTD can employ to price their products. The perfect strategy it can use to venture into new markets in India is the penetration pricing strategy. Since the firm is entering a new market, the decision on pricing the products is majorly determined by the need to gain the market share. Kemper (2010) explains that penetration strategy is the perfect pricing strategy when firms enter into new markets. The fact that this strategy enables firms to face any level of competition is equally important. In this sense, it will enable the company to fight competitors and establish itself in the market faster as opposed to them using any other pricing strategy. Benchmarking Benchmarking is very important to organizations because it enhances best practice, which eventually generates quality performance. According to Inglis (2005), the definition of benchmarking was established by the Xerox Corporation. The corporation formalized benchmarking as a vital tool for improving performance. To point out more clearly, it can be defined as a tool which enables organizations to source for better practices which enhance superior performance (Codling 1995). This can only be achieved if organizations can weigh their products or services against the most outstanding products that are found within a relevant industry sector (Inglis 2005). Benchmarking is an essential tool that can effectively be employed to measure the contribution of various categories of workforce to the overall performance of the company. Johnston (2015) argues that benchmarking provides the standards that can be used to measure the performance of employees. As a matter of emphasis, benchmarks are standards of employee performance that are expected by the company. The basis of performance evaluation in this case is the ability of the workforce to meet the set benchmark standards. For instance, benchmarking can be used to measure the quality and productivity of the professional engineers of the company. A balanced scorecard is one of the benchmark strategies that can be used to measure these aspects. Mathis, Jackson and Sean (2015) confirm that organization can use a balance scorecard to measure the strategic performance of the workforce. In a similar way, AirSec LTD can use the same strategy to measure the performance of its engineers. Balanced scorecards enable organizations to measure a wide variety of performance measures. For this reason, it measures both financial and nonfinancial measures. In this instance, it can be noted that scorecards are platforms that enable. Revenue per employ is also another benchmark strategy that can be used to measure the performance of professional engineers. This implies that benchmarking can be used to measure the effectiveness of human capital. Johnston (2015) elaborates that human capital provides both the biggest value and the biggest cost. In other words, many matrices of performance often reflect costs that are related to people. Therefore, assessing the revenue per head is a strategy that can be used to measure the performance both the professional engineers and the entire workforce. In this case, the total revenue of the company is divided by the total number of employees. This determines the revenue that is generated by each employee. Difficulties in entering Indian Markets India is a potentially lucrative market to venture into. It is one of the fastest growing economies in the world. In addition, India has a positive economic outlook that is appealing to outside investors. However, there are quite a number of significant challenges that are associated with expanding the export to Indi. One of the major challenges prices is highly competitive in India. For instance, the government awards tenders to bidders with the lowest price quotations. This is likely to affect the new entrants. For instance, AirSec LTD may find the high price competitiveness unattractive because it may generate low profit margins. India is hub of cultures. The country has seven major religions and several other minor ones. It also has six main ethnic groups. From this point of view, it can be noted that the country is characterized by cultural diversity. These aspects of diversity affect the bonding between the locals and the foreign investors. It is important to realize that how the local adapt to the foreigners, and how foreigners adapt to the local community plays a key role in determining whether the business will thrive or not. Since Indians are polychronic people, it is very difficult for them to adapt to foreigners (Millar 2006). Corruption is force encounter in India. Manian (2007) agrees that corruption is a big challenge when doing business in India. In 2005, Transparency International ranked India at position 92 out of the 159 countries that were investigated to measure perception about corruption (Ansari 2011). Rampant bureaucracy is also another hurdle when doing business in India. The problem arises from various levels of state, federal and local governments. India is still a developing country. As such, it still has poorly developed infrastructure. This creates various bottlenecks in many occasions. For instance, the seaports are sometimes overwhelmed with the large number of imports and exports that they handle. During such moments, the equipments used to load and offload goods are not sufficient (Manian 2007). Task 5 The incident described is likely to generate a number of risks that have significant impact on the organization. One them is the risk of misunderstanding of the products. Instead of being perceived as security enhancing equipment, they are likely to be seen as a threat to security and safety. In addition, the products are being introduced for the first time. This is likely to suggest that they are unfamiliar majority of the population. Owing to their large size and complex appearance, as well as the fact that they fly on their own, they can scare those that are seeing them for the first time. Eventually, the tilted perception is likely to affect the adoption of the drones as security enhancing equipment. Furthermore, it may take a lot of resources, efforts and time to correct such errors. It extreme cases, the operation of the UAVs could be banned or stopped for some time. It can be seen that this can affect the expansion of sales to other regions in the country. To correct the situation, the appropriate functional areas within AirSec, should go out and address the situation. They should also provide a detailed explanation of the situation to the police and the general public. To avoid confusion in future, AirSec LTD must run campaigns to create awareness of the product and define how they function. They should effectively communicate what may happen in case of a failure. However, in doing so, they may risk giving away the secrets of the technology to people who may create generic products. For this reason this must be initiated with a lot of deliberation and discernment List of References Ansari, T. (2011). Challenges of doing business in India. INDIA. Codling, S. (1995). Best practice benchmarking: A management guide. Aldershot, Hampshire, England: Gowe Inglis, A. (2005). Quality Improvement, Quality Assurance, and Benchmarking: Comparing two frameworks for managing quality processes in open and distance learning. The International Review of Research in Open and Distributed Learning, 6(1). Retrieved from http://www.irrodl.org/index.php/irrodl/article/view/221/304 Johnston, K. (2015). Benchmarking and Performance Evaluation.Chron. Retrieved from http://smallbusiness.chron.com/benchmarking-performance-evaluation-13102.html Kemper, A. (2010). Valuation of network effects in software markets: A complex networks approach. Heidelberg: Physica-Verlag. Manian, R. (2007). Doing business in India for dummies. Hoboken, N.J: Wiley. Mathis, L., Jackson, J. & Sean V. (2015). Human Resource Management: Essential Perspectives. Cengage Learning, Saul, J. (2007). Benchmarking for nonprofits: How to measure, manage, and improve performance. Saint Paul, Minn: Fieldstone Alliance Millar, R. (2006). Doing Business with India. London: GMB Pub. Read More