Key Factors in the International Market That Can Help or Hinder Sharp Airlines Potential Success - Case Study Example

Contemporary Issues Report Name: University: Date: Table of Contents Contemporary Issues Report 1 Table of Contents 2 Key Factors in the International Market That can Help or Hinder Sharp Airlines 3 Potential Success When Marketing via Virtual Channels 3 Abstract 3 1.0 Introduction 4 2.0 Literature review 5 3.0 Management Implications 7 4.0 Recommendations 9 5.0 Conclusion 10 References 11 Key Factors in the International Market That can Help or Hinder Sharp Airlines Potential Success When Marketing via Virtual Channels Abstract In the contemporary financial system, the Internet has a resilient impact and significance on the companies’ effort to develop effective marketing strategies and improve their means of communication. Different means of gaining customers’ purchase power as well as attention should be innovated as well as implemented constantly in the current competitive market. As it will be evidenced in the report, Sharp Airlines success relies heavily on the creativeness of the marketing communication. Besides that, risk taking is these days more crucial when developing new international marketing strategies. Increased levels of globalization have resulted in numerous measures, like higher international integration as well as lower trade barriers, which in consequence, have generated the economic and institutional conditions for a growth strategy of companies from emerging and developed economies. Foreign markets presence is a crucial growth tool for Sharp Airlines, particularly when the domestic demand is exceedingly competitive. There are numerous digital tools that Sharp Airlines can use to penetrate the international markets such as mobile technologies and social networking sites such as Facebook and Twitter. This report, explains the key factors in an international market that would help or hinder Sharp Airlines potential success when marketing through virtual channels. 1.0 Introduction When a company markets through the virtual channels, they succeed in delivering all the necessary messages both externally and internally. According to Ciaramitaro (2010), the new virtual opportunities for businesses have been created by the electronic commerce. Currently, the international economy is progressively more anchored on the intangible and information value, and this evolution resulted in virtual types of market-space (Le & Rothlauf, 2008). Virtual market-place as stated by Stanford-Smith and Kidd (2000), is the platform for combining demand and supply as well as economic and technology requirements so as to improve resources’ employment and the selling process. Essentially, international Marketing has turned out to be more and more popular as well as imperative study field on a global scale. As Australia together with the dynamic Asian nations become closer through trade partnerships, it is imperative for Sharp Airlines to understand the legal, political, cultural, and economic element that impacts the trading activities inside and outside the region before moving internationally. Such influences characteristically increase the operating risks in an international market than in the local market. Thus, Sharp Airlines desiring to pursue international market must exhibit a strong need for coordinating international marketing with other organisational functional strategies. Given that contemporary consumers rarely pay attention to the traditional advertisements, some of Sharp Airlines competitors such as Qantas have begun using virtual channels to reach to their customers. 2.0 Literature review The key difference between international marketing as well as domestic marketing is the complexity as well as multidimensionality of the majority of the foreign country markets, where a company can operate in. For Sharp Airlines, it must understand the complexities attributed to international marketing, especially when using the Internet. Currently, Sharp Airlines is facing more challenging conditions, given that fluctuations in both the local economy as well as international markets have generated obstinate issues that need to be address. Furthermore, the political environment is still challenging, with most state governments and the commonwealth unwilling to spend because of their fiscal consolidation ambitions. In view of this there are a number of barriers in international marketing that Sharp Airlines should take into account for it to succeed in using virtual channels for marketing. Legal Barriers: As indicated by Doole and Lowe (2012), legal systems in various countries vary both in interpretation as well as the content. In the international markets, Sharp Airlines will not only be bound by the home country laws, but also by the laws of the host country in addition to various international laws. For instance, companies operating in the European Union (EU) face increasingly more directives that have an effect on their marketing operations across EU member states. Advertising both mainstream media and the internet are subject to restrictions. Besides that, product acceptability a country may be affected by inconsequential regulations such as packaging or through major legislation changes. Before marketing, Sharp Airlines must make sure its products are in line with the safety legislation of the host country. Moreover, bureaucratic delays, political squabbles, and infrastructure difficulties are also key obstacles that face marketers in international markets. According to Auboin and Ruta (2013), world currency movements, stirred by foreign exchange dealing and worldwide trading create some difficulty in the international markets. If Sharp Airlines predict incorrectly on currency stability, its international business deal can be impacted negatively, leading to fewer profits. Companies that have to swap currencies so as to pay for the goods imported, or for the reason that foreign currency has been used to pay them for their exported goods can end up making no profits. The formation of the Single European Payments Area (SEPA) as well as the European Monetary Union (EMU) formation has resulted in greater stability for airlines operating in the EU market. This can positively impact the Sharp Airlines strategies; thus, making its marketing operations more effective. The international marketing political environment entails the political factor at the international or national level that have an effect on Sharp Airlines’ decision making or operations. As pointed out by Restrepo, Correia, and Población (2012), politics are the key factor in the majority of the international business decisions. Furthermore, politics is inherently associated with the government’s attitude to business as well as the freedom it offers multi-national companies to operate. Basically, political regimes that are not stable expose foreign companies to numerous risks that are non-existent in Australia. This indicates that the political environment is the most unstable area in the international markets. Besides that, the governments’ tendencies to amend the laws and regulations can impact Sharp Airlines international strategy, by offering both threats and opportunities. For instance, the invasions of Iraq and Afghanistan have brought opportunities for market development for some but devastation for some of the Australian brands such as Qantas. The political turmoil in countries such as Egypt, Tunisia, and Yemen as well as the unceasing global terrorism threat from groups such as Al-Qaida, Taliban and Islamic State of Iraq (ISIS) present enormous political risk in the international markets. Emerging markets as well as lesser developed economies such as Brazil, Indonesia and Venezuela pose high political risks and are often plagued with civil disorder and increasing governments’ opposition. Cultural differences and particularly linguistic differences have a considerable effect on the way Sharp Airlines virtually markets its products in the international markets (de Run, Yee, & Khalique, 2012). Operating successfully in different countries, need Sharp Airlines to acknowledge the significant differences existing between the home and the host country. Sharp Airlines should consider the Latin Europe versus the Northern Europe, China versus the US and other countries with different cultures. During the early stages of internationalisation, Australian will normally experience what seem to be cultural gaps with their counterparts in Asian countries as well as Latin America and in different regions. 3.0 Management Implications Even though a number of scholars have pointed out that the Internet is the international trade’s ubiquitous solution, Ya-Ping (2012) posits that the Internet ability to improve the management abilities in facilitating foreign market expansion is exceedingly moderate and definitely more multifaceted. Besides that, Mathews (2009) posits that the Internet has by far surpassed the initial basic communication propositions. Due to the influence of the Internet, scores of researchers, authors and commentators have suggested a new model in international marketing known as the Internet international marketing (IIM) (Eid & Trueman, 2002). Because of changes brought about by the Internet, Sharp Airlines management should understand changes to; the firm’s information control, consumer’s information search for consumers, trust, interactive capabilities, as well as disintermediation. The Internet as well as the access to World Wide Web, has transformed the practices of international marketing. RyanAir and EasyJet have completely helped transform the way passengers book their airline reservations. For every company, the impact of marketing goods as well as services online has been comprehensive. Imperatively, the Internet has resulted in information explosion to the international consumers, offering them the ability to source products cheaply from the preferred suppliers. This has resulted in increased prices standardisation in the international markets as well as in the lessening of price gaps. Bearing in mind that through the Internet, consumers have become more aware of prices offered by different companies in the international markets and buy various products through the virtual channels. International marketing through virtual channels this has resulted in increased revenue for airline companies such as Qantas and Virgin Australia. By directly connecting the customers and the producers, the internet has reduced the significance of the conventional intermediaries such as distributors and agents in international marketing. The Internet can enable Sharp Airlines to build an online capability that enables them to deal directly with their customers. The important resource offered to the management by the Internet is information instead of inventory that was offered by traditional intermediaries. As mentioned by Doole and Lowe (2012), the Internet has turned out to be a powerful marketing tool that supports the company’s external and internal networks. The majority of multinational companies as observed by Doole and Lowe (2012), have created supplier intranets, which they utilise to source services and products from the preferred suppliers. Imperatively, the internet shortens the supply chain as well as cut operating costs, and it improves visibility, and the content reaches a much bigger customer base (Kiang, Raghu, & Shang, 2000). It has also turned out to be an effective channel for carrying out market research at international level and getting instant customers’ feedback. Therefore, the Internet offers an environment that is essentially different for international marketing and needs a strategic approach that is completely different, which can affect every marketing process aspect. However, not all ventures into international marketing through virtual channels have been fruitful since the majority of the early dot-com companies turned out to be ‘dot.bombs’ after failing to maintain their early promise. For instance, Levi Strauss halted its Internet operations after establishing that the servicing cost of returned goods was more than the new sales revenue (WSJ, 2004). Commentators on one hand see advancement in technology and shrinking communications as the main driving force in developing an international village where the needs of the global consumers are similar. On the other hand, for people to access this international market, they must understand the English language as well as should be able to access various technologies such as mobile phones. In the international markets, Sharp Airlines will stumble against the enigma that even though in a number of nations there is a market of computer-literate and well-educated persons, in other countries is vice versa. 4.0 Recommendations In view of the above-mentioned issues and factors, it is imperative for Sharp Airlines to examine the countries wherein they will operate so as to gauge the political as well as economic risk and to make sure they comprehend the characteristics and peculiarities of the market they desire to develop. Imperatively, the airline’s marketing managers should have an appropriately planned approach for all international activities because, without it, the overheads as well as probability of failure may increase. Besides that, Sharp Airlines should understand that internal micro-environmental influences like capital and human resources, firms’ intentional readiness, its capabilities as well as other managerial attributes, are crucial for marketing efforts, especially when entering the international online setting. Sharp Airlines should also understand that customers’ online perceptions are anchored in the new business model, which generates a high interaction level; thus, offering improved consumer experience. The airline should be able to use the Internet’s ability so as to generate interaction with the customers and yield longevity and emotional excitement of actual purchase. 5.0 Conclusion In conclusion, the report has explained the key factors in an international market that could assist or hinder the potential success of Sharp Airlines when marketing through virtual channels. As mentioned in the report, entering the international markets signifies an opportunity for Sharp Airlines to attract new customers, but also presents numerous challenges such as economic and political risk, new laws and regulations and new competitors. As indicated in the report, the Internet is a key driving force in the international marketing, and the impact of advancement in technology is noticeable in every facet of the marketing process. The Internet has created ability for data collection in the international markets, and can enable Sharp Airlines to operate internationally, and to successfully and easily market their products to different customers. References Auboin, M., & Ruta, M. (2013). The relationship between exchange rates and international trade: a literature review. World Trade Review, 12(3), 577-605. Ciaramitaro, B. (2010). Virtual Worlds and E-Commerce: Technologies and Applications for Building Customer Relationships: Technologies and Applications for Building Customer Relationships. Hershey, PA: IGI Global. de Run, E. C., Yee, T. C., & Khalique, M. (2012). It’s not just a brand name: The impact of language on consumer attitude and behavior. International Journal of Research Studies in Management, 1(2), 47-56. Doole, I., & Lowe, R. (2012). CIM Coursebook Strategic Marketing Decisions. New York: Routledge. Eid, R., & Trueman, M. (2002). The Internet: new international marketing issues. Management Research News, 25(12), 54 - 67. Kiang, M. Y., Raghu, T., & Shang, K. H.-M. (2000). Marketing on the Internet — who can benefit from an online marketing approach? Decision Support Systems, 27, 383–393. Le, K. D., & Rothlauf, F. (2008). Foreign market entry of e-business companies and implications for theories of internationalization. Mainz: Johannes Gutenberg-University Mainz. Mathews, S. W. (2009). Internetalisation : the Internet's influence on international market growth in the firm's outward internationalisation process. Brisbane, QLD: Queensland University of Technology. Restrepo, D., Correia, R., & Población, J. (2012). Political Risk and Corporate Investment Decisions. Working Paper, Universidad Carlos III de Madrid, Madrid. Stanford-Smith, B., & Kidd, P. T. (2000). E-business: Key Issues, Applications and Technologies. Fairfax, VA: IOS Press. WSJ. (2004, June 17). In Bow to Retailers' New Clout, Levi Strauss Makes Alterations. Retrieved from The Wall Street Journal: www.wsj.com/articles/SB108742485606139344 Ya-Ping, H. (2012). E-Marketing Development in Virtual Market-Space: A Strategic Perspective. Asian Journal of Management, 4(4), 359-366. Read More