The paper "Concentration in Different Market" is a perfect example of a Marketing Case Study. The globalization that has occurred in the recent past has prompted many companies to increase their market concentration in some countries so that they can achieve an increase in revenue and enhance their competitiveness. Ideally, organizations have noted numerous emerging markets that increase their probability to make lucrative sales, and this is a motivation for the management. Haier is one such company that has continued with its efforts to gain competitive advantage by expanding its reach beyond China by opening stores in more countries across the globe.
Expanding its reach to the global market has helped increase its brand awareness and increased its competitiveness as it currently ranks the third largest manufacturer of home appliances. Haier has adopted different strategies in its expansion efforts, which is quite different from those adopted by most Chinese companies as highlighted in the paper. The globalization that has occurred in the recent past has prompted many companies to increase their market concentration in some countries so that they can achieve an increase in revenue and enhance their competitiveness.
Ideally, organizations have noted numerous emerging markets that increase their probability to make lucrative sales, and this is a motivation for the management. For instance, the Наiеr Group needs to increase its dominance in the market through the provision of its products and services in other regions. Innately, this has various advantages including the increase in profitability (Henry, 2011). Further, the firm will achieve brand recognition as many parts of the world will appreciate the merchandise that is retailed y the firm. Additionally, it augments the interests of the stakeholders as they may receive higher dividends after the introduction into additional marketplaces.
This report will outline the various strategies that the Наiеr Group can instill to ensure the process is effective and successful. Company BackgroundHaier Group is a Chinese company that specializes in the manufacture of home appliances. The company was incorporated in 1984 as Qingdao Refrigerator Co. , Ltd after which its name was changed in 1992 to Haier Group (Yi and Ye, 2003). Although the company was started small by a great Chinese entrepreneur Zhang Rul Min, Haier has grown to become a global brand, which operations in many countries across the globe.
Haier currently ranks the third largest manufacturer of home appliances in the world, employing more than 50,000 employees across the globe. Its global revenue is estimated at $25.8 billion (Yi and Ye, 2003). Additionally, Haier is ranked among the top ten most innovative companies worldwide having invented heavily of R& D. Currently, the company is continuing with its efforts to become the leading manufacturer of home appliances and is continuing to expand its reach to more emerging markets.
Concentration in Different MarketMany global companies retails their products in vast markets so that they can spread the risks. For example, Toyota has instituted various plants as well as distribution centers in various places in markets so that they can enhance the provision of products and services to the people in the vicinity. Ideally, this is a protective strategy for the firm as it ensures the firm does not lose colossal amounts of products when a disaster happens (Keillor, 2013).
Case in point, the hurricane destroyed a Toyota plant, and this led to massive losses. In such a scenario, the company would have lost its market concentration had it relied on the single storage. Thus, the Наiеr Group ought to increase its production plants in various areas so that it does not incur losses in case of a disaster. Additionally, the distribution channels ought to be effective so that the customers have the products within a specified time (Cavusgil, Knight, and Business Expert Press, 2009). However, the administration may not be in a position to avail the merchandise to the customers at the opportune time, and this could lead to a dismal amount of sales.
Contrastingly, the firm can institute the Just-In-Time production, which ensures the customers have the products immediately they create demand. Innately this is appropriate especially when the firm sells perishable products (Tielmann, 2010). Additionally, this reduces inventory costs as well as the expenses of security. Therefore, it is important for the firm to consider this approach as it will define success in the new markets. Introduction of New ProductsDifferent market segments have distinctive needs and they ought to be contented by the characteristics of the products and services.
Although the preferences and tastes of market divisions are diverse, some groups of customers need specific products to enhance c comfort in their specified regions. For example, Toyota makes different assortments of vehicles depending on the terrain of the regions and the class of customers. Illustratively, hybrid vehicles are exported to the United States since most of the individuals can use the specified source of power for locomotion (Tallman, 2007). However, the company builds robust vehicles so that they can be driven in the African terrains, and this ensures durability and reliability.
In such a perspective, the customers in vast areas are contented with the services that are offered although the products are dissimilar. For this reason, the Наiеr Group needs to introduce additional products that are befitting to the new international market. However, there is a need for consistent and periodic researches to define the needs of the consumers. Through such an approach, the firm will make colossal profits, and it may control the market in subsequent years.
Market Segmentation and GeographyThe age, demographics, and population of people in an area impact the performance of a business in an area as the people have specific products that can be used in their daily activities. For instance, regions that have a high birth rate may create a high demand for toys since the parents need to entertain their youngsters. On the other hand, areas that are dominated by old people may create a large need for recreational facilities since the people require such services (Hitt, Ireland and Hoskisson, 2007).
For this reason, it is imperative for the management to consider the various products and services that can be sold to the market division so that there is a success over time. Additionally, the marketing and promotional strategies may not be the same although the products may be similar. For illustration, the message that is sent to 60-year old customers may not resemble the information that is relayed to a 20-year old customer. Thus, the firm has to consider distinctiveness in the approaches especially when they involve various market departments.
Through such an approach, the organization will attract a larger mark niche for its products, and this will increase its profitability. Nonetheless, the provision of remote locations to manage the activities of the company in the areas is appropriate as it improves the relationship between the corporation and the clientele. Eventually, the customers will be in communication with the producers, and this increases the chances of consumption. Chains and NetworksMost of the progressive companies in vast markets have multifaceted supply and distribution chains such that they can serve many customers within a limited period (Tang, 2010).
For example, Boeing has increased the number of production firms all over the world so that the production of airplanes takes a short time. Innately, the specialization ensures the parts are made in a short time and the assembly is done to meet the demands. In this approach, it is evident that the firm can serve many customers in accordance with their needs, and it increases its profitability (Doole and Lowe, 2008). Nonetheless, the company needs to have retail and wholesale outlets in various parts of the country so that it takes a short time to act upon the needs of the customers.
More so, the scores of employees in different places ensures the grievances and complaints of the customers are corrected within a short time. Through this approach, the customers are satisfied with the services that are offered, and they will be loyal to the products and services (Guillén and García-Canal, 2013). Thus, there will be continuity in the provision of the products and services as the demand will be stable.
Mergers and Take-OverFor a business to succeed in a new market, it needs to leverage in that it needs a starting point that is already established. For example, the countries that are operational in the market have conducted numerous researches and have experience with customer retention and satisfaction (Kirk, 2010). Additionally, the companies have licenses and distribution channels that ensure the products and services are available in the market promptly. For this reason, a merger with such firms will enhance the concentration of the Наiеr Group in the country as it will compete effectively with the rivals.
Conclusively, companies in the globalization age incept their products in the international market so that they can increase their profitability and revenue collection. Through the expansion, the firms are in a better position to compete with other establishments as they improve the quantity and quality of production. However, a number of suspects have to be observed. For instance, the institution needs market differentiation, the introduction of new products, reliable chains and distributors and market segmentation. Additionally, it may need to merge and take-over other companies so that it has leverage in the existing market.
Eventually, it will make an impressive performance in the entire market.