The paper 'In-Depth Market Analysis and Selection of Target Market' is a wonderful example of a Business Case Study. The data collected in relation to the new market for IKEA is very useful for decision making. The management has the responsibility of further dissecting this information so as to come up with the most feasible market for this particular product (Hubert, 2000). In the process of arriving at this, every detail regarding the market is very useful. All aspects of these markets on which information has been collected must be considered.
The statistics collected can only be of great use if properly analyzed and disseminated. The effectiveness of this particular analysis must be translated into the profitability of the products in the optimal market. The optimal market is that which will not only enable the products to sell at lower operating costs but also less bureaucratic in terms of legal requirements (Freenstra, 2003). To arrive at this specific market, we will use the collected data for analysis. To analyze such results, we shall assign value to every market indicator. We shall assign 1 to the best results, then 3 to worst performance.
One assumption that has been made in order to derive a conclusion from this market is that the country with the lowest aggregate is considered the most feasible. India South Africa Brazil DEMOGRAPHICS Income distribution 2 2 1 Age distribution 2 2 2 Household income 2 2 1 Population size 1 3 2 Population growth 2 3 1 Unemployment % 2 1 3 Human development index 3 2 1 Life cycle stage 2 2 1 Gender 2 2 2 Social class 2 2 2 Life style 2 1 1 ECONOMIC CRITERIA Consumer expenditure 2 2 1 Consumer account balance 2 3 1 GDP and GDP per capita 1 2 3 Inflation % 1 3 2 Currency unit and current value on world markets - - - Exchange rate determination (free or convertible) 3 2 1 INFRASTRUCTURE Internet/Communication skills 2 3 1 Transport 2 2 2 Water and electricity 3 2 1 Investments 2 2 1 LOCAL CONSUMPTION FOR TARGET MARKET Substitutes 2 2 2 Consumption of product (quality) 2 2 1 Current imports of your product category 2 2 2 Per capita consumption of product category 2 1 3 POLITICAL AND LEGAL ENVIRONMENT Corruption perception 1 1 2 Ease of doing business 1 1 1 Economic freedom 1 1 1 Free trade zones - - - Political stability 1 2 1 Tariffs and duties 1 1 1 Aggregate 53 54 41 From the above analysis, the country with the lowest aggregate is Brazil with a total of 41.
This is based on the assumption that the country with the least value shall be deemed effective. The performance of India and South Africa is relatively the same. All of these countries have done extremely well in regard to the political and legal environment. The three countries are experiencing political stability. India and South Africa have performed very poorly in demographics.
The population-related factors in these two countries are not working out well for them. All these results are pointing to one thing: Brazil is favored by most of these economic factors. The results per sector of the economy show that Brazil is the most favorable. Entry Strategy Penetrating a new market has never been an easy task. It requires laying the right strategies that are commensurate with the market features. Every market has its own unique characteristics that make it either hard or easy for a new entrant.
Nevertheless, the right mechanisms must be put in place to ensure that the market entrance is successful. 4.1 Distribution Strategy Distribution is a medium that facilitates the movement of goods to a place where the consumer can access with little or no efforts. Distribution channels refer to the medium used to move goods from the producer to the consumer. Measures will be put in place to ensure that all the needs of the consumer are fully satisfied. One of the distribution strategies to be adopted is the Vertical Marketing Strategy (Kennedy, 2011).
The main target of this distribution channel is to reduce conflict while at the same time enhancing efficiency in the distribution of products. Vertical Marketing System can take any of the three types: Administered VMS This is the type of Vertical Marketing System that is characterized by the dominance of one channel. The dominant channel is mostly referred to as the channel captain (Kennedy, 2011). The channel captain in our scenario can be a wholesaler, a retailer, or the producer himself. In most cases, the channel captain is the producer. He has been in the recent past been in charge of mobilizing other members.
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