Market Attractiveness Report - Retina Mini iPad - Case Study Example

Market Attractiveness Report Name: Institution: Market Attractiveness Report Executive Summary An international market arena is an environment where organizations stand to gain or risk losing. Closeness to raw materials, saturation of the local market, diversification, and search for new markets are some of the reasons why organizations enter the international market. Entities need to look at all dimensions of a business environment carefully such as legal, economic, geographical, and cultural aspects before committing resources in seemingly attractive markets. Through a feasibility study, companies are able to identify the markets where they can take advantage of the influential business aspects. To expound on this, this paper will describe on how to evaluate an international market when a company is searching for new product market before introducing a product in such an environment. The company will be in the business of selling ICT products mainly the Retina Mini iPad. The use of iPads that enable employees to work from home and remain in contact with all the relevant parties will enable firms to increase efficiency in their operations. They will also be attractive because they are potable, make reading materials from a computer much easier, and have a longer battery life. iPads will be of benefit to organizations because an employee will have more available time to perform other activities. Through the use of iPads they will work from any other locations during their free time. Through the introduction of the iPad in a new market, the customers will have a glimpse of the benefits they stand to gain through the use of ICT product in their businesses. This will open up the doors for other products and software provided by the same company. In selecting the country of entry, the degree of internet penetration will be an important consideration together with expected growth in the country’s use of iPads. Demographic, economic, geographical, economic, legal, and political elements will also be considered. The country of entry is Poland which is located in Central Eastern Europe. The company will be successful in Poland because the country has a high Internet penetration rate, and the use of iPads is expected to increase in future. Information, communication, and technology sector is growing at a very high rate in all parts of the world. iPad with retina display is a product that performs the basic tasks performed by a computer and has been used in other regions of the globe. Retina Display iPad is more attractive that an ordinary iPad and computer because the retina display makes easier for customers to access and modify information on the screen for longer periods. iPad also has a battery life of up to 10 hours. The Retina display iPad is a product that last longer and is friendly to the eyes of the user. Though some regions already have a high penetration of iPads, other regions in Europe (Turkey and Poland) and Asia (India) have low penetration rate of these products. iPads will help increase efficiency and speed of processing information. Companies in the country of entry will be well placed to reach their maximum growth potential. To illustrate how a feasibility study should be carried out, Apple, a company based in United States will be used to evaluate the market attractiveness in the international environment. The main strength of the company is the ability to customize products on the basis of the specific needs of a client. Secondly, the company is continuously developing new innovations that simplify complex organizational tasks. Market Segmentation While segmenting the international market, apple will use the price and usage basis of market segmentation. The first segment the company will focus on is the individual users who are looking to access work related information from the comfort of their homes while at the same time fulfill their information needs. This segment will receive iPads that perform the basics tasks of accessing and modifying information. iPads available to this segment will not support a large number of application and will be priced at a much lower price. The other segments will focus on heavy users and will have access to iPads that support a large number of applications. iPads distributed to this segment will be priced at a much higher price compared to those that only support few applications. Target Market The main target market for iPads will be business entities that are looking to take advantage of information technology to improve business performance. These businesses will require potable devices that make it easier for employees to perform work related tasks from any location. According to Colombo, Croce, & Grilli (2013), the use of iPads in performing work related tasks will increase the speed and efficiency in service delivery. Employed individuals who have Internet access in their residential homes will also be targeted by the company. Market Attractiveness In good economic times, businesses are looking for ways to improve their performance. Today, the Incorporation of information technology in business operations provides the best opportunity to improve performance (Wong & Hung, 2012). Companies providing homogenous goods and services aiming to improve their competitive position will highly be targeted. The geographical location of a market also influences the attractiveness of certain markets. A market located in a regional trade block will be more attractive because of limited trade barriers that increase the ease by which the product can be introduced to other markets. A densely populated area is a more attractive market. There are a lot of companies producing homogenous products. To create a competitive advantage, companies will be required to perform sales and marketing activities. Customers will require real time information and responses to their concerns and the market will be attractive for iPads. According to Krajewski (2010), a calm political climate where government transition has taken place peacefully in more than one occasion makes a market more attractive. Political chaos destabilizes the economy and makes it difficult to introduce a product into the market. On the legal front, a market is more attractive when there are few or no restrictions that are mainly directed towards protection of local industries against global competition. A market located in a regional trade block is more attractive because of the easy flow of financial and other resources across boundaries. Culture is another business dimension that determines the attractiveness of a market. Information technology presents new ways of performing tasks and a less conservative society will readily accepts the iPads, making the market more attractive. The most important of these elements are geographical, political, and legal environments. It is not likely to change the geography of a region. If a market is unattractive today, chances are it will still be unattractive in the future. Political instability causes the society to shift its attention from development to survival and security. iPad which focuses on development activities will not do well in such an environment. Careful political analysis is critical in ensuring the long term success in an international market. Where legal restrictions exist to protect local industry, it may not be wise to invest in such a market. Legal restrictions will make iPad less attractive due to its high price which may result from imposition of high taxes on the iPad. Camponovo (2010), state that other elements such as economic, cultural and demographic environments are not expected to last forever. Companies can predict when circumstances are likely to change. The risks posed by these elements can be managed through hedging and diversification. Three Potential Destinations for ICT Products The three counties where there is a high growth potential in the information and technology industry are India, Poland, and Turkey. Poland, a country located in Central Eastern Europe is one of the fastest growing IT markets in Europe. The country’s IT industry is estimated to be worth about $6.4 billion and is expected to grow even further in the near future. (Kijenska-Dabrowska, 2013). The country is a member of the European Union trading block and is a beneficially of the EU funding for IT infrastructure expansion. Majority of the Poles are satisfied with the work of the current president and this rules out any political unrest in future. The European regional block allows free movement of resources and, therefore, no legal restrictions exist to protect local industries. It is easy to introduce a new product to this market. India is the second most populated country in the world. Businesses in the country have shifted to information technology as a way of increasing efficiency in operations. According to Sahoo (2012), the country is expected to be the second largest community with over 243 Internet users in 2014. The iPad has the potential of being successful because of the large population that is willing use the product both on a personal and business level. The country does not belong to a trade block and this makes it difficult to introduce iPad to surrounding markets when local market becomes saturated. Politically, the country is highly corrupt and it becomes difficult to set up systems necessary to introduce the iPad. The Internet penetration rate in Turkey stood at 42% in 2013 and it is expected to grow in the near future. The ministry of educations plans to increase the number of students with access to personal computer and Internet connection. A plan has been laid down to provide two million iPads by the end of 2015 (Elvan, 2013). iPads will be highly accepted in this market. Geographically, the country has a number of neighboring countries in Europe and Asia, and this makes it attractive because it acts as a link between the two continents. Turkey has enjoyed economic stability until recently when corruption and tender rigging scandals implicating government officials erupted. Demonstrations have been organized to protest against the allegations putting the political stability previously enjoyed in jeopardy.Among the three countries, Poland is best placed to provide a high degree of success for an information technology company. The country has of high demand for iPads and a good political environment. Secondly, the country has a number of neighboring countries with a high growth potential. Production costs in Poland are significantly low compared to other economies such as China mainly due to low transportation costs of products across the European Union. The membership to regional trading block also makes it easier for the country to exports products at minimum costs. The main challenge of doing business in Poland is that the culture is more family oriented and highly values business relationships. Before the introduction of iPad in this market, it is necessary to learn the aspects of the society in order to understand the communication strategies that will create a good first impression. Secondly, the attractiveness of the business environment in Poland will attract a huge number of competitors. There is a chance that a company may close down operations due to increased competition. Finally, in such an attractive market, managers focus on growth and expansion plans while paying little attention to risk management (Kopitin, 2013). A company manager in Poland will have a hard time balancing between the two functions. The most appropriate entry strategy is a joint venture and this is due to a number of reasons. First, due to the complex culture in Poland, a new company will need experienced individuals who have a clear understanding of the dos and do nots in a Polish business environment. Good communication strategies will be used to create a good first impression and maintain a healthy relationship with the loyal customers. Secondly, the joint venture agreement can cover a certain period of time and the company will make an informed decision at the expiry of that period. If the market is not as favorable as expected, the company can exit the market without incurring huge losses. A joint venture will also help in the minimization of risk and access to other benefits such as established distribution channels, market coverage and enhanced credibility. Finally, a joint venture will enable the company to learn on the experiences of the partner before deciding on carrying out business operations on its own. Poland is a highly attractive market mainly because of its high ICT growth potential, geographical location, and EU membership. The company will find a ready market for their ICT products and find it easy to access other markets through the EU trading block. The country also enjoys a calm political environment and the EU membership means that there are no legal restrictions that protect the local industry. It will therefore be easy to penetrate the market and through a joint venture, the credibility of the product will be enhanced together with the minimization of the risk of making losses. Additionally, the country has well qualified individuals who will provide quality services that are cheaper compared to other potential markets. However, the right attention needs to be directed towards the understanding of the country culture. Research activities to develop new product features to fight the increasing number of competitors are also necessary together with the development of risk management plans. References Camponovo, G. (2010). Concepts for Designing Environment Scanning Information Systems. International Journal of Business and Systems Research, 4(1), 1. Colombo, M. G., Croce, A., & Grilli, L. (2013). ICT Services and Small Businesses’ Productivity Gains: An Analysis of the Adoption of Broadband Internet Technology. Information Economics and Policy, 25(3), 171-189. Elvan, O. D. (2013). The Legal Environmental Risk Analysis (LERA) Sample of Mining and the Environment in Turkish Legislation. Resources Policy, 38(3), 252-257. Kijenska-Dabrowska, I. (2013). Interdisciplinarity Dimension in Research Information Systems – Evidence from Poland. Procedia Technology, 9(1), 158-166. Krajewski, M. (2010). Trade and Environment. Fundamental Issues in International Law, WTO Law, and Legal Theory. Archiv des Volkerrechts, 48(4), 502-504. Kopitin, C. (2013). Managing Risk of Liquidity: A New Dimension of Risk Management. International Journal of Risk Assessment and Management, 17(2), 89. Sahoo, D. (2012). Efficiency of the Information and Technology Sector of India and its Relevance to Indian Economic Growth. Journal of Infrastructure Development, 4(1), 41-58. Wong, H. Y., & Hung, J. Y. (2012). Environmental Scanning Literature – Past, Present and Future Research Propositions. International Journal of Business Environment, 5(1), 30. Read More