Global Markets: Strategy and Implementation-世界市場-戰略和布局

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03-14, 2014

Introduction

引言

Global marketing is a common word for the current business world. With the process of globalization, many companies have expanded their domestic market to international market, and some even transfer their focus to the international market. In these international companies, some have started very early, for example, Walmart, the largest grocery retailer in the USA; Carrefore, famous French brand supermarket etc.
全球營銷是當今商業世界最常見的一種策略。隨著全球化的進程，許多公司已經擴大了其國內市場到國際市場，有的甚至他們的重點轉移到國際市場。在這些國際企業，有的已經很早就開始了，例如，沃爾瑪，美國最大的食品零售商;家樂福，法國著名品牌超市等。

Under overall and reasonable analysis and investigation, the appropriate international market would provide a wider market with denser population and stronger purchasing power. However, the external market also filled with extra problems, the different culture, living habits and political interference and so on. During the whole process of pioneering the international market, the strategy and implementation method are of key importance. This report will carry out a strategic analysis of potential Asian markets for Waitrose, and then on the basis of the strategic analysis and market selection carried out in question 1, formulate market entry strategies for the chosen markets in Asia for Waitrose, consisting of careful recommendation.

根據整體和合理的分析和調查，相應的國際市場將提供一個更廣闊的市場較密的人口和更強的購買力。然而，外圍市場也充滿了額外的問題，不同的文化，生活習慣和政治干預等。在開拓國際市場的整個過程中，策略和實施方法是至關重要。這份報告將開展對維特羅斯潛在的亞洲市場的戰略分析，然后在戰略分析和市場選擇的問題1進行的基礎上，制定市場進入戰略的選擇的市場在亞洲維特羅斯，包括仔細的建議。

Analysis and evaluation of relevant external and internal factors.
分析和評估相關的外部和內部因素。

First, let’s have a brief introduction of Waitrose. Waitrose was founded at Acton in 1904 by Wallace Waite, Arthur Rose and David Taylor. The company was later acquired by John Lewis Partnership in the year 1937. At that time it had 10 small service food shops and had a turnover of 150000 GBP. After the acquisition, Waitrose now are specialist Supermarkets, having more than 175 supermarkets all over UK mainly in the south-eastern region. Waitrose supermarkets mainly offer fresh products, poultry, bread & meat, and their organic food is famous, too. Waitrose is an English company well-known for providing high and good quality products and its target market lies on the middle and higher class with its good and high quality products (termpapersmonthly.com, 2007).After browsing the website of Waitrose, www.Waitrose.com, we may be impressive about the considerate service offered, the online shopping, the cooking and recipes videos, the description of the origin of the food, and some advice for the picnic food or party preparation, etc. It gives us a further impression that we can get not just qualified food or products from Waitrose, but also sweet consideration. Just like the slogan of Waitrose:" Everyone deserves quality food, everyone deserves Waitrose"(Waitrose, 2008). The success of Waitrose in UK consists of many factors, and some of which might be of key significance in the entry of international market, the proper target market, excellent service and creative self-made products.#p#分頁標題#e#
首先，讓我們簡要介紹維特羅斯。維特羅斯是由華萊士韋特，??亞瑟·羅斯和大衛·泰勒創立于阿克頓于1904年。該公司后來被約翰·劉易斯合作伙伴在1937年收購了。當時它有10小服務食品商店，有一個營業額150000英鎊。收購完成后，維特羅斯現在是專科超市，擁有超過175超市遍布英國主要分布在東南地區。維特羅斯超市主要提供新鮮的產品，家禽，面包和肉類，他們的有機食品是出名。維特羅斯是一家英國公司眾所周知的，提供質量好的產品，其目標市場在于對中高階層以其良好的和高品質的產品（ termpapersmonthly.com ， 2007）。瀏覽維特羅斯， www.Waitrose.com。我們可能會令人印象深刻的了解提供了周到的服務，在網上購物，烹飪和食譜視頻，食物的來源說明，以及一些建議的野餐食物或一方準備等，這給了我們一個我們可以得到不只是合格的食品或產品從Waitrose的，但也甜蜜考慮進一步的印象。就像維特羅斯的口號： “每個人都應該得到優質的食物，每個人都值得維特羅斯” （維特羅斯， 2008）。維特羅斯在英國的成功由很多因素，和其中一些可能是在國際市場的進入，適當的目標市場，優良的服務和創造性的自制產品的關鍵意義。

And then let us have a general overview of the Asian economic environment.”Asia has once again become the most dynamic growth center in the world economy"(Kawai, M., 2005. P. 1). The economy of Asia comprises more than 4 billion people (60% of the world population), which implies great potential purchasing power. And Asia is divided into several regions according to obviously distinct characteristic, the East Asia, the west Asia, the mid Asia, etc. As in all world regions, the wealth of Asia differs widely among each other; the wealth even differs greatly within states. This is due to its vast size, causing a huge gap of different political, economic, social, technological, environmental and legal condition.

In terms of GDP by purchasing power parity, China has the largest economy in Asia and the second largest economy in the world based on its huge population and rising momentum, followed by Japan and India as the world's third and fourth largest economies respectively. When China is in a booming tendency, Japan is recovering from the long economic stagnation and India is also growing by pursuing liberalization and structural reforms, and other countries in the region are, by and large, demonstrating their strong resilience which was severely tested by the Asian crisis of 1997-1998. With the overall recovery, economies in Asia are integrating at a fast pace (Asiatimes, 2007).

The Asian governments have done some efforts to support market-driven economic integration to fit for the global market. Developing Asia as a whole has make remarkable progress all the way. And Asian economic performance is positive for investment:#p#分頁標題#e#

Economic growth in emerging East Asia remained strong in the second half of 2007, in many cases performing better than expected—supported by healthy growth in consumption, investment, and continued solid exports. Inflationary is a tough problem for foreign investment as inflationary pressures have been increasing across the region over the past several months, with headline inflation reaching multi-year highs in several economies on higher food and energy prices (China view, 2007). The external environment for emerging Asian economies is expected to weaken somewhat in 2008, and the decrease has some connection with economic moderation in industrial countries, elevation of oil and commodity prices and continuous volatility of global financial markets. Under specific domestic conditions facing the region’s economies, monetary authorities need take out relevant policy responses to the changing external environment, for example, the greater exchange rate control. Some other policies are also considering the management of the consequences of rapidly increasing capital inflows, the improving of the investment climate, the strengthen of the financial markets (Hassan, S. and Kaynak, E., 1994).

Analysis and evaluation of risks associated with Asian markets.

As investment environment, Asian markets have risks too. Firstly, Asian is not that developed as Europe and America. Many regions are still rural areas and the economic market is not mature.Although life has improved for most rural Asians, about670 million still live in poverty, and they must tolerate lower levelsof health,education, and general well-being than their urbancounterparts. About 2 billion people live in rural Asia. Another300 million are expected to join their ranks by 2020(Rosegrant, M. and Hazell, P. 2001). The vastmajority of these rural inhabitants still rely, directly or indirectly,on agriculture, forestry, or fishing for their livelihoods, a dependencethat places enormous pressure on natural resources. Thecontinuing degradation of these resources could well causesocial conflict over remaining resources and discontent aboutthe widening gap between urban and rural quality of life. Theseproblems would be particularly severe in South Asia.

Secondly, Asian market relies great on American Market, and welcomes the western investment. The possibility of a US recession remains a risk given underlyinghousing market weakness and growing concern about a spilloveronto consumer spending and business activity in general. Ifthe US economy slows sharply, its effect on global trade wouldbe significant—it remains an important source of demand formany East Asian exporters, and for the PRC in particular (21%of total exports in 2006, and higher if factoring in third-partyeconomies’ re-exports)(Krugman, P. and Obstfeld, M. 2006). The US supreme turmoil could alsospawn a reassessment of housing prices globally. Other countrieswith significant house-price inflation in the past few years, suchas some European countries—particularly the UK—and Australia,also remain vulnerable to a house-price bust. If the US economyenters a recession and the global economy substantially slowsin tandem, the impact on emerging East Asian economies will be potent. Even if the US avoids a recession, global financial markets seem to be entering a period of increased volatility, and the resulting market adjustments could instigate further bouts of turbulence. Some market adjustments that correct mis-pricing and reassess risk exposures of financial institutions should be welcome—as the extended period of economic and financial stability instilled a sense of complacency and deteriorated market discipline. But initially benign corrections could rapidly turn disruptive. Credit risk re-pricing and retrenchment from high-risk assets—taken in the context of the complexity and embedded in new investment vehicles—have caused major clogging in money/inter-bank lending markets. Continued strains in money markets—and in some credit markets—will likely tighten general credit conditions by increasing the cost and reducing the amount of funding. In major industrial countries, such as the US and the euro zone, lending standards have been tightened and there are signs that the overall credit supply to businesses and households is being reduced.#p#分頁標題#e#

Besides, the labor cost is rising greatly. The Asian market used to be defined as world factory for its low cost labors. In many textiles related companies, material processing trade is one of the most important export modes. For Waitrose, the cost of self-made food would rise than before. Actually, the rising purchasing power and rising labor cost are tightly connected; a balance should be reached between the advantages and the disadvantages.

Selection of appropriate country markets within Asia for Waitrose.

One of the most important decisions in international marketingis market selection. A proper nation for the targeted market for Waitrose is of key importance. It may not only influence the Asian region development, but also international market strategy of Waitrose.There are barriers, which make entry to a number ofmarkets impossible or very difficult. There may be markets,which are not profitable or are not worth the trouble. Further,there may be markets, which are very risky due to political orother reasons.Therefore, it is important to select one appropriate country market within Asia for Waitrose.

RaiUniversity, 2008 P. 26

The chart above generally shows the preparation before the decision is made. The first step in any management decision-making process is todeterminethe objectives. The market selected to serve a particular international marketingobjective need not necessarily be the best suited to achieve someother international marketing objective. Various markets mayhave different degrees of attractiveness from the point of viewof different objectives.After determining the criteria for market selection, the nextimportant step in market selection process is to conduct apreliminary screening of the markets. The objective of thepreliminary screening process is to eliminate the markets, whichare obviously not potential enough.The parameters used for the preliminary screening may varyfrom product to product. However, parameters like the size ofpopulation, per capita income, structure of the economy,infrastructure factors, political conditions etc. are commonlyused.For example, if the living level of a country is low, the future of a supermarket striving for qualifies goods and services should be bleak. Preliminary screening enables to eliminate which obviously donot merit consideration at the very outset. There would be alarge number of markets left even after the preliminary screening.They are further screened with the help of moreinformation than was used at the preliminary screening stage.A thorough evaluation of the short-listed markets is done withreference to the specific parameters and criteria and the marketsare ranked on the basis of their overall attractiveness.

After a general analysis of how to select a market, we can come to an suggestion that China will be a good potential market for Waitrose in the Asian country. And we will give our detailed explanation. PESTEL is a strategic planning technique that provides a useful framework for analyzing the environmental pressures on a team or an organization (Rogers,J.1999).The PESTEL strategy consists of political, economic, social, technological, environmental and legislative factors. We will analyze all the relevant factors one by one: China is famous for its peaceful foreign relationship, and the political environment is harmonious in China. After entry into WTO, the Chinese government breaks a lot of regulations and barriers to welcome investment. From the economic view, China is enjoy its booming momentum, the speedy development trend is showing a brand new China to the world, and the 2008 Olympic will definitely provide a well constructed China to the world. Chinese society is peaceful comparing to some other Asian countries, which are full of revolts and conflicts. Technologically, China has advantages too. The self-made satellites have proved the Chinese technology strength. And Chinese environment have improves a lot. The public are welcoming the new ideas and creative attempts. The socialist legal system has been strengthened after long term development. The chart below gives a visual illustration of the PESTEL strategy.#p#分頁標題#e#

The Facilitator’s Toolkit. 1999

Entry-mode strategies and exit strategies for selected country market

Companies with successful products in one market may decide to venture into the international arena in order to increase their sales, profit, market share and long-term opportunity for success (Tse, E. 2008). The decision to enter new markets should not be undertaken lightly, however, and products which are successful in one market may not be popular in other countries. For Waitrose, careful studies before entering a market and the rewards from implementing an international marketing program can be substantial. When designing a strategy for entry into a new arena for Waitrose, there are two critical factors worth considering: how to expand the business to new customers, geographies and how to finance the growth of the company.

If Waitrose wants to expand the business into new geographies, new products or serve new customers will need to select an appropriate growth model: organic growth, franchising and acquisition (Steams, T. and Carter, M. 1995). Each has its advantages and disadvantages. Waitrose needs to weigh the growth models depending on its own strengths and weaknesses. The company will invest in new assets and establish their own management teams, and will apply own business practices, reporting and monitoring of activities. Provided external funding is available, the entrepreneur’s independence will be intact – the owner will ensure that new markets / clients are served in a manner that reflects the core competencies of the firm. This model will be suitable for businesses that require intensive customer service and provide value by knowing and thoroughly meeting specialized customer needs; or for businesses that serve highly-specialized niche markets. The disadvantages of the organic growth model lie in – expansion will be limited by the capacity of the firm to raise funds, open up new locations and management practice. The second is the franchising model, which is quite popular nowadays. The entrepreneur may find existing firms that will operate as franchisees. Thus, the entrepreneur will share the risk of business expansion and will minimums both potential losses and capital needs. On the other hand, however, the entrepreneur (the franchiser) gives up a portion of the profit to an external company; and will be unable to keep track of the business in the same fashion as with organic growth. This model may be suitable for firms in industries that offer a standardized product, where customer service processes are straightforward and monitoring is easy to perform. The third one is the acquisition model which allows rapid expansion. The entrepreneur may be able to capture significant market share by acquiring another company already on the market. The acquired company may possess valuable assets, such as customers, know-how, or presence in strategic locations. Furthermore, the acquired company may not match fully the core competencies of the acquirer’s business. The entrepreneur will be dependent on the business culture and skills of the staff in the acquired company, and will need to ensure that management understands the company objectives and follows the strategic plan set ahead. For Waitrose, i think organic growth is the best choice for its targeted market and characteristic.#p#分頁標題#e#

In case the failure of entry into a new market, the exit strategy should be prepared (Riddle, J. 2008).There are a number of options for executing an exit strategy. The first option for a company to become public is through an initial public offering. The second option is sale to a competitor. This is by far the most common exit strategy for entrepreneurs. Every year hundreds of companies are bought by competitors. The third option is sale to a financial investor. This option is becoming more and more popular as the private equity industry is growing bigger. Finally, the fourth option is the leverage strategy. Under this strategy, lenders inject a company with cash, which is then used by the entrepreneur to conduct a share buyback. This is a popular partial exit strategy (Growth Business. 2006).

An organizational structure for the implementation of the above strategies.

Among the multinational companies that enter China, either to manufacture goods or to sell to Chinese markets, there is almost a conclusion of which ones will succeed and which will probably fail. It’s a matter of attitude. Those that enter with an appreciation of China’s multifaceted diversity fast pace of change, and history and culture — in short, those with an understanding of context — tend to have a better chance of finding the markets and revenues they’re looking for (Ittner, C. and Larcker, D. 1996). Therefore, an organizational structure for the implementation designed for Chinese market is necessary.

China’s transition from a planned to a market economy has revolutionized business. International and local competitors are racing to serve the expanding market with a broadening array of products or services via new and increasingly varied distribution channels. The regulatory environment governing all this activity is moving toward greater liberalization. The liberalization is a great for the investment of Waitrose.

However, achieving a quantum jump in the size of its business within a short period of time is more difficult than it seems to be. Without a deep understanding of China’s context; the nature of its social, regulatory, economic, and infrastructure environments; how they’re changing in a period of explosive dynamism; and how they affect one another, you cannot tap the true potential of China’s market (Asia economic monitor. 2007).

There are several elements of the Chinese context that deserve consideration. Each involves a kind of geopolitical differentiation. The first is the consumer market, which is heterogeneous and changing fast at both the macro (regional) and micro (city/township) levels. The second is China’s regulatory environment, which has been liberalizing for 15 years but has recently suffered some hiccups. The third element is Chinese culture, which is opening to the outside world in ways that have surprised even the Chinese as globalism integrates China with the rest of the world. And the fourth is, in a sense, a consequence of the first three: The myriad opportunities in China stem directly from the newness of Chinese growth and manifest themselves in a nonlinear, disruptive manner that requires a particular mind-set to manage.#p#分頁標題#e#

For the past 15 years, the Chinese consumer market has been notable for its fast-paced growth and receptiveness to new products. But that doesn’t mean that the whole country is moving forward at the same pace and in the same way, and therein lays the growth challenge (Kotlerandet al. 2001). Many global companies are setting targets for their China operations that they can’t possibly reach without expanding beyond the biggest demand centers — Beijing, Shanghai, or Guangzhou, for instance — into second-, third-, or even fourth-tier cities. As you move into China’s second-, third-, and fourth-tier markets, you’ll find a steep drop-off in infrastructure, channels, management sophistication, and disposable income. Entering these new geographic markets can be intimidating to multinational companies. Many foreign executives have never even heard of cities like Datong or Baoji, let alone had experience doing business there.

Companies entering China will also find a variety of evolving tastes to serve, as consumers get used to goods and even foods that they were unfamiliar with before. Just take KFC for example, the Chinese are not use to hamburgers or French fries before, but their ability to new issue or ideas allow the rapid and the overall popularization of KFC. An enormously important element of the business context is the regulatory environment. We’ve found that too few business leaders really understand the regulatory context, and even fewer understand how it’s likely to change in the future. Although some outsiders may perceive that Beijing makes it very difficult for foreign companies to break into the Chinese market, the truth is that for the last 15 years, China has been quite progressive. That doesn’t mean that every industry embraces foreign competition, but compared to countries like Japan and Korea, which are still fairly restrictive toward foreign trade and business, China has been quite open. That’s especially true for such industries as fast-moving consumer goods, where the market is open to all participants and competition is very intense (SolomonandMichael. 1999). Increasingly, the Chinese government is opening up its industries to more foreign participation, sector by sector and step by step

China’s regulators are balancing sometimes competing concerns; they want to continue the country’s growth, but within boundaries that will prevent the economy from overheating and collapsing. They want to help China integrate into the international community, but they recognize that nationalism is still a potent force. They will need to allow global competitors entry while ensuring that Chinese companies don’t lose their edge. Insight into how Beijing adjusts its rules to address these concerns will help executives weather the inevitable regulatory vicissitudes of China.

A strategic control system for managing the implementation of the above strategies.#p#分頁標題#e#

Strategic control systems encompass three elements: the strategic implementation process, internal monitoring and external monitoring. Strategic control advocates emphasize three primary management control activities during the strategic implementation process. After setting a specific entry strategy, the control system is playing a monitor role ensuring the operation of the strategy.

Running a portfolio of businesses takes rare management skill, and that’s all the more true in China. Those constraints — of funding, resources, and personnel (China’s leadership bench strength is relatively shallow) — necessitate trade-offs. Running a portfolio of China businesses requires sizing up the trade-offs across multiple dimensions of context. And given the speed of change in China, running the China portfolio requires continuous reassessment of those trade-offs (Howard, N. 2000). The executive will need to communicate constantly with the company’s headquarters on these trade-offs and their implications for the company’s investment in China and the potential returns; frequent alignment with the headquarters is a key to success.

Therefore, executives in China need an overall view — the perspective gained by rising above the quotidian operations to discern the overall landscape and the patterns of change. The ability to recognize patterns amid of seemingly chaotic and sometimes contradictory data is invaluable. The strategy must be able to see beyond the obvious, anticipate the potential discontinuities in the marketplace, and decide appropriately how to further the company’s interests. A pure operational view focusing on near-term incremental phenomena and linear extrapolation of past data will simply not work. Success of entry into China requires a leader who can cope with the everyday change in the Chinese market, whether they involve supply and demand or regulatory, political, social, or economic issues (Tse, E. 2008).

Conclusion

結論

According to the strategic analysis of potential Asian markets for Waitrose, and then on the basis of the strategic analysis and market selection, we come to a market entry strategy for the chosen markets in Asian China for Waitrose. Nowadays, globalization of business is having a dramatic impact on the flow of goods and services which, in return, is speeding up the international process of the world economy. And Waitrose, as one of the top UK supermarket, are following the business trend to expand its domestic market to the international world, providing the high quality food and service. After the Analysis and evaluation of relevant external and internal factors and Asian markets, Chinese market, with its harmonious society, positive purchasing power and rising economy momentum, is a good choice for the first step for Waitrose's entry into Asian market. We believe, on the basis of the careful market entry strategies, the organizational implementing structure and a strategic control system, the future of Waitrose in China will be bright.#p#分頁標題#e#

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參考文獻

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