BSBMKG605: Evaluate International Marketing Opportunities - Organisation For Economic Co-Operation - Assessment Answer

December 06, 2018
Author : Ashley Simons

Solution Code: 1IED

Question:Evaluate International Marketing Opportunities

This assignment is related to ” Evaluate International Marketing Opportunities” and experts at My Assignment Services AU successfully delivered HD quality work within the given deadline.

Evaluate International Marketing Opportunities Assignment

Assignment Task

Objective1A

To provide you with an opportunity toassess international trade patterns and identify their likely importance for the business

Activity

What are the current international trade patterns in your industry and how do these affect your business?

How might a recession negatively affect global demand and the economy?

Objective1B

To provide you with an opportunity toresearch international business and electronic commerce market factors,and assess opportunities to enter, shape or influence the market for their likely contribution to the business.

Activity

Choose a country that you may potentially want to enter (in terms of marketing).What international business and electronic commerce market factors may affect your ability to enter, shape or influence that market (and how)?

Objective1C

To provide you with an opportunity toidentify international markets operating under free trade or protectionist arrangements and estimate likely ease of entering and trading successfully.

Activity

What are free trade and protectionist agreements?

Give examples of countries with free trade arrangements and those with protectionist ones.

Objective1D

To provide you with an opportunity to identify international trade policies and agreements and estimate their likely impact on international marketing opportunities.

Activity

Explain the following:

Customs unions

Bilateral trade agreements

Multi-lateral trade agreements

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Solution:

The Organisation for economic co-operation and development has a huge role to play in online purchases. Organisation for economic co-operation and development (OECD) enables online payment systems for e-commerce that regulates online shopping around the world. OECD also takes care of the relevant taxes and duties and regulates it.

Activity 1 A

The current international trade pattern in grocery industry is that the global grocery giants are struggling to make their place while traditional trade is remarkably resilient. Except for this the channel and market structure taking shape in individual emerging economies are distinct from each other. Thus there is no obvious trade pattern. This affects business adversely because one can’t predict what is going to happen and what planning are required in such circumstances.

Recession is a period when purchasing power of customers in an economy reduces to a very great extent and at the same time the prices of goods and services touch sky. This further implies that the demand of any item will also get affected.  Recession also increases the unemployment in the economy and stock market also fells down.

Activity 1B

The country that is chosen for marketing purpose is Japan. There are various international business and electronic commerce market factors that will affect ability to enter and influence the market. These factors are social, cultural, technological and legal. Other factors are geographical groupings, currency exchange rates, online customer groupings, etc. The most significant factors will be social because the formation of Japanese society is quite different from all the other societies.

Activity 1 C

Free trade agreements are those in which two or more than two countries are having an agreement that there will be no charges, tariffs or barriers of trade among them. This implies that a foreign product can easily compete with domestic products. Protectionist agreement is the one in which a nation protects its domestic industry and places various tariffs on foreign companies so that they cannot compete with domestic industry.

There are many countries that have entered in free trade agreements. For an instance European Union has free trade agreement with Albania, Egypt, Chile, Iceland, Norway and Mexico. South Korea has free trade agreements with Chile, Peru, and Singapore. There are many countries that have protectionist agreement. United States is the country that has protectionist agreement with a number of countries. Russia is also one of those protectionist countries.

Activity 1 D

Customs unions are a group of those states that have agreed to charge same import duties and they usually allow fee trade between themselves. It is also meant for common policies between those countries.

A bilateral trade agreement is usually entered between two or more countries in which all the participants agree to reduce quotas, tariffs and any other trade restriction between them.

Multilateral trade agreements are those agreements that are entered between three or more countries for the purpose of trade. These agreements are quite difficult to be entered and negotiate initially but once entered and agreed they are very beneficial for all the nations involved in it in terms of trade.

Activity 2 A

For Japan following are the economic, political, social and cultural factors that will affect international marketing opportunity in it:

Economic: The economic conditions of Japan are very favourable in terms of tariffs, taxes and labour. Thus it will not be an issue.

Political: As compared to other nations in the world the political stability of Japan is very high. Thus, it is again not an issue.

Social: The societal norms of Japan are distinctive and it has potential to affect the marketing opportunities.

Cultural: The culture of Japan is very different and they are very particular about goods and services and thus cultural factors may be a big issue.

The software application that Spar uses for its international electronic commerce operations is NetSuite. NetSuite is available with distinctive features for different markets so it can easily be modified as per the need of other markets.

Activity 2B

In grocery industry there are some international trends and developments that affect market needs. These trends are authenticating the fresh food story, convergence of concepts driven by convenience, impact of changing regulations, turning workforce concerns into opportunities and consolidation propels operational improvement. In this way consumer’s demand is increasing gradually and keeping up with these demands is the key.

Activity 2C

The best suited emerging economy for grocery industry is UAE. This is because of the fact that UAE is not much explored by the grocers and other companies. There is high demand of quality grocery stores in UAE. Due to the high demand it is wiser to select this market. The purchasing power of people is also high and the economy of UAE is also very stable. These are the major factors of success in any market and are present in UAE.

Activity 3A

The political, financial stability and corruption risk factors in Japan are described as under. These factors have potential to affect the market in Japan.

Political: If the government in Japan changes then along with the government trade policies and rules and regulations also changes. This is a very great risk for the operations of the business.

Financial stability: The factors such as recession, inflation and purchasing power are risks for the business. As a matter of fact the economy of Japan is very stable and a business can easily tackle these risks.

Corruption Risk: As a matter of fact Japan is the least corrupt country in the world. This implies that there is no risk involved related to corruption in Japan.

Activity 3B

Antidiscrimination legislation: The laws in Japan are very strict and no company can indulge in discrimination practices. A company found to be discriminating on the basis of cast, community and creed is sure to be punished.

Consumer laws: There are various laws related to food and safety in Japan. A grocery company has to meet all the norms of food and safety.

Ethical principles: Japan is the country where ethics comes first before anything else. A company has to follow ethical practices and principles while operating here.

Extra-territoriality provisions of the trade practices act: Article 6 AMA prohibits unfair trade practices and unreasonable trade restraints in Japan.

Foreign investment limits: Japan is striving to double foreign direct investment by the year 2020.

Labour laws: Article 15 of labour legislation Act regulates working hours, minimum wages , etc. of workers and also bounds employer of giving everything in written.

Legal aspects of bilateral and multilateral trade agreements:  Departments of foreign affairs and trade in Japan controls the legal aspects of bilateral and multilateral trade agreements.

Privacy laws: In Japan Privacy is governed by Act of Protection of Personal information. There is no specialised law on online privacy. This body applies to business operators that have personal information of more than 5000 individuals.

Taxation laws: Taxes in Japan are paid on the property, income and consumption on municipal levels, national level and prefectural level.

WTO dispute resolution system: WTO resolution system in Japan is very strong. Japan is not only appellant but in many cases Japan has provided panellist to WTO for resolution of conflict.

Australian Standards for -

Environmental matters: The environmental protection is jointly administered by territory, state and local government in Australia. The government legislation governs the assessment process and approval of cultural concerns and national environment.

Human rights: The Australian human rights commission governs the human right practices and policies in Australia. The Aboriginal and Torres Strait Islander, children, disable, etc are covered under human rights.

Labour relations: Australian industrial relation commission governs the labour relations in Australia. All the issues such as employability, wages, working hours, etc. are covered by the department.

Packaging: The Packaging Council of Australia and product safety Australia looks after packaging , supply chain, retailer requirement , etc. and they have also laid down various policies and penalties and consequences for packaging of a product.

Risk management: The ministry of finance Australia has AS/NZS ISO 31000: 2009 standard for the management of risk. It provides members with general guidelines and principles.

Explanation of following-

OECD international guideline for consumer protection in context of electronic commerce

It is designed to help the customers in ensuring that they are protected while they shop online and there is equal safety as they buy from a local store.  There is a guideline that sets out core characteristics for effective consumer protection for business to consumer transactions online. The aim of this guideline is to help in eliminating uncertainties for business and well as consumers at the time of buying and selling products online.

Australian government policy framework for consumer protection in electronic commerce

There is a strict policy framework of Australian government to protect the interest of the consumers in electronic commerce. It helps the customers in buying safe while providing guidelines. It also provides hears the voice of customers in case of any issues.

Australian guidelines for electronic commerce

The Australian Guideline for electronic commerce aims in enhancing further the confidence of consumers in electronic commerce by assisting them with guidance to businesses on how to deal with the customers while engaged in trade to consumer electronic commerce. There is a checklist provided that helps in enhancing the best practices and also help in dealing with the key issues that are faced by the business.

Activity 3C

Economic conditions of Japan are very favourable in all terms for a new business. This is due to the stability of the economy. Except for the stability the raw material and skilled labour is easily accessible in Japan that is a very positive sign in any potential market. The only issue that can affect the business is inflation. If there is inflation or recession in the potential market then the business is affected negatively and the growth of business also gets hindered.

 Activity 4 A

The goal of Spar behind entering into Japan is to achieve its objective of expansion into a developed and stable economy where purchasing power of consumers is very high. The business wants to achieve its goals and objectives while aligning them with its vision and mission. Thus, to expand the business and increase its revenue without undertaking much risk is the goal of Spar behind entering into Japan.

Factors that are important to consider while analysing potential market are social factors, economic factors, political factors, legal factors etc. It is also important to consider other factors such as purchasing power of customers, demand of the products, environment and raw material for production, supply of labour force while considering entering into potential market.

Information system that is needed to look at while analysing a potential market is management information system, transaction processing system and decision support system. These information systems will be very helpful in analysing data and take decisions.

Activity 4 B

The marketing opportunity that has been identified in previous sections in Japan will have impact on current business and customer base. This opportunity will expand the current business and help in achieving current objectives. It will also increase the customer base in longer run. This opportunity might result in altering some of the current policies of the business.

SWOT analysis

PEST Analysis

Activity 4 D

Formula for calculating Return on Investment is as follows

Return on investment = Net profit / Total Investment *100

In a business it is very important to analyse potential competitors because it helps the business in discovering its potential and at the same time knowing the weaknesses and opportunities. Analysing competitors also help in formulating strategies and understand the actual supply and demand. There are a number of tools that help in analysing the competitors. These tools are Ansoff’s matrix and Porter’s five forces analysis.

Activity 4 E

Ranking by merit system is a process of ranking various opportunities on several bases. This helps in promoting something that is at the highest rank. This implies that it will help in preparing a merit list of the marketing opportunities and then raking them so as to choose the best one.

There are various factors that are required to be considered when considering viability of marketing opportunities. These factors are favourable marketing conditions, demand of the products, high revenue, availability of raw material, legislative policies of the country, scope of advancement, environmental norms, etc.

 Skills and knowledge Activity

  1. A potential market in another country is China. It will be required to adapt to the communication style of China to grab the market because of various reasons. The local communication style helps in understanding customers well and this further helps in building business by giving personal touch. This is why it is very important for a business to understand the communication style of the country where it is operating.
  2. When exploring potential new markets a business need to develop an extensive guideline on operations and the procedure that they will use to operate and enter into new market. It will also have to follow legal norms such as human rights, risk management, packaging, WTO, GATT, bilateral and multilateral policies while exploring potential markets.
  3. When exploring international marketing opportunities software will be required for various functions such as financial management, human resource practices, managing customer data base, financial planning, etc.
  4. The mind map for global and country specific dimension related to industry directions, practices, economic factors, social factors and trends is given below :

Skills and knowledge Activity

To analyse risk factors there are various techniques available that can be used by the business. Sensitive analysis can be used to ascertain Net Present Value. This will help in finding out the potential risks associated with the project. Scenario analysis is also a tool to analyse the risk factors. Monte Carlo simulation will also be helpful in such a situation.

Major Activity

Review global market environment

Situational analysis is a tool that helps in reviewing global market environment. It helps in understanding internal as well as external environmental factors so as to further understand the customers, capabilities of organisation and business environment. There are various tools for situational analysis that are Porter’s five forces analysis, SWOT analysis and 5C’s analysis. Here Porter’s five forces analysis and SWOT analysis will be used:

1.Review global market environment

Porter’s Five Forces Analysis

Porter’s Five Forces Analysis

International business and electronic commerce market factors

In grocery industry when it comes to international business and electronic market factors there are some factors that affect market needs. These factors are authenticating the fresh food story, convergence of concepts driven by convenience, impact of changing regulations, turning workforce concerns into opportunities and consolidation propels operational improvement. In this way consumer’s demand is increasing gradually and keeping up with these demands is the key.

Risk factors for international marketing opportunities

The risk factors for international marketing opportunities include threats from substitutes, higher bargaining power of consumers and higher competitive rivalry. Along with that that marketing of the company will also get affected by social risks, cultural risks, political risks and technological risks. These risks will affect the international marketing opportunities of the business. The analysis of risk factors suggests that the most significant factor of risk is political risk and corruption risk is also associated with this.

International business and electronic commerce marketing opportunities

The opportunities include the use of latest technology to produce organic food items and satisfying the needs of the customers. The company can also use latest software to meet the global demands. International business and electronic commerce marketing opportunities are the two different domains and marketing opportunities in both of these are different. In international business the company has an opportunity to enter into new market and capture more market share. The company also has an opportunity to use latest technology to fulfil the demands of global market and thereby generating more revenue.

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