This report will analyze the micro and macro environments of Russia, Sweden and Spain in order to evaluate the potential to internationalize in each country. Pennine Electronics is a small to medium size enterprise based in the UK and consists of 150 employees. Its incentive to internationally integrate and diversify derives from the need to increase sales and take advantage of the product's image in foreign countries due to the different product life cycle of DVD in each country. This international integration looks to open up more opportunities and connections, minimizes competitive risk and diversifies the company's suppliers and markets.
The product is a portable DVD Player and will feature an 8-inch high-resolution swivel screen, an integrated battery with approximately 8 hours of life and multi-regional and anti-jump facilities. The retail price in the UK can vary from £50.00 - £215.00. Due to exchange rates, the product will be priced at 1000 - 2500 RUB in Russia, approximately £21.00 - £55.00. In Sweden the retail price will be 999 - 1300 SEK, approximately £90 - £125 and in Spain, it will be priced at €67.00 - €180.00.
[...] 'Assembleon' in the Netherlands is a wholly owned subsidiary that develops, assembles, markets and distributes a diverse range of surface- mount technology placement equipment. Philips holds 20% stake in Assembleon. (Philips 2012) NEW ENTRANTS SUPPLIER POWER . Typically components & supplies are sourced from Asia. (BBK Electronics 2011) (Europages 2012) . Supplier power is weak because of cheaper labour and dependence on large contracts . Strong brands like Sony are sold worldwide and set standards = strong power (Pride and Ferrell 2008) BUYER POWER . Consumers have wide choice of products . [...]
[...] (WTO.org) INDUSTRY STRUCTURE and COMPETITIVE FORCES Distribution Channels The company will be direct exporting which is the most common form of entry for SME's (Burca, Fletcher & Brown, 2004; 391) Russia has a long channel of distribution and requires a qualified Russian representative for language and business circles - an importing middleman. A good wholesaler usually provides a wide range of support, however as Russia deals with multiple suppliers they will not be dedicated to promoting. Some foreign manufacturers additionally operate their own representative office that enables control over promotion and distribution. [...]
[...] If the company were to enter Sweden, it would follow to Uppsala Model (1970's), whereby decisions to internationalize would begin in the home market and venture into another psychically closer market. However, the extreme decline in sales of portable DVD players in Sweden is too high a risk to invest, leading to a decision to remain in the company's home market and invest more in the third level of the product- its support services. References: Daviddah Resources Alibaba. [online] Available at: http://resources.alibaba.com/topic/800027698/_Which_goods_must_be_certified_ by_GOST_.htm (Accessed 23 March 2012) Victoria Makarova & Vito Giovingo Corporate Compliance Insights. [...]
[...] & Brown, L International Marketing: An SME Perspective. Essex, Pearson Education Limited. Page 391 Euromonitor 2011 Consumer Lifestyles in Russia [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor 2011 Internet Retailing in Russia [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor 2011 Internet Retailing in Spain [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor 2011 Internet Retailing in Sweden [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor 2011 Consumer Lifestyles in Sweden [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor 2011 Consumer Lifestyles in Spain [Online] Available at:http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 20 March 2012) Euromonitor Video players in Spain [Online] Available at: http://0- www.portal.euromonitor.com.emu.londonmet.ac.uk/Portal/Pages/Search/SearchRes ultsList.aspx (Accessed 25 March 2012) Euromonitor Portable media players in Russia. [...]
[...] Text and International Case. 1St ed Germany : Gabler Asian Products BBK Electronics Corp [online] Available at: http://www.asianproducts.com/profile/A10507667696046/bbk-electronics- corp.html (Accessed 1 April 2012) BBK Electronics [online] Available at: http://www.bbk.ru/ (Accessed 10 April 2012) BBK Electronics Co. Ltd [online] Available at: http://eebbk1.en.hisupplier.com/ (Accessed 10 April 2012) EuroPages Woosung Eng [online] Available at: http://www.europages.co.uk/WOOSUNG-ENG/bch-K99-KOR001850-000009124001- 28/company-information.html (Accessed 10 April 2012) Media Markt 2012 [online] Available at: http://www.mediamarkt.com/about.html (Accessed 1 April 2012) Media Saturn 2012 International Dynamic Exposure [online] Available at: http://www.mediamarkt.com/about.html (Accessed 1 April 2012) Metro Group 2012 Sales Brands Media Markt [online] Available at: http://www.metrogroup.de/internet/site/metrogroup/node/11177/Len/index.html# anker236325 (Accessed 1 April 2012) Philips Suppliers [online] Available at: Www.philips.com/about/company/businesses/suppliers/ (Accessed 2 April 2012) World Business Culture Business Culture in Spain [online] Available at: www.worldbusinessculture.com/Spanish-Business-Negotiation.html (Accessed 2 April 2012) World Business Culture.2012. [...]
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