Entering the International Market as an Asian Company

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Table of Contents

Executive Summary
Introduction
Discussion
Conclusion and Recommendations
References

Executive Summary

BenQ Company has many expectations concerning the mobile phone industry. It has formulated extensive plans to grow and expand its business products and services in the European market. Europe has an extensively lucrative business environment and many companies always eye the region which has many opportunities for growth and development.

BenQ has the same expectations and is embarking on succeeding in the extensively competitive business organization. There is therefore need to critically assess an international market before embarking on investment so as to avoid some of the problems that may befall a company such as; lack of customers, conflict in management, and bankruptcy.

Introduction

Any business venture needs to employ strategic marketing incentives to succeed in international markets. Before a company decides to indulge in business activities, a thorough research and development is paramount to ascertain the feasibility of such a venture. Lack of conducting a thorough research and development may contribute to massive losses.

This is because different countries observe different organizational cultures which must be clearly understood if an investor is hoping to withstand stiff competition that is prevalent in many industries. An investor must possess all the information pertaining to the industry of interest.

This paper will formulate strategies suitable to penetrate the International market where companies encounter stiff competition from other businesses offering the similar products and services (Hill 2011). These strategies are necessary to enable a business break even and start earning returns on investment.

There are various considerations to be brought on board bearing in mind the cultural difference in Asia and Europe. These have to be considered as they have a role to play in ensuring business failure or success.

There is every need to embark on proper marketing strategies to ensure the success of a business. Marketing in business is paramount as it makes the difference between succeeding and failing. Marketing may encompass thoroughly evaluating your competitors so that their strengths and weaknesses are known.

This gives the potential business an edge in formulating its entry strategy. This entry strategy should be clearly strategized as it would be the vocal point to handle the other competitors effectively. A weak entry strategy means weak survival tactics in a highly competitive environment.

Discussion

Before highlighting on the necessary measures needed for a company to succeed in the lucrative European market, it is necessary to revisit briefly, BenQ’s case so as to understand what measured need be taken. BenQ is a company based in Taiwan, specialising in mobile phones products and services. The company had a vision to be a leader in the mobile phone industry by offering the best products and services.

Based in Taiwan, the first mission was to offer unrivalled mobile phone services in Asia that would make advancements to other regions including Europe (Chow 2002).

BenQ was determined to make a mark in the mobile phone industry even after it acquire Siemens to form a new company; BenQ Mobile. BenQ Mobile later became bankrupt after encountering massive losses. These losses emanated from poor marketing and management strategies which resulted to bankruptcy and closure of the business.

Before any company decides to engage in international acquisitions, it has to effectively understand the company it intends to acquire so as to be well served with all necessary information. This information should include; the products of the company it intends to acquire, the number of employees in this new company, the years the company has been in operation, how well the new company is received in its host country.

This information should guide any company that intends to engage in international business acquisitions. One important factor to consider is the host country the company intends to conduct its businesses. This is extremely paramount as different countries have different people who express different cultures.

Some of the things to consider before indulging in international business are;

Culture of the potential customers

Why it is important to consider the potential country is important in any business. This is in respect to the culture factor expressed above and it affects the business in many ways. One way that culture affects business is; because different people have different cultures, there may be some cultures that may not use the products that are intended to be sold in the foreign country.

An example is a company dealing in pork products, which may not be allowed to deal in their products in a country whose population does not eat or use pork products. This example explains the need to consider the country where a company decides to take its products. Culture is important as it dictates whether a company’s product will be accepted or not.

It is also important to consider culture of that foreign country because; different cultures dictate different purchasing behaviours (Aspelund, Madsen & Moen 2007). It is paramount to be aware of the inhabitants of that country where the products are intended to be taken, in this case; Germany. Germany has one of the most advanced technological infrastructures.

This is one factor that should attract BenQ to Germany. This would ensure BenQ does not encounter connectivity problems once in Germany, as problems in connectivity may contribute to customer losses. These customers are what the company is looking for and therefore, all measures should be put in place to ensure they (customers) are not disappointed with telecommunication connectivity problems.

Germany also offers ready market for mobile phones as the country has already attracted numerous investors who deal in other businesses. These businesses are in need of customers and noting that there has to be communication between investors and their customers, mobile phone business may perform well in Germany (GFK 2012).

Customers in Europe possess different purchasing behaviours compared to customers in Asia. Since BenQ is a Taiwan Company with intentions of investing in Europe, this is one factor the company should not overlook. Customers in Europe will be the people who will contribute the success or failure of BenQ in Europe.

For this reason, it is important to assess and know their purchasing behaviours. This will have prepared the company in evaluating strategies that would take care of the difference in purchasing behaviours in Europe.

It is noteworthy to note that in Europe, there are different approaches that can express consumer behaviour. These are; the socio-economic and explanatory variables. The socio-economic variables make the external variables while the explanatory make the internal factors. It is indispensable to note that products used by the European customers may constitute signs that permit these customers articulate their social standing.

It is also worth noting the price tied to membership to a certain social class. An example to note is the way Mercedes Benz has been associated with a certain class and this can be used by BenQ to assess if these European customers have a brand to which they offer much class. Europe has a culture where people like to be served with speed.

This means that time is much valued in Europe and this would be considered before embarking on a business venture in Germany. BenQ’s products should serve the needs of these potential customers with speed and this can be achieved easily as BenQ’s products have had no problems at home regarding speed.

This would assist in evaluating a brand that would be well received by the foreign customers (Chisea 2000). All these considerations are associated to the assessment of culture and purchasing behaviours of the potential customers.

Another thing worth noting under culture is the reference groups. These are the groups known to influence the behaviour of customers in relation to the perceived risk. Examples in this category are the famous green customers who associate themselves with products that have less or no demerits to the environment.

There may be such groups in the foreign country that a company is intending to invest and there is reason, therefore, to conduct thorough research concerning such groups. If a country is made up of a larger percentage of such groups, then a company must re-evaluate its products if they meet the requirements of such a group and make necessary resolutions.

Since BenQ is a Taiwan company interested in investing in Europe, it falls under the category of “Catch-Up” R & D. This is broken down to mean that the company coming to invest in Europe is from a developing nation. This developing nation wants to invest in a developed nation and there is, therefore a need to consider any inclination of homogeneity prevalent in Germany.

This trend involves a certain population who may be the minority in such an environment, but may be willing to undertake their products. Such a group exists in Germany and is usually made of the business people elite, the young, as well as, the opinion leaders. Germany has a potential market for mobile phone products as it emerged the second after the United Kingdom, in purchasing smart phones (GFK 2012).

Entry strategy

For BenQ to get into the European market, it has to adopt an entry strategy that will give it a grip. An option is acquiring T-mobile Company to introduce its products to Germany. T-mobile company has been experiencing problems and would therefore be possible to get into an agreement with. An ailing company is mostly in need of financial support so as to remain relevant in the business sector.

T-mobile has been experiencing problems with their handsets whereby customers using them have been experiencing connectivity problems. This has led to an outcry from the customers who feel disappointed by the services offered by T-mobile (Wyatt & Wortham 2011).

Customers have been complaining about network problems and this is has resulted to a massive exodus of customers from the company. This has left T-mobile Company at the brink of closure after a massive exodus and the unwillingness of new customers to seek its services, putting the company in a financial crisis.

There are some advantages that may be accrued by BenQ from acquiring this company. Some of these include; gaining a high level of competitiveness, getting leverage in finances, lowering the cost of production, raising the market share, achieving administrative benefits, and improving on profitability (Bennett & Blythe 2002).

Cost of operation will be reduced in the sense that, T-mobile has been in operation and therefore, it had met these costs already when it started. This means that BenQ will not have to meet those costs again.

As T-mobile had been in existence, it had established its own market share in the mobile phone industry and therefore, BenQ will acquire an existing market share, although there will be extensive work to be done to redeem the fading image of T-mobile. Acquiring a company offers another company an avenue to get into a new marker and since BenQ wants to get to Europe, this is one way of getting there.

Acquiring this company would make the presence of BenQ known in Germany, especially among other competitors and customers alike. In business, a company’s presence has to be felt to offer psychological effects to would be customers as they would start wondering about such a company.

By talking about the company, customers would be curious to get a chance to try its services after witnessing such an action of acquiring another company. The new BenQ resulting from acquiring T-mobile, would be cost efficient compared to the company it had acquired.

Another benefit that BenQ will enjoy is the possession of labour which is available from the acquired company. Since T-mobile already had workers, BenQ will not embark on searching for new who may be lacking in experience. Those who were already working for T-mobile had experience and can be used effectively by BenQ.

Possession of such information while deciding to acquire or merge with another company is vital as it may offer options to the company intending to invest in international business opportunities (Aspelund, Madsen & Moen 2007).

Proper marketing is vital as the potential international investor gets more information about the host country and all its challenges. This would assist in eliminating many problems such as were experienced by BenQ earlier while it acquired Siemens.

Lack of proper management and marketing were cited as the causes of the business failure. The company could continue making phones with no returns on investment. This is a dangerous trend that has to be avoided if BenQ is determined to get ahead of the stiff competition prevalent in Europe.

Organizational culture

For an organisation to be assured of meeting its development goals and objectives, it has to enforce an organisational culture that will work for it. An organisation culture is paramount in any organisation as it combines the workers who are all team players in the said organization.

Achievements of organizational goals and objectives cannot be possible if there is no formidable organizational culture. There are two types of organizational cultures, namely; divergence and convergence (Offereins & Fruytier 2007).

Divergence as defined by Ralston states indicates that individuals from a society are guided by the socio-cultural influence to preserve the precise standards system of the culture in the course of time, irrespective of other probable influences prevalent such as; changes in the political scene, technological, and economical (Ralston 2008).

Convergence, on the other hand, is defined that; individuals are motivated by technological influence to expand a standards system that is unswerving with the technology of their society, irrespective of the socio-cultural influences (Ralston 2008). These two give an insight on what should be considered by a company to succeed in competitive markets.

Since BenQ is determined to be offer technological services both at home and in the foreign country, convergence is the best form of organizational culture. BenQ is determined to be a technology strong point in the mobile phone industry, there is need, therefore, to use the convergence organizational structure. This is because the company is technologically oriented (Orlikowski 2000).

This is what should motivate the individuals in BenQ as the company is concerned with technology. This is the same technology the company has been observing in Taiwan and even though the two countries have different cultures, there is need to utilise the convergence organisational culture.

This is contrary to divergence culture which is guided by socio-economical values rather than technology or economic change. When used effectively, this type of organizational culture would assist in creation of shareholder value. It is vital to note that shareholders have high expectations regarding the running and controlling of an organization.

Shareholders are concerned and would like their company gain beneficial returns on investment. Shareholders would like to witness the increase in the number of customers as the organization moves towards achieving and improving profitability, improving margins which are enhanced by a reduction of costs of operation, utilising assets effectively, and ensuring financial risks are achieved.

Convergence mode would play a significant role in ensuring all the above are met as workers are united by the technological aspect and would forge ahead in ensuring they meet their set targets. This mode would therefore assist BenQ in achieving the set goals and objectives in a foreign country where competition is high.

Workers would be driven by achieving customer satisfaction which will give rise to adding value to shareholders as stated above, to ensure the growth and development of the company. Convergence organizational mode promotes customer value proposition as workers will be geared to attracting more customers through their services (Ralston 2008).

The difference in cultures would be exploited as the organization endeavours to meet customer’s fundamental requirements. BenQ will be in need of customers to remain relevant in the international market and, therefore, all the company’s activities would be geared towards achieving those goals. Convergence gives an allowance towards the achievement of the said goals.

BenQ Company can also use the R & D integrated network, which has numerous merits. In this network, the company has the capabilities of undertaking strategic roles that affect the entire company (Pudelko & Harzing 2008). This would give the company the aptitude indispensable to influence the proficiency of each unit for the promotion of the entire company.

This raises the global efficiency of R &D to another level and BenQ as a company is in need of such a network (Gassmann & von Zedwitz 2002). This would go a long way in handling the culture prevalent in Europe. It would assist the workers of BenQ serve clients faster while promoting efficiency which would go a long way in ensuring business continuity in Germany, where speed and efficiency are highly valued by clients.

Bearing in mind the stiff competition in Europe for mobile phone services, there is a need to enhance efficiency and competency so as to succeed in such competitive business environments (Gassman & von Zedwitz 1999). Inefficiency may easily lead a company lose customers such as T-mobile. To ensure efficiency is enhanced, all products used should comply with the set rules and regulations of the foreign countries.

That would be a step towards achieving efficiency. Another step towards efficiency would be making sure all workers are made aware of the organisation’s goals and objectives. This would make it easier to handle any prevalent challenges in the organisation.

When workers are fully aware of what they are expected to accomplish, it becomes easier to facilitate the achievement of the laid down objectives in their respective departments in the organization.

Conclusion and Recommendations

It is prevalent that for any business venture to succeed, thorough market research should be conducted lest a business sinks to failure. Conducting a thorough R & D would ensure a company does not indulge in business activities that may later result to unmanageable losses (Buderi, Weber, Hoots & Neff 1991).

In this era of stiff competition and business mergers and acquisitions, it is mandatory to conduct a thorough R & D analysis which will help in determining the feasibility of such an undertaking (Ball 2006). This would take care of the cultures of the company intending to undertake the business venture in question, as well as, the culture of the foreign country where the business is intended to be based.

A proper R & D enables avoidance of mistakes as they can be detected early when answering question like the choice between convergence and divergence. Critical definition of such organisational cultures would highlight any mistakes that may have been made concerning certain decisions.

BenQ should ensure it attracts and maintains customers so as to experience the expected growth in the international market while continuing to offer excellent services back at home.

It is vital to balance progress and development in a foreign country while maintaining the same standards back at home so as not to lose focus. Having evaluated all the positions available, BenQ may go ahead with the business venture being aware of the stiff competition in the international market, but with the will to succeed and remain relevant in the mobile phones industry.

References

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Ball, DA 2006, International business: the challenge of global competition. McGraw-Hill/ Irwin, New York.

Bennett, R & Blythe, J 2002, International marketing: strategy planning, market entry & implementation, Kogan Page Publishers, Philadelphia.

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Chow, PC 2002, Taiwan in the global economy: from an agrarian economy to an exporter of hi-tech products. Greenwood Publishing Group, Connecticut.

Gassman, O & von Zedwitz, M 1999, “New concepts and trends in international R&D organization,” Research-Policy, vol. 28, no. (2-3), pp. 231-250.

Gassmann, O & von Zedwitz, M 2002, “Market versus technology drive in R&D internationalization: four different patterns of managing research and development,” Research-Policy, vol. 31, pp. 569- 588.

GFK 2012, Demand for smart phones higher than ever before in Europe, Nuremburg, EU, viewed on <https://www.gfk.com/>

Hill C.W.L. 2011, International Business: competing in the global marketplace, 8^th edn. McGraw-Hill/ Irwin, New York.

Offereins, A & Fruytier, B 2007, “Organising R& D in globalised context: convergence or divergence? the relative influence of Dutch and foreign cultures on the organisational structure of R & D in multinational corporations,” Management Review, vol. 17, no. 4, pp. 466-483.

Orlikowski, W 2000, “Using technology and constituting structures: a practice lens for studying technology in organizations,” Organization science, vol. 11, pp. 404-428.

Pudelko, M & Harzing, A 2008, “The golden triangle for MNCs: Standardization towards headquarters practices, standardization towards global best practices and localization.” Organizational Dynamics, vol. 37, no. 4, pp. 394-404.

Ralston, D 2008, “The cross-vergence perspective: reflections and projections.” Journal of International Business Studies, vol. 28, no. 1, pp. 27-40.

Wyatt, E & Wortham J 2011, “AT & T Merger with T-mobile faces setbacks,” The New York Times, <https://www.nytimes.com/2011/11/25/technology/att-deal-with-t-mobile-takes-a-step-back.html?_r=1&pagewanted=all>

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