Activplant: Entering the European Market

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Market Entry Strategy
Sales Strategy
Service Strategy
Conclusion
Works Cited

Introduction

Activplant intends to enter the European market in order to increase its revenue and profits. However, the opportunity in the European market is associated with high risks. Moreover, the company is facing financial constraints. This paper will analyze the options that the company has to enter the European market. Based on the analysis, recommendations will be made to enable the company to minimize risks.

Market Entry Strategy

Activplant has three options namely, going it alone, utilizing partners, and postponing the entry. Going it alone means that the company will have to establish operations in Europe so that it can manage sales and project delivery on its own.

This strategy is likely to improve customer satisfaction. However, it is not viable given the fact that the company will have to utilize its limited internal financial resources. In addition, the company’s objective of realizing $1.5 million in sales in the first year and making profits in the second year, calls for cost reduction.

Postponing the implementation of the expansion plan will give the company enough time to mobilize adequate resources to join the European market. However, competition is high in European.

The company is likely to lose its existing European customers to its competitors who are ready to provide excellent services. Besides, postponing the entry will deny the company the opportunity to enjoy first mover advantages such as charging a premium price for its products.

Therefore, utilizing partners is the best option for Activplant. The company should use its partners in Europe to sell its product. The partners should also provide training and software installation services. The office in London should focus on providing maintenance and support services to satisfy customers’ needs.

Utilizing partners will enable the company to avoid the costs associated with setting up a new office and hiring staff to manage operations in Europe. It will also enable the company to serve its partners’ customers, thereby increasing its revenue.

The company should invest in training programs to enhance its partners’ ability to sell its products and to provide excellent customer services. In addition, it should establish an effective incentive program to motivate its partners to increase sales.

Sales Strategy

The company’s staff and partners should be in charge of various sales activities in Europe. Single plant deals should be handled by the solution partners. This will enable the company to achieve its revenue target easily by collaborating with several vendors who have adequate knowledge about the market. In addition, using solution partners is cheaper than having full-time sales representatives in Europe.

The high cost of hiring a partnership manager is justified by the expected improvement in brand image. Specifically, the partnership manager will facilitate provision of consistent marketing messages and delivery of high quality services.

The company’s sales team in Canada should handle large deals. The rationale of this strategy is that closing large deals is likely to be a major challenge due to the financial implications to the clients. Specifically, a lot of time and effort has to be invested in convincing clients since they will be paying high prices for the large deals. The sales team in Canada has adequate product knowledge that will enable them to close large deals.

The cost of travelling to Europe is justified by the large profit margins that will be realized by closing large deals. Having full-time sales representatives in Europe is undesirable since it will expose the company to the risk of making loses if sales targets are not met.

Service Strategy

Activplant should manage the delivery of its services remotely from Canada. The company should provide solution consultancy services, whereas its partners in Europe should be responsible for project delivery.

Managing project delivery will not be feasible to the company because it is labor-intensive. Thus, outsourcing it will enable the company to provide high quality services to its clients at a low cost by contracting experienced integration partners.

Solution consultancy services should be provided by Activplant because it requires advanced product knowledge and expertise, which solution partners might not have. In this regard, the quality of execution is likely to increase if the consultancy services are provided by Activplant. Moreover, the company will benefit from improved governance and control over its operations and products in Europe.

Since sales are likely to be low in the first year, the company will not incur high travelling costs in order to provide consultancy services. Thus, managing the services remotely from Canada is likely to be cheaper than managing them in Europe.

Conclusion

Activplant should join the European market immediately through a partnership with established companies in Europe. The company should invest in training programs to improve its partners’ ability to sell its products. It should also establish an effective incentive program to motivate its partners to increase sales. Solution partners should handle single plant deals, whereas the company should be in charge of large deals.

Similarly, the integration partners should handle project delivery, whereas the company should provide solution consultancy services. These strategies will enable Activplant to reduce costs in order to achieve its revenue and profit objectives.

Works Cited

Czinkota, Michael, and I. Ronkainen. International Marketing, New York: McGraw-Hill, 2012.Print.

Kotler, Philip, and K. Keller. Marketing Management, London: Palgrave , 2011. Print.

Williams, Chuck. Management, New York: John Wiley, 2006. Print.

Click Here To Order Now!