This report is about a company named, The Olde Distillerie, which is a Scotch whisky distillery based in South West of Scotland. The company wants to do a comparative market attractiveness study of various overseas markets. They have considered four markets which are Ireland, Italy, Czech Republic and Sweden. As a market researcher, I have prepared a report which is based on three parts. Part A is based upon the study of various environments of the four countries. I have to take under consideration different factors and find data regarding these factors. In part A, all the work is research based. Table1 shows data collected from four countries. Depending on this data we have to move forward toward the second part of the report.
The second part of report is Part B which is called comparative market attractiveness analysis. Depending on the data collected in part A, I have ranked the factors according to their importance and assign them weight. The total weight is 100%. Then according to data collected we have given them scores. The scores are out of 10. 1 is ranked low and 10 are ranked high. To calculate the average, I multiply each factor score of a country by rank importance of factor and then add all the scores.
There are many reasons to give weight which is explained below in part B. According to the data collected and average weight, my choice for attractive market is Czech Republic. The Part C of the report tells us which market entry strategy is best to enter the selected market which is Czech Republic. As it is a small company and it's their first experience to enter into new market, they should go for Indirect Exporting in the form of EMC.
Depending on these questions I have to suggest a market entry strategy. I think the best strategy for a company to enter a new market is Indirect Exporting. Indirect Exporting: "The company is an indirect exporter when its products are sold in foreign markets but no special activity for this purpose is carried on within the firm. In indirect exporting the sale is like a domestic sale. In fact, with indirect exporting the company is not engaging in international marketing in any real sense. Its products are carried abroad by others and its distribution problems are similar to those in domestic sales. Although exporting this way can open up new markets without special expertise or investment, the firm's control is very limited." Tepstra and Sarathy, 7th Edition, International Marketing.
The company should adapt Indirect Exporting in the form of Export Management Companies (EMC), which is an independent firm which acts as the exclusive sales department for non competing manufacturers (agent, distributors). Reasons for Indirect Exporting: As the company size is small and the company does not have any experience at all of exporting, so I suggest that they should go for indirect exporting in form of EMC. The reasons are: The firm gets instant foreign market expertise. By selling their product to EMC, the company gets the benefit of an export department without establishing one.
Working with an EMC generally means that firm has closer cooperation and control as compared to other form of indirect exporting. Indirect exporting with EMC seems ideal for small size organizations because the firm can overcome its limitations in size and foreign market knowledge while retaining some control. Depending on the goals of the company, if they will achieve the desired results they can flourish step by step towards internationalization. But at the starting point, they should use indirect exporting because the risks factor is very low. They do not have to use so much resource. So, I think it's the best approach for the first step towards entering into new market.
CIA Facts Https://www.cia.gov/library/publications/the-world-factbook/geos/it.html European Commission's Excise Duty Tables (Alcohol Beverages), published by Europa Website (January 2006) Http://www.ias.org.uk/resources/factsheets/tax.pdf