The slides endeavor to internationalize a very lucrative Pakistani organization towards Bangladesh. It comprises of all the steps which an organization must go through on its way towards internationalization from a developing nation like Pakistan.
2. • Shahnawaz Limited
• First to introduce Mercedes Benz in Pakistan
• Wide Range of Products and Services
• Niche Marketing
• Diversified Brands
• Lucrative Organization in Pakistan
3. Dressta Bulldozer Mercedes-Benz
Passenger Car
Sales
Socomec UPS -
Sales & After
Sales
Aftersales Service
& Customer
Support
Dell Computers Mercedes-Benz
Commercial
Vehicles
Escan Security Panorama Van
Sales
4.
5.
6.
7.
8.
9.
10.
11. • Hankering towards foreign brands
• Rising prices of automotive
• Rising industrial trends
12. • The Board of Investment
• The Board has launched an investment promotion drive at home and abroad to attract
investors
• Open Door Policy' to attract foreign investment
• On the verge of a significant breakthrough
13. • Stability of the government
• Fair- Trade Laws
• Anti- Trust Laws
• Tax Laws
• Minimum Wage Legislation
25. • Diversified products
• Skilled staff
• Niche marketing
• Official distributers
• Large core competencies
S
Expensive Products
Lack of experience of foreign
markets
W
• More diversification
• Internationalization
O
• Increasing competition
• Deviation from their main product.
T
SWOT Analysis
26. Area of Opportunity
• Base core competencies to increase
footholds across the borders.
• Use skilled staff to diversify more
1
Area of missed opportunity
• Expensive products prevents
further diversification
• Lack of foreign experience thwart
to enter foreign markets
2
Area of Work
Their diversified products are negated
by large influx of undue competition in
domestic and international market.
3
Area of Concern
Lack of experience of
internationization is more
deteriorated by increasing
competition.
4
36. • To perform consistently when it comes to their business performance quality.
• Need to fortify their infrastructure in the foreign country
• They need to train their employees so as to better coordinate with the customers
• To take their customers on board in order to administer constant feedback
• To maintain performance standards to keep track their on going performance
• Focus on the customer rather than focusing to raise
Editor's Notes
Hankering towards foreign brands:
Nowadays, in Bangladesh, people are obsessed by buying new cars and other vehicles as a way to show their self-actualization stage, one of the stages in Maslow hierarchy of need. They usually drool over foreign brands, which is innate in Bangladeshi community.
Rising prices of automotive:
In Bangladesh, prices of cars have been increasing with an astonishing rate. Hence, it is vital opportunity for a business like Shahnawaz to make the most of such loophole.
Rising industrial trends:
New industries have been developing in Bangladesh, which calls for a lot of competitive strategies in order to rise above the rest of the competitors. New industries cause new firms or organizations to seek opportunities in Bangladesh.
Policy for foreign investment
The country's drive for foreign investment is being spearheaded by the Board of Investment, which was created to facilitate the setting up of manufacturing and other industries in the private sector, both local and foreign. It is a promotional organization dedicated towards providing investment assistance to all investors.
The Board is headed by the country's Prime Minister and it includes Ministers and Secretaries from the concerned ministries as well as representatives from the private sector.
The Board has launched an investment promotion drive at home and abroad to attract investors. The BOI has been assisting in the implementation of new projects as well as providing services.
In order to stimulate rapid economic growth of the country, particularly through industrialization, the government has adopted an 'Open Door Policy' to attract foreign investment to Bangladesh. The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones.
Bangladesh is on the verge of a significant breakthrough in terms both of international investor confidence and significant inflow of new investment funds
Political factors:
As far as Bangladesh is concerned, their Government has been pursuing consistent policies so as to espouse business ventures in their country. However, following are the political factors that directly or indirectly have influence over the business.
Stability of the government:
In Bangladesh the Government is widely stable and it provides the local or international businesses to have better environment to embark upon their business ventures in Bangladesh.
Fair- Trade Laws:
Bangladesh provides fair-trade laws for businesses to stay afloat for the long run. However, trade laws elucidate almost all the accepted behaviors which need to be shown by the local or international businesses.
Anti- Trust Laws:
Anti-trust laws provide the businesses the platform to build trust or harmony among them. However if any party attempt to break the trust of any other party, he would be penalized all the way.
Tax Laws:
Such laws of Bangladesh helps the companies to get onto the exact charges they need to pay to acquit themselves from tax liability.
Minimum Wage Legislation
It is promulgated in Bangladesh for a very long time in order to foster equal distribution of wealth among the natives.
See swot in the project
See swot in the project
Porter's Five Forces Industry Analysis:
The Porter models involves scanning the environment for threats from competitors and identifying problems early on in order to minimize threats imposed by competitors.
However, Shahnawaz competitive forces can never be subsided because he has been competing with strong brands in different product categories. Let’s discuss each competitive force one by one:
The threat of new entrant:
Recently, Panorama Van has been introduced in the market. Although, its competing with Shahnawaz only in one category, but it may pose serious in the near future owing to its extensive marketing strategies.
However, new entrants affect the company’s profits as the consumers have more variety to choose from.
Bargaining power of buyers:
The companies influence on the buyer to purchase their product or how much the buyer depends on the product being produced by the firm.
Shahnawaz constant innovation might be helpful to rise above against the rivalry.
Threat of substitute product of services:
More than one firm producing similar or the same product or service. So, there are many substitute of Shahnawaz.
Bargaining powers of suppliers:
The company dependence on the resources the suppliers provide, in order to create their product or services. Shahnawaz is in compliance with its suppliers in every area of its operation. Shahnawaz also provides information to current Shahnawaz suppliers who want to enhance their understanding and connectivity with Shahnawaz. The strategic cooperation of Shahnawaz with its suppliers has enabled the company to reduce inventory and logistics cost, enhance the quality of materials being supplied and reduce defect rates.
PESTEL analysis:
Let’s describe each factor while taking into account Bangladeshi context:
PESTEL analysis:
However, let’s make the PEST Analysis of Shahnawaz:
Political Factors:
Being a certified company within Bangladesh, one has been strongly afflicted by the direct taxations policies of Bangladesh. To elaborate further, Bangladesh’s tax collection system is quite lob-sided: Corporate sectors are being levied higher taxes by the Government, whereas Agriculture Sector has been totally neglected with respect to tax collection.
Economic changes and political unrest may result in business interruption, iShahnawazation, deflation or decreased demand for Shahnawaz products. The success will depend in part on the company's ability to manage continued global political and/or economic uncertainty, especially in significant geographical markets, as well as any political or economic disruption due to terrorist and other hostile activities.
Trade regulations:
Trade regulations might benefit Shahnawaz or might afflict them badly: trade regulations hinder new entrants to join the competition. Whereas, it may circumscribe Shahnawaz operations, if imposed strictly – it can go both ways!
Governmental Stability:
Since the inception of Bangladesh, Leadership has always been in transition. However, by referring from history, it might be serious problem for a company like Shahnawaz to operate successfully.
If the government is not stable in any country, it may cause chaos in country’s fixed policies. Large corporations have been suffering huge losses, owing to changing in policies, without even adequate consideration.
Economic Factors:
Inflation Rate could be a very important aspect to describe the economic factors that may affect Shahnawaz. Bangladesh year-on-year inflation rises by 7.7%, which could be a serious threat for a corporation like Shahnawaz.
Owing to Inflation in Bangladesh, Shahnawaz has been collecting raw materials at higher prices because they want epitome supply to maintain their quality for longer run.
Economic changes activity and political unrest may result in business interruption, inflation, deflation or decreased demand for Shahnawaz products. The success will depend in part on the company's ability to manage continued global political and/or economic uncertainty, especially in significant geographical markets, as well as any political or economic disruption due to terrorist and other hostile activities.
Bangladesh is in recession at the moment. So, it’s very difficult for any corporation to reap higher profits.
Socio-cultural Factors:
It involves age distribution, education levels, income level, consumerism, diet & nutrition, population growth, life expectancies, Religion, Social class, expectation of society from the business. Marketers divide the population into six age groups:
preschool children
school age children
Teens
Young adults age 20 to 40
Middle-aged adults 40 to 65
Older adults 65 and more..
Education Levels:
Education levels can be a factor which can affect the company externally. Obviously, if one wants to sell his brand, he has to consider the educational level of people in order to tailor the marketing accordingly.
Shahnawaz has been conducting formulated marketing by understanding the mental filters of their target market.
Consumerism:
Consumerism may also impact the company’s progress. Shahnawaz has been tracking the burn rate of their consumer and business markets in order to maintain supply in accordance with supply.
Religion:
In Bangladesh, Islam is the most prominent religion. Therefore, Shahnawaz is keeping track to only sell legitimate prices in Bangladesh. To do so, they refrain from adding interest charges, which are prohibited in Islam.
Income level:
Prices are set by Shahnawaz through analyzing the income level of people.
Technological factors
Rapid advancement in technology calls for all organization to keep their fingers on the pulse. Similarly, Shahnawaz has been responding to such factor by improving their quality in different ways.
The innovation and making of new products is a proof that Shahnawaz is equipped with latest technology and committed employees that has enabled it to earn a good reputation in the global market.
Through internet, they are conducting their market research in order to trump down their competitors.
E-Commerce gives benefit to online customers, who create an access through technology
Social Media
Shahnawaz has its own page on twitter, Facebook etc. just for the sake of their markets. People share their responses, experiences, suggestions as to the brand.
Environmental Factors:
It calls for the activities of an organization to keep the environment clean. Although, Shahnawaz haven’t conducted any special activity to keep clean environment, but they, being a loyal company, dump its waste in a very careful way.
Energy Consumption:
Bangladesh has been dealing with large energy crises. Consequently, energy crisis may significantly affect the production and other various processes of Shahnawaz.
Frequent power outages tend to increase Shahnawaz consumption over other ways to generate electricity, which would be expensive.
(Monitoring pollution can be a way to please the environment. Therefore, Shahnawaz has shown a picture in its almost every down market product to make people bin their packaging material after usage properly.)
Marketing plan:
It refers the plan through which we fascinate our target market; it is very much important for an organization like Shahnawaz to develop a plan so as to reduce the risk of losing customers.
The challenge:
The products that we’ll sell in Bangladeshi market are as follows along with smart goals.
Mercedes Benz:
Selling of Mercedes is the main product, which will be sold alongside with aftersales services and all other captive products.
Goal:
The goal of selling this product in Bangladesh would be challenging owing to a large number of existing sellers but after selling services provided by Shahnawaz could whet the appetite and bait the customer to buy the same via Shahnawaz
IT products:
All IT products like UPS, Dell Computers etc, which are the output of diversification in Shahnawaz, could be executed in Bangladesh as well.
Goal:
The goal is to seek the opportunity for IT product needs, and then live up to people needs by catering quality services.
Electronic Machinery:
They have been selling large bulldozers, cranes etc in Shahnawaz; hence, they can sell the same in Bangladesh as well.
Goal:
The goal is to provide quality electronic machinery in order to reap higher profits.
Skimming or Creaming Pricing Strategy:
This type of strategy refers that the organization should sell their products at expensive rates with the intention to negate high sales but to gain a high profit. However, as far as Shahnawaz is concerned, it is obvious that their products would be expensive on account of their premium quality brands.
Absorption pricing:
It is the method of pricing in which all costs are recovered. The price of the product includes the variable cost of each item plus a proportionate amount of the fixed costs and is a form of cost-plus pricing.
High-Low Pricing:
Shahnawaz Limited should also execute High-Low Pricing in Bangladesh on account of their expensive products in the market. In such type of pricing technique, the seller could sell the product costly and then via promotions or advertising coupons etc reduce the price of the product so as to drag the customer to the company’s door.
Market-Oriented Pricing:
This type of pricing technique helps the Shahnawaz company to foster their sales by being market-oriented via market analysis and research. such type of technique calls for a lot of homework before entering into the market.
Premium Decoy Pricing:
It is the method of pricing where Shahnawaz artificially sets one product price high, in order to boost sales of a lower priced product.
However, they should adopt following strategies of advertising in Pakistan.
Social Media:
After the inception of their tenure in Bangladesh, they need to fortify their brand image in Bangladesh in order to hammer home their domestic stance of selling quality products. Social media could be a very important source for the purpose of advertising the product in the market.
Facebook, Twitter, Linkedin, OLX etc, could be significant to promote the product in the foreign environment.
Contests:
In Bangladesh, people are obsessed of winning prices and competing with someone in games or any sports. However, it is viable opportunity for Shahnawaz to make the most of such opportunity and develop a way to promote their brands by organizing as much events as they can.
Mail Order Marketing:
It is a kind of promoting one’s product in which the seller like Shahnawaz should not overlook a customer or any visitor who wishes to know about Shahnawaz or any other organization. Whenever a person, especially a researcher or student, wants to inquire about the company Shahnawaz sales person or employees ought to be hospitable and welcoming. Also, they should give the visitor special souvenirs or gifts to make his or her visit memorable.
Causes and Charity:
Being an expensive organization, they need to be philanthropist as well by being generous in dealing with causes and charities. It is also viable for Shahnawaz to play their role in different causes and charities.
TV or Radio advertisement:
They should also budget considerable funds to hammer home their existence in Bangladeshi market. Television advertisement or Radio Advertisement are importe sources through which they can advertise their brand more effectively.