Market

Coffee is being increasingly consumed in cafes and other commercial establishments apart from South India where coffee is readily consumed by households. The per capita consumption of coffee in India is only about 90 grams. This is considerably low when compared to other coffee exporting nations. This shows the immense potential for the domestic coffee industry to grow. Majority of Indian’s coffee production is exported. Global coffee production stood at about 7. 98 billion keg in 2011-12 (crop year). India is the 5th largest producer, accounting for only about 3-4 per cent share in total production.

On the basis of player presence in the value chain, the industry can be segmented into: (I) planters (it) planters-UCM-traders, and iii) non-integrated players From the consumption point of view, the industry can be segmented into (I) filter (it) instant coffee Filter coffee accounts for 40-45 per cent of total domestic consumption. Instant coffee accounts for around 55-60 per cent of the total domestic consumption of coffee. Indian Coffee Industry: an oligopolies competition The coffee industry in India is oligopolies with the presence of many players.

Major players include Unsafe (Nestle), Bur (HULL), Data Coffee (Data Coffee Ltd). An oligopolies competition is a situation in which a particular market is controlled by a mall group of firms. An oligopoly is much like a monopoly, in which only one company exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. Following characteristics make the Indian coffee industry oligopolies: 1. Few Sellers: Unsafe by Nestle clearly dominates the Indian coffee market.

Enjoying almost a monopoly status it accounts for almost 50% of market share. Bur accounts for approximately 49% of the market. Data Coffee is one of the largest integrated coffee producing companies in the world. It owns 19 coffee estates which are located in South India. Fig. Different Products in Market 2. Homogeneous or unique products: Unsafe and Bur, the major players in the Indian Coffee market have much in common be it their intentions or brand images perceived- young and glamorous like the beverages itself.

Both the brands have continued endearment to the youth. There is homogeneity in the kind of products they bring out for example HULL to continue on the growth path reverted to the oldest marketing mantra – straddling the pyramid. In simpler parlance, offering a product at each price point, HULL launched Bur Elite, for hose who like their coffee light. Then came Bur Exotica, a premium range of coffees for the well-heeled, well-traveled Indians who like international flavors.

And the latest addition to the portfolio is Bur Gold, a non-chicory coffee, a 100 per cent coffee, for those who like their drink strong. With Bur Elite, Exotica range and Gold, HULL has beefed up its portfolio which previous included ice and hot cappuccino and the original, Bur Green Label roast and ground further. Coming to Nestle for combating Bur elite it has Unsafe Sunrise premium, an instant Coffee- Chicory based beverage ix, then it has the Unsafe Classic its flagship product targeting at Bur gold.

Thus both of these have products catering to similar portfolios. Fig. (a) Homogeneity in Different Segments Price (Size. 50 GM) Light Coffee Unsafe Sunrise Premium RSI. 69 Bur Elite RSI. 70 Strong Coffee Unsafe Classic RSI. 106 Bur Gold Fig. (b) Homogeneity in Different Segments 3. Blockaded entry and exit: A barrier to entry is something that blocks or impedes the ability of a company (competitor) to enter an industry. A barrier to exit is something that blocks or impedes the ability of a company (competitor) to leave an industry.

The Indian Coffee industry has a blockaded entry and exit which can be understood from the facts below High setup costs: The amount of investment involved in setting up a Coffee plant is very high due to various large infrastructural requirements. Data Coffee recently had commissioned a new instant coffee plant at Then’ in Tamil Undue and the initial investment for the set up was to the tune of RSI 80 scores which is huge. Coffee industry is capital intensive. Economies of size: The need for a large volume of production and sales to reach the cost level per unit of production for profitability is barrier to entry in the Coffee Industry.

Nestles first Unsafe plant was set up in Mega (Punjab) in 1961 and the first BUR plant was set up by Hindustan Milliner in 1968 and both are economies of size. Now for any new entrant to come in and establish itself at this Juncture is a humongous task, even the Data with huge backup and established way earlier than Nestle and HULL has a market share of approximately 1 %. Established brand identity: Industries dominated by branded products are difficult to enter due to the large amount of time and money required to create a competing branded product.

Nestle, HULL and Data Coffee have created an aura around them and it is highly impossible for a new entrant to make leeway and capture market share. Investment in specialist equipment – Investments in specialized equipment that cannot readily be used in other industries tends to be an impediment to leaving the industry. As we have seen that to have an integrated Coffee manufacturing unit the investments to the tune of scores need to be made and that is definitely an impediment for an entrant who hasn’t made it big in the 4. Imperfect dissemination of information :

A lot of R in terms of technological up gradation takes place in Coffee industry in the way how the beans are extracted and processed and the companies have patented their work, this hardly provides any information for other players. Also the cost and product composition information is withheld from buyers. Producers, policy makers, roasters and even consumers are constantly faced with asymmetric information on the actions of other players within the coffee market, consumers under normal circumstances have very little access to information on market practices beyond the store shelf. 5.

Opportunity for above normal (economic) profits in long run equilibrium : Profits in the long run are determined by the barriers to entry. If there is high barriers to entry, new firms cannot enter the industry easily and hence cannot competed with existing firms for profits. Being an oligopoly, Indian Coffee industry is characterized by high barriers to entry and hence can look for above-normal profit in the long run. According to ‘India Coffee Shops / Cafe Market Forecast & Opportunities, 2017’, the cafe market in India is expected to grow threefold in the next five years to become a hopping RSI. ,600 scores ($ 1 billion) market by 2017. In India the Coffee industry is not as big as the Tea industry and for players like Nestle and HULL to achieve super normal profits and to increase consumption non- price factors like improving quality standards and communicating the same to the consumers via generic promotion campaigns and/or brand advertising needs to be done. Coffee Board and CARE Research estimate domestic coffee consumption to grow at a CARR of 6% in the opened CAGY-1 5. Fig.

Estimate of Domestic Coffee Consumption Profits in an oligopolies competition Short Run In an oligopolies market it is possible to make supernormal profit by the firms I. E. Profit over and above normal rate of return. As coffee industry is oligopolies in nature there is supernormal profits available for the players as shown in the figure below. Long Run An Oligopolies competition can turn into perfect competition in long run if large number of new players enter into the market.

In this situation there will be change in equilibrium till the point where marginal cost will be equal to the average cost such hat there will be only normal profit available for the firms. However, looking at the few major players will be there in the market. Hence they will continue to enjoy price making power and have supernormal profit. Fig. Short Run and Long Run Equilibrium Demand analysis of Coffee in India Over forecast period, retail sales of coffee are expected to witness a constant CARR of 9% in constant value terms, to reach Errs billion in 2017.

The growth of modern retail outlets and coffee chains is expected to drive coffee growth over the forecast period. Exotic flavors and premium variants of existing offerings will continue to be launched by the top players, leading to predomination of the coffee category over the forecast period. The price elasticity of demand for coffee is low, it is much lower in the short-run than in the long-run. This suggests that temporary price incentives will not achieve any significant demand increase.

Moreover, coffee demand is characterized by habit formation. Therefore, demand for coffee can be increased by non-price factors like improving quality standards and communicating the same to he consumers via generic promotion campaigns and/or brand advertising. Though 90% Indians drink Tea, we are taking to drinking Coffee in a big way, the arrival of retail Coffee outlets has changed everything and Indian’s large population means that even a small increase in coffee consumption by individuals can affect global supply and demand for the commodity.

Multinational Coffee retail outlets are thronging to India to set up their base, Lava, Barista, Struck are few of them. Conclusion We analyses data for the coffee industry from various databases (CRISIS, Capital Line), cooked at market share of major players, their cost and pricing, entry-exit barriers from which identified coffee industry as an oligopolies form of competition.

Introduction Wal-mart stores, Inc. is an American public corporation that runs a chain of large, discount department stores and it is the world’s largest corporation by revenue. It is the largest private employer in the world and the fourth largest utility or commercial employer, trailing the people’s liberation army of china, the national health service of the United Kingdom, and the Indian railways.

It has been criticized by some community groups, women’s rights groups, grassroots organizations and labor unions and the specific criticisms include the company’s extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and the alleged sexism. This company was incorporated in 1969 and it had 38 operating stores with 1,500 employees. It began trading stock as a publicly- held company and it has being growing rapidly.

As it grew rapidly into the world’s largest corporation, many critics have worried about the presence of its stores in the local communities, particularly small towns with many stores. There have been several studies on the economic impact of Wal- mart on small towns and the local businesses, jobs, and the taxpayers. It is found out that some small towns can lose almost half of their retail trade within 10 years of a Wal- mart store opening and also the shop owners who adapt to the ever- changing retail market can thrive after Wal- mart comes to their community.

These stores offer the required services and goods and release the sustainability update and also increase the availability of affordable, energy efficient products around the globe. (Blythe, 2001) These stores have got benefits that primarily help the poor; their products are cheaper, through the innovation they drive competition. Most of its benefits are based on the health, money, home and the people’s career as it has many links in the whole world. Much is being done in India regarding the major news of the Wal-mart entering India in partnership with the Indian industrialist without a foot print in retail.

A letter shows that there has been major reorganization of the retail sector in India, being considered by the agriculture and the commerce ministries with the green signal from the prime minister, under the garb of inviting investments into agriculture and propelling the second green revolution in the country. Different people in India have different perceptions about the knowledge or ignorance to the entry of American and the European major retailers into their country either directly or on the backs of a facilitating joint venture entity with the Indian non- retail players.

Retail is the big sunrise sector in India and promises major electoral battles even though the communists are busy saving the navratnas and prefer to ignore the issues of eviction of the sharecroppers from the farmlands. A great controversy is brewing in the political circles bout the entry of consumer retail Wal- mart in India. Most of the Indians accept that with this Wal- mart the advent of more competition in the market wouldmean greater choice in material, quality and prices.

The arrival of the malls and the hyper- markets have changed the scenario in a positive way where large volume buying means lower rates, quality goods guaranteed by most sellers and even the consumers with a lower budget who have the option of availing of discounts at the market place. But the pessimists have predicted that the mall culture would harm the consumer in the long run; but with the malls increasing all over the city, the consumers are spending to their hearts’ content.

The complicated issues with the foreign retailers entering the Indian markets is that it is believed that the Wal- mart drives all other competitors to the ground and then wallows in the monopolistic market it manages to create and also the allegation that the Indian money will fly abroad with the incursion of these multi- national giants into the Indian market. This is balanced by the fact that the end services provided by the Indian goods are finding a global market in the recent times. There is an ongoing debate about how high trend growth might be in India and the argument is that it depends on demographics and the productivity.

The productivity needs to rise and therefore there is need for better human capital and the acceleration of technology transfer. Therefore there is the need for the Wal- mart agreement since as is relatively known that Wal- mart shot to prominence due to the extremely effective way it leveraged it to organize logistics and so the Wal- mart is going to lead to an inflow of management and the technical know how, which will be extremely beneficial across the Indian economy as and when the practices to be introduced spread.

(Blythe, 2001) The India’s middle class sees the arrival of the world’s biggest retailer as another sign of the country’s growing economic clout and the antiglobalization activists are weighing in, saying that Wal- mart will squeeze out the India’s poverty- stricken farmers and the activists have little consideration for the economic implications.

The Wal- mart capitalizes on the economies of scale and uses the strength to drive down costs internally and gets hard bargains from suppliers, to live up to the promise of keeping prices low everyday, becoming a formidable inflation- buster which is good for consumers but if the Wal- mart deploys its legendary cost – squeezing skills in India, the activists have the fear that India’s hard- pressed farmers will go under.

(Brassington and Pettitt, 2000) The cost squeezing is the only part of a successful supermarket chain. They set quality standards, establish warehouses, and minimize spoilage, set up cold chains to ensure reliability and maintain inventory control to reduce waste. While the Indian agriculture sector is large then its distribution network is weak with a lot of its products been rotten.

The confederation of the Indian industry argues that India can be the world’s breadbasket but it has failed because most of its farms are small, inefficiently run, and also do not use the modern technology and the large players like the Wal- mart can change that once allowed to invest as they have more incentives to buy domestically and to build productivity- enhancing infrastructure. Most of the Indian farmers lack capital and therefore forced to borrow and the Indian banks have mean while reduced the rural credit to curb their exposure to the Indian farmers’ annual gamble.

Been unable to find an alternative many poor farmers continue to cultivate their land, take unsupportable loans from the rural moneylenders at high interest rates, and buy expensive seeds. If they would allow the Wal- mart the certainty of a large buyer setting quality standards and demanding new products would prompt farmers to form co-operatives or work as employees of agribusinesses, increasing their wages. Competition would also raise leading to better prices for their products and Wal- mart is viewed as a solution to this because when it enters a developing country, its farming sector modernizes rapidly ending stagnation.

As long as the government sticks to its fiscal responsibility act lower tax revenues are a good thing and if it doesn’t its even better and the great reason why there is inefficiency in the government is the lack of oversight. (Brassington and Pettitt, 2000) This is because there are not a lot of people with actual stake as to how the government spends the nation’s money. When there is a higher tax payer base, there is more stake and then the people demand more oversight, which in turn leads to better performance and the fiscal responsibility in addition to giving more funds for the government to work with for infrastructure projects.

The Wal- mart’s operation is different from the current Indian retailers, as they can completely take the entire supply chain from the field and the factory to the consumer. In India the Wal- mart is giving things a mighty push and that the long awaited agricultural revolution and the infrastructural growth can result as a side- effect of the organized retail explosion. (Brassington and Pettitt, 2000) Recommendation

India market is seen as the most productive in terms of agricultural products but the problem is it does not allow the Wal- mart to undertake its operations in it with the fear that it will practice the monopoly acts and get more benefits. From the believe of the people and the operation of the Wal- mart then it should enter the Indian markets so that it can bring in new technology that will curb the losses in the Indian produce and also assist its poor farmers in getting money. This is because with foreign investment then it becomes easier to borrow money from them and even they can give grants to assist them.

The people should allow the Wal- mart operations as it will boost their retail activities, agriculture, industry, and commercial activities which will enable the country to be the world’s supplier of its produce.

Reference: Blythe, J. (2001): Essentials of Marketing, 2nd Edn; New York, Prentice Hall Brassington, F. and Pettitt, S. (2000): Principles of Marketing, Second Edition: New York, Prentice Hall, Harlow Ziethmal, & Bitner, (2003): Services Marketing: integrating customer focus across the firm; New York, McGraw Hill.

Analysis Size Share Growth Trends and Forecast 2015 2021 By messages from the end-user industries such as bakery and confectionery among others. The future outlook for food emulsifier market shows high growth in the overall food ingredients due to an increase in the growth of bakery products. In addition, new product developments will also contribute to the growth of food emulsifier. Browse the full Food Emulsifier Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2015 – 2021 report at : http:// www. transparencymarketresearch. Com/food-emulsification. Ml Global Food emulsifier market is segmented by product into steamroll lactates, mono, did- glycerin’s & derivatives, exorbitant esters, lecithin and others. Amongst various product types, mono, did-glycerin’s & derivatives constituted the biggest market share followed by lecithin in 2014. Food emulsifiers find applications across various segments including dairy products, convenience foods, bakery & confectionery, meat products and others. Demand for mono, did-glycerin’s & derivatives and convenience is expected to remain high throughout the forecast period, owing to rise in demand or packed and convenience food.

Therefore, for mono, did-glycerin’s & derivatives is expected to dominate the food emulsifier market throughout the forecast period of 2015 to 2021. Geographically, Asia Pacific among all the regions held the largest market share of 34. 4% in 2014, followed by Europe. In 2014, Europe held a market share of 28. 6%. This trend is expected to remain same over the forecast period. The global food emulsifier market is expected to witness high growth during the forecast period, particularly due to increasing in preference of low fat food. Request a Brochure of his Report :http://www. ransparencymarketresearch. Com/sample/sample. PH? The food emulsifier market by product has been segmented into – steamroll lactates, mono, did-glycerin’s & derivatives, exorbitant esters, lecithin and others. By application the food emulsifiers market has been segmented into dairy products, convenience foods, bakery & confectionery, meat products and others. By geography the market has been segmented into North America, Europe, Asia Pacific and Rest of the World (ROW). The market revenue (USED million) have been provided for the above mentioned segments and sub- segments.

Both Asia and Europe offer immense opportunity for Wal-Mart to expand and operate in a profitable manner but offered modest opportunities in terms of market dominance. According to 2005 figures Wal-Mart had about 350 stores around Europe, mainly the United Kingdom and Germany, and 440 stores in Asia, mainly Japan and China. Both markets initially did not offer any incentive for Wal-Mart to invest as they had their own retail stores operating efficiently.

The European market was less attractive when Wal-Mart planned to start its business in the region. The European retail industry was at its prime already and taking market share away from existing players would prove to be a massive task in itself. Moreover the well-established competitors such for e. g. Metro and Makro in Germany and Carrefour in France would retaliate to any move made by Wal-Mart. They also had similar formats in terms of stores therefore that eliminated any competitive advantage that Wal-Mart might have used to its benefit.

Further, as with most newcomers, Wal-Mart’s relatively small size and lack of strong local customer relationships and market acquaintance the company would have been handicapped in the European arena. The Asian market on the other hand had huge potential but due to its geographical distance and different cultural and logistical set-ups it called for large amounts of financial and managerial resources to be displaced to enable the company to establish a presence in the region. However, regardless of these obstructions, both regions had provided wonderful opportunities for retail giants such as Wal-Mart.

With countries such as Japan, Germany, Korea, and the United Kingdom boasting commendable GDP per Capita and population figures there was no doubt that entry to these robust markets would be profitable if handled with care. Thus, Wal-Mart pursued acquisitions, partnerships and in some cases go-it-alone strategies to enter these markets. For e. g. in the United Kingdom it incorporated ADSA, Britain’s best value food chain into the Wal-Mart family thereby increasing its size and presence significantly.

It also took over the market share of smaller competitors such as Marks and Spencer’s in the children’s wear category. It joined forces with the Aldi Group in Germany and took over the management of their hypermarkets and in Japan through investing in an ailing retailer Seiyu. Seiyu was a well-established and trusted brand and had excellent store locations, thus, through the acquisition Wal-Mart established its grounds in Japan effectively. These were strategies which led Wal-Mart to attain the market dominance it strived to achieve.

Solid waste management (SWAM) vehicles are specially designed for the collection of solid waste, which includes agriculture waste; municipal solid waste such as domestic/residential waste, commercial waste and Industrial waste; or special waste such as clinical waste, sewage sludge and chemicals waste. Auto tipper, dumper placer, compactors and backhoe loaders are some of the common solid waste management vehicles used by municipal corporations in India for solid waste collection.

The market for SWAM vehicles in India Is expected to be driven by factors such as constant rise In solid waste generation due to population increase across cities, mandatory implementation of regulations pacified by the Solid Waste Management Act, 2000 by municipalities across India, and need for municipal corporations to upgrade existing fleet. According to “India Solid Waste Management Vehicles Market Forecast and Opportunities, 201 9”, the market for solid waste management vehicles in India is projected to grow at a CARR of 7. 6%, in value terms, during 2014-19.

Majority of demand for solid waste management vehicles is emanating from municipalities with total solid waste collection capacity In the range of around 500-1 ,OHO MET per day. Several municipal corporations In India do not have a proper and organized solid waste management system, which offers huge potential for growth in the SWAM vehicles market in India. Auto tippers are expected to continue dominating the market by the end of the forecast period, as these vehicles are still preferred by municipalities for door-to- door collection of solid waste.

MCristal Cristal Corporation International Marketing Executive Summary This report analyses how Cristal Corporation chose the United Kingdom as its European lauchpad for its MCristal mobile phone. MCristal phones use the Near Field Technology (NFC) to enable cashless money transaction. Cristal Corporation chose to do a Strategic Alliance with T-mobile to overcome some amount of foreign market hurdles. The company also needs to partner with large retail chains like Tesco, Aldi, and with the airline companies etc. to invest in NFC interface machines.

The report also analyses the company’s marketing mix of product, price, promotion and place. Table of Content Introduction In today’s world of highly paced environment with a constant need to be in the frontline of technological advances, owing the newest mobile phones with the latest features is a must have that people line up for hours to get. The product that I am going to introduce is currently focused and available in Japan with European countries and USA trying hard to replicate the same success in their own countries.

The name of the product is the M-Pay enabled Cristal mobile phones, simply called MCristal. The product, although based on the use of real technology, is fictional. M-Pay uses the Near Field Communication (NFC) technology. The NFC works with short range frequency that gives a signal from, in this case, the customers mobile phone to another terminal (3). With this technology, via M-Pay, one can pay for goods and services cashlessly, by MCristal. The mobile phone will have a chip inserted in it that will store debit card, credit card information and/or prepaid voucher card on it.

It will have a ? 200 pounds per transaction limit. You could use the mobile phone to pay for wide range of purposes from paying for groceries to paying for a plane ticket. All one will have to do is, touch the mobile phone on the cash-less payment point, insert a four digit personal pin number on the mobile phone to approve and complete the transaction. (2) The idea behind the creation of the MCristal is that there is a higher chance of leaving your wallet behind than your cell phone. This product from the fictional Japanese technology giant: Cristal Corporation.

This company, founded in the 1979 has grown rapidly into one of the forerunners of technology in the 21st century. Not only has it invented technology to ease the everyday life of individuals but it also uses new technology to create new software and new products. Its cell phone range, with its latest features, rival that of Sharp and Panasonic in Japan. It now wants to introduce its range of MCristal phones in the European Market. This report will analyse which country Cristal Corporation should focus on launching its phones, how it should enter the market and how it should handle its marketing mix.

Country Selection {draw:frame} {draw:rect} Stage One: All countries Since the company Cristal Corporation wants to introduce its MCristal phone in Europe, we start with a list of all the 27 member states of the European Union. Out of these countries, we will narrow it down to those countries that have a mobile cell subscription of more than 10,000,000, whose per capita income is more than $30,000 a year and whose urban population is more than 5,000,000. Stage Two: Priliminary screening: Macro Analysis

After narrowing it down, we are left with 8 countries: France, Germany, Greece, Italy, Netherland, Spain, Sweden, United Kingdom (Appendix). At this stage, we should do a preliminary screening taking into account the macro criteria of social, legal, political, economic, technological and environmental influences on the outcome. Below is the ideal pestle for the ideal country. Ideal Pestle for the Ideal country Social: The country that we are focusing on should have a high materialistic culture where individuals attach values to products and where people are perceived to have a higher status due to the products they own.

The country should also have a large demographic in the range of 16-60. Legal: While looking into the legal aspect of the country, we should look into the various local domestic, international and home domestic laws. Domestic laws: Since the company is trying to penetrate a new country and also going for a strategic alliance with another company, there may exist potential legal problems. The potential country thus shouldn’t have high level of bureaucratism and red tapism as we would want to move in efficiently and with the least time wasted.

Also, the local laws shouldn’t ban or discourage new entrants into their country thus overprotecting their own telecommunication industry and the local companies in that industry. International Laws: Since the company wants to penetrate into the European market, it will have to follow the norms and laws set aside by the European Union and will have to abide by any quotas or restrictions imposed. Besides quantity laws, it will have to follow the quality laws as well.

Home Country laws: Besides these two, the company will have to also follow laws set by it’s home country. There may be cases where the home country may ban the company from entering a country due to the instability of the said European country. Other than that, the home country will also have its own quality standards, allowed export quantity, price allocation etc. which will have to be followed by the company. Political: The company should focus on those countries that have had a stable government continuously over the years.

The company also requires the country to be a democratic country, leaning more towards capitalism than socialism. Economic: The country that the company should focus on should have a high GDP (of over $30,000). This is necessary in order for the individuals to pay for the MCristal Phone. Technological: The country should use a high level of technological advanced/innovated products in its daily life. Environmental influences: The target country should be a developed country with a high level of infrastructural facility. Majority of the population should live in urban areas.

As this company needs to work with various different types businesses ranging from grocery stores to transportation companies and to develop cashless transaction points, there is a need for high infrastructure availability in the country. Taking these factors into consideration, we preliminary screen the countries using the Risk analysis table below. 1=Low; 2=Some/Little; 3=Medium; 4= Risky; 5=Very Risky Stage 3: Weighted Environment Criteria After elimination in stage two, we are left with France, Germany, Italy, Netherland, Sweden and the United Kingdom.

In this stage, we now assign weights to certain environmental criteria. The Criteria that we have chosen are a) Advancement in Telecommunication b) Market share of the top mobile service provider. Advancement in telecommunication is important as, being a new product and using a new technology, to implement that into a new country there should exist already established norms and standards in telecommunication. The company will have to collaborate with (at least at the beginning) with one service provider. Thus, there is a need for the top network service provider in the country to have a large market share. ,2,3,4,6 = Ranks 1,2,3,4,5,6= Ranks Stage 4: Final Selection Criteria From the previous stage, we are left with France, Italy and the United Kingdom. We have eliminated Germany, Netherland and Sweden because although the country may be good at a certain factor, it was found to be lacking at the other factor and for this company to be successfully established in a country, there needs to be a balance between the two factors. In this stage, we shall eliminate based on the demand for high technology mobile phones. Thus, the ranked preference of the country to enter is:

United Kingdom France Market Entry Mode As the company needs to partner with a mobile network service provider, it will consider those entry modes which offer an affiliation with another company. Thus, we have identified three possible modes of entry. These are Joint Venture, Strategic Alliance, and Merger and Acquisition. The chart below shows the criteria of judgement for these three modes of entry. 1,2,3 are the ranks From the above table, we can see that there exists a tie between Joint Venture and Strategic Alliance. The company will choose the Strategic alliance.

The biggest mobile network provider for the United Kingdom is T-mobile (4) with total number of subscribers more than 32 million. A strategic alliance between Cristal Corporation and T-mobile will open up the existing customer base of T-mobile for Cristal Corporation’s advantage. Marketing Mix Product: The M-Pay enabled Cristal Phone is the first of its kind in the United Kingdom. This product provides a platform for mobile payment facility for various entities like at grocery stores, for airline tickets, train tickets etc.

At a later stage, the technology may be adapted to remove the necessity of even buying tickets etc. Product Adaptation: The mobile phone and the M-Pay device will be in English language and not in Japanese so that the customers can use the product efficiently. Assessing Product suitability: Competive advantage: Since the product doesn’t have any competitors at present, it will gain monopolistic advantage. Market Acceptance: The product combines already available technology in a new form. United Kingdom, being high on the materialist factor, will at least give the product a try.

Also, since it is high the materialistic factor, individuals have the want to own the newest technology products like the MCristal phone. Profit Potential: The sale of the phone plus the 1% commission charged on using the M-Payment will be the main profit making avenue for the product. Further investment: The company needs to invest in NCF interfaces for major chains of supermarkets, airlines, train etc. There is a possibility of sharing the cost of installing the NCF interfaces with the other companies as it is for the benefit of both. Managing International Products:

Packaging: The MCristal Phone will come in a white box with blue borders. In the middle, there will be plastic see-through covering through which you can see the cell phone inside. The packaging will have the Cristal Corporation logo on the top left hand corner with the words MCristal under it. On the back of the box, specifications of the product will be mentioned. On all four sides of the box, the name of the product, the version of the product will be mentioned in black. The material used will be 100% recyclable cardboard which will be glossed over to give a shine.

The separators inside the box will be made of 100% recyclable plastic too. Image, branding and positioning The image of a brand or product is different from one country, one group, one segment to the other. The following discusses the image of the M-Pay Cristal phone. Country of origin effects Since the country of origin is Japan, which is considered as a highly techonogized country in the world, the perception of the product is favourable. Moreover, a lot of new technology comes from Japan and is introduced to the rest of the world. Thus, even the stereotypical outlook of Japan is favourable for Cristal Corporation.

Product Image: The product, being a cell phone with the latest in technology i. e. the M-Pay facility, using the NCF technology will have a good product image. Company Image: The company, a pioneer of different technologies has a sound company image the world over. Thus, any new product introduced by it will have a good image. Brand Category: The product is a mixture of an attribute brand and an aspirational brand. Attribute brand: Not only will the product set itself aside from other mobile phones, it will also create a platform for the company to release its line of mobile phones in UK.

This particular product is centred mainly around the M-Payment facility. Aspirational Brand: Since this is a new concept there is a positive, even a curious image created in the minds of the people. The product is a status product. Owning the product will create or make people be perceived as a part of a different, higher social status. Place: The product is manufactured in Cristal Corporation manufacturing factory, Beijing Wang Mobile Communications, in Beijing, China. This factory is responsible for the design, sourcing, research and development of the Cristal mobile phones.

Once manufactured, the product will be flown to London where it will be stored at one of Cristal Corporations intermediary’s’ units. Here, the product will be sorted into different groups depending on where in the UK it is being sent. Besides London, the product will be flown to Birmingham, Leeds, Glasgow, Sheffield, Bradford, Liverpool, Edinburgh and Manchester. Thus, it is important for the company to attain an intermediary who has storage units in these cities. From the city intermediary’s storage unit, the product will be distributed to the T-mobile stores and to the stores that sell T-mobile network facilities.

Promotion: The target audience of the product are those individuals who are between the age of 18 and 60. This segment represents the active wage earning segment and thus will be able to afford the mobile phone. These people lead a university or a working lifestyle and thus will be the ones who purchase grocery, airline tickets etc. the most. The main objective of the Cristal Campaign will be to identify new customers, further increase the value of the brand image and to help establish the product. The media strategy to be used should be a combination of advertisement, sales promotion, sponsorship and public relation.

The advertisement should be youth oriented, showing the ease of payment through the MCristal. International celebrities that have a major appeal to the youth and the older part of the market segment should be contracted. A celebrity like Penelope Cruz would fit the bill here. T-mobile and Cristal Corporation could introduce a special price or a special promotion where for example, the first 1000 purchasers will get 1000 texts free and 1000 minutes free. T-mobile and Cristal Corporation can also sponsor charitable events like for Breast Cancer research etc. o that a social responsive side is developed for the brand. It should also sponsor events like football matches so that their name and logo is well displayed, attracting attention from individuals. Pricing Strategy: The MCristal will be introduced under two different price ranges: If the customer is out rightly buying the handset and using the T-mobile pay as you go network service, the price of MCristal will be for ? 185. Although there aren’t any real competitors in this field as yet, the high end mobile phone companies can be considered as a competition.

The Blackberry Bold 9750 costs ? 35 pounds a month and the Sony Ericsson Statio costs ? 30 a month. The Nokia 5800 costs ? 195 to buy outrightly. Thus we see that the MCristal is in the same price range as the latest T-mobile phones. Recommendation and conclusion Although penetrating the market with this type of a new technology may be a challenge, it being time consuming with large initial investment in NCF interface machines, in the long run, the potential profits to be reaped from this are too high to be ignored.

This technological innovative product could majorly replace the use of cash in the day to day life of individuals. However, since the technology isn’t patented to Cristal Corporation, it may be easy for other companies to replicate the work of MCristal thus reducing the monopolistic advantage that it had in the beginning. Thus, the company should create advantages wherever it sees them from the beginning of its entry into the United Kingdom.

Introduction

For human being, trade has been a way of survival. People of the ancient past has been trading to fulfil their daily needs and wants. In those times however, people would have to barter to trade their belongings to what they need or want. Today, there are various means of trading, cash trading (using money) or credit trading (using various forms of letters of understanding). Further, the development of human’s needs and wants has brought human beings into the globalization age, where trade is no longer restricted by national or regional boundaries.

 In the age of international trading, another issue appears. International finance has been a very popular economic science nowadays. This is due to the fact that foreign trade has been growing tremendously in significance. People has been searching means to create comfortable trade between people of different nationalities. This is the simple origin of the foreign exchange (forex) market. Today, people trade in foreign markets just as common as they would trade on traditional markets. In the light of this development, I believe that the discussion on forex and its history is an interesting subject. Furthermore, in this paper, we are discussing on the issue of weakening US Dollar against several other powerful currencies.

History of Foreign Exchange

Definition and Size of Market

 In definition, the forex market is a place where people can trade one currency into another. The market is in fact the largest market compane to any other kind of markets around the globe today. Compare to the trading volume of the US treasury bond, which is only $ 300 billion a day, the forex out-trade the US tresury bond trading by having a daily circulation of $ 1,8 trillion.

 Preceeding International Agreements

Gold Exchange Standard

 The forex market was originated in 1971 when people begin to recognize the benefits of floating echange. Prior to the date the were several other rules that was set to manage international trade. The first international rule for managing international trade was actually the gold exchange standard. The standartd was placed in attempt to prevent kings and rulers from making more money that they should be  and create uncontrollable inflation. The first rule was the gold exchange standard. Under the gold exchange standard, each currency must be backed by  gold (Millman, 2005).

Like we would most likely presumed, the first rule would have considerable problems within it. Under th gold exchange standard there is a dangerous opportunity for an economy to import more goods than it can manage, which lead to depleted gold reserves. Applying the gold exchange standard, the country would have to reduce its money supply and as a result, the economic activity within the country would be forced to slow down and a recession would be created (Millman, 2005).

 As a balancing action however, the recession would then lead to price-drops all over the nation and the country would suddenly be more attractive as destination of foreign investment. This will lead gold back into the country and the prices of goods would rise back into their original state. The system would seem to be flawless, but as the First World War strucked the globe, people realized that they cannot depend on gold to manage international economy. This is true because the flow of gold is dangerously easy to disrupt.

Bretton Woods Agrement

Afterwards, the controlling set of rules is called the Bretton Woods Agreement.  Under the Bretton Woods agreement, intenational trade was focused on a single purpose, which is to promote stability in international trade by preventing speculation in the currency markets and preventing money from uncontrollably circulated around the country. In order to meet this purposes, the agrement fixed all national currencies against dollar under the rate of $35  perounce of gold. In light fo this agrement, all nations agreed to maintain the value of their currencies againts the US dollar.  Countries were not allowed to improve their trade positions by devaluating their currency by more then 10%. Again, the international understanding was disrupted by war. The Second World War devastate economis all over the world, and afterwards, the nations are urging to rebuild their countries. This lead to rapid movement of capital whcih is not supported by the Bretton Woods Agreement (Millman, 2005).

Forex

In 1971, the forex market with the floating exchange system come about and replace the rules of Bretton Woods. Shortly after the introduction of the forex market, countrues change their currency systems into the free floating arrangement, where prices are mainly controlled by the forces of supply and demand.

Effects of Forex Introduction

The introduction of forexbrought significant changes in international economy. Since the introduction of the forex market, new financial tools and instruments were created. Examples of the most utilized forex instruments are forward contracts, futures contracts, options, etc. The good-trading markets also experience considerable changes due to the forex. They became more open and deregulated in nature. Further, a new group of people came to power along with the introduction of forex. These people were the speculators and money traders (Millman, 2005).

Technological Advancement and the Forex

As mentioned in the introduction chapter, in the age of globalization, people trade in forex market just as common as they would trade in traditional markets. The powerful catalyst of the phanomenon is technology and innovation. With the presence of the internat and on-line market trading, movement of money across border became very easily managed. Small traders, large traders and financial institutions are all using tehnological advancement to tune-into the market in daily manner. Thus, millions of dollars worth of foreign exchange transaction began to took place in matters of hours and even minutes. Electronic brokers, among other things that grows from the forex, has been significant catalisators to the growth and development of the forex.

From Buying to Speculating

Another significant change created by the forex is the fact that most people has shifted their purpose when they are engaging in the forex market. If the original purpose of trading the forex is to obtain the necessary currency to perform cross-border transactions, today, the most popular purpose of entering the forex market is to speculate. Speculation is the activity to buy and sell foreign currencies in order to gain profit from the money transaction. If in the earlier days of forex, speculators are only minor traders with minor proportion of the circulation, today, the speculators could well be affecting the course of international businesses.

There are significant concerns regarding the shifted purpose of the activity. First, as suggested by the Bretton Woods Agreement, the activity of making money out of money is dangerous for international business. The concern was based on the fact that making profit out of money trading is like creating money from no actual trade of products or services. In other words, some considers that speculators are stealing profit from the system which is only intended to support international trade of real products and services. Furthermore, there are cases where speculators could be so powerful that their actions are suspected to be the catalyst of economic recession for an entire region of developing countries (the Asian economic recession). Today however, this view is largely abandoned by most financial observers. With the presence of several new rules in the forex, speculators are considered a natural part of the system.

US Dollar on Forex

Dollars Against the Euro, Pound Sterling and Yen in 2006

 In the forex market, one can easily disover the value of a single currency compare to others. Generally, the US dollar has been considered the most influential currency of the world. However, recent developments indicated that the currency also hsa its ups and downs. During 2006 of example, reports indicated that the dollar has performed rather poorly againts most of the European currencies. According to Market Watch, as a summary of 2006, dollar has dropped 11.5% versus the Euro. Analyst indicated that among other causes, this is caused by the unlikely prospect of Federal Reserve cutting interest rates to enhance growth considering the the interest rates in Europe continued to be higher. Against the Pound Sterling, the US dollar has also weakened in 2006 by 13.6%. Versus the Swiss Franc, the 2006 history indicated that the currency weakened 7.3%.  Some of the reason of Euro’s triumph over tyhe US dollar omn 2006 is the enhancement of the Euro due to the stronger growth of money supply in the Eurozone (Weakening, 2006).

Despite the weak performance against European currencies, the US dollar display increasing value compare to Yen. Yen is considered the weakest among several international currencies in the course of 2006. The US dollar was rising about 1.3% against Yen for 2006. The Yen was weakened 12.6% agaunst the Euro and 14.9% against the Pound Sterling. Many considered that this is caused by the end of the zero interest policy applied by Japanese policymakers for six of the last years. The future of Yen is uncertain, said several analysts of Marketwatch. This si caused by the BoJ maintaining their steady position in the face of Yean weakening again. Another cause of the Yen’s poor performance during 2006 is the slowing down of Japanese purchasing index in December, which is considered the lowest in 21 months (Zhou, 2005).

There are several issues that were involved in the weakening of US dollar against other amjor currencies. One is the issue of US dollar sell-off due to increasing interest in becoming overseas investors. Another cause is the presence of large imbalance of trade with China. The currency also burdened with local issues like the slowing down of domestic housing market. Other concerns that are suspected to weakened the value of dollar are actually long-time concerns like inflation, lower home prices, adverse tax changes and high ebergy costs. More than others however, the main cause of weakening US dollar against European currencies is because economic growth is some European countries enhanced notably during 2006 (Zhou, 2006).

The weakening dollar position against European currencies has actually been rather a surprise for several observers because the review of forex taken in November 2005 stated that the dollar reached a high position with respect to Euro and yen. At the moment the position was predicted to last for some time because overseas investors favored US businesses. The prediction was proven to be false. Since then, the value of dollar has been decreasing due to several factors, which are: global imbalances concerns revealed by the group of seven, US trade deficits. The positive aspect of this decline is that it will cause foreign investors to be more attracted to invest globally. Furthermore, a weaker dollar will result foreign currency returns to worth more than it usually is (‘Dollar weakens’, 2006).

Prospects of Dollar on 2007

Analysts stated that there is considerable room for more decrease in 2007 for the US dollar.Another analysis indicated that the trend will still contonue throughout 2007, because there is considerable expectations that the European Central Bank will continuingly enhance interest rates.  However, analysts also stated that the enhancement of US economy will provide some room for dollar enhancements before it falls again. Analysts also argued that the US economy has more strength that people generally took credit for. Low unemployment and robust economic growh are some indicators that supports the positive sentiments toward the US dollar in the future (Zhou, 2006).

Bibliography

1. ‘Dollars Weakens, in 2006’. 2006. ICMA RC. Retrieved February 2. 2007 from http://www.icmarc.org/xp/rc/marketview/chart/2006/20060512dollarweakens2006.html
2. Millman, Gregory J. 2005. ‘ Around the World on a Trillion Dollars a Day’. New York: Bantam Press.
3. ‘Weakening US Dollar Against Euro’. 2006. Reteieved February 2, 2007 fromhttp://www.speciousargument.com/blog/archives/2006/11/weakening_us_dollar_falls_against_euro.php
4. Zhou. Wanfeng. 2006. ‘Dollar higher; sterling dives to 2-week lows’. Marketwatch. Retrieved February 2 2007 from http://www.marketwatch.com/news/story/story.aspx?guid={A3E635F6-3F22-4134-9F11-86E538557577};dist=rss
5. Zhou, Wanfeng. 2005. ‘Dollar Loses 11% vs Euro in 2006 in Rate Differential. MarketWatch. Retrieved February 2 2007. from http://www.marketwatch.com/news/story/dollar-loses-11-vs-euro/story.aspx?guid={0B752618-C0C6-4AB2-9C93-FB03CF1F38F0}&tool=1&dist=bigcharts&