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Global Marketing Strategy

Introduction

The “XYZ Mobile Telecommunications Company” is a well-renowned business to consumer (B2C) company in the United Kingdom for its premium and high-quality products. The company has also been admired by competitors for its NPD skills and innovativeness. However, due to its success, the firm is now ready to expand further in abroad into new markets. As a result of which, this UK-based “Mobile Telecommunications” company has decided to enter the USA market and launch a range of products in the chosen country.

The document aims at assessing the market of USA to draw conclusions from it, regarding its attractiveness by using appropriate market frameworks and tools. It further analyses the market for determining the key product features or types of product that hold the huge market potential. It then evaluates the target market and the product positioning and outlines the distribution strategies. The paper also recommends some communication strategies suitable for the firm in the chosen country and the pricing strategies that it may set. The paper then concludes by recommending a well-supported market entry strategy.

 

Chapters

1. Potential Market Assessment

Global Marketing Strategy To study the macro and micro impacts on a sector, external and internal factors need to be considered. For this reason, the businesses use various tools for planning to study their impacts. The tool that can be used for the micro and macro environment is PESTLE analysis. The microenvironment consists of the environment that influences a business. This encompasses regulatory or government bodies. While, the macro environment consists of those factors that are outside the control of a company, i.e., PESTLE factors.

In order to critically evaluate USA’s market potential, the micro and macro environmental factors will be used. For studying the market/country attractiveness, competitive strength and consumer behaviour, PESTLE analysis will be used. This framework will analyse factors like political, social, economic, legal, technological, and environmental. This is the preliminary screening in which different political, economic, social factors etc. will be identified.Global Marketing Strategy.

PESTLE Analysis

Political

Global Marketing Strategy There are political risks in the mobile telecommunication industry that are pressurising this telecom sector (Abushova, Burova, and Suloeva, 2016). The governments across the world have initiated a measure for controlling and monitoring communications motivated by security and political reasons. Those measures have become tougher in the outcomes of terrorist attacks on the United States and attempts of hacking on the databases of U.S government. Moreover, all of these factors display that the political risks will sustain (Atsu et al., 2014). Moreover, there is also a political risk that the US is faced with that is trade barriers. There is a huge list of nations, which have maintained trade barrier against US mobile telecom firms such as Canada, China, Costa Rica, Egypt, Argentina, Thailand, Uganda, Vietnam, and Uruguay etc (Cooper, 2014).

Therefore, it can be concluded that if XYZ UK-based Company enters USA mobile telecom market, then, it will face a lot of political risks.

Economic

Global Marketing Strategy: Economic factors also play a role because global recession had hurt telecom sector deeply. Due to which, individuals cut back their spending on mobile telecom during the recession (Eaton et al., 2016). However, since the global recession has passed, the consumer spending on the mobile telecom expenses is back on track. The year 2016 has marked the economic revival because things have changed globally. This is why this factor is all about how individuals spend their incomes. If there is an economic recession, people would spend less on mobile telecom companies, however, due to economic revival, people tend to spend more (Greenglass et al., 2014).Global Marketing Strategy

This displays that the economic situation of US is suitable for the UK-based company to step into this country.

Social

Global Marketing Strategy This factor has a deep influence on the profitability of the telecom industry because it is majorly linked with the “consumer behaviour”. Connectivity is important for entertainment and work because the use of Internet-based services have grown. There is a rise in a number of individuals that use social media for business and fun. The services of video streaming need a good connection. This is why the usage of 4G has globally increased. Furthermore, more and more individuals want to remain connected because it is a part of their lifestyle (Ghezzi, Cortimiglia, and Frank, 2015). This is the behaviour of consumers that they do not want to stay disconnected with their friends and family. Besides, the people in US gaze on their mobile devices and smartphone. The usage of mobile computing has increased and various features in the tablets and smartphones cannot be utilised devoid of a good connection (Rahimi et al., 2014). Hence, social factor defines the consumer behaviour and that displays that the need to have a telecom company in the US is highly favourable.

Technological

The entire telecom sector is dependent on technology and hence technological changes have a huge impact on the industry (Lu, Lu, Yu, and Yao, 2014). Since usage of mobile computing is on rising in the US, and information technology is bringing a change in things like it has done never before (Rahimi et al., 2014). It is the mobile telecommunication industry, which stands to gain the most out of the technological trends. Moreover, 5G is soon to arrive and it has given rise to a lot of hype already. 5G is projected to take the things by decreasing costs for providers and speeding up the connections. Therefore, this factor is an important one and has a huge impact on the mobile telecom industry. Thus, it can be said that entering into the US can be beneficial for the firm because it will also provide competitive strength to the company by launching “5G” in the new market.Global Marketing Strategy

Environmental

Since smartphones are a huge part of e-waste that is annually generated. With respect to the level of e-waste generated by the mobile telecommunication companies, the telecom sector is emphasising on waste management and reducing its environmental footprint. The telecom companies are now focusing on decreasing their carbon intensity (Epstein, and Buhovac, 2014). The XYZ Mobile Telecommunication Company is also planning to implement a “24MW of Green Energy” by 2020 in the USA. In this manner, the company will focus on recycling (Viitanen, and Kingston, 2014). By the launch of this program, the company will reward its consumers who recycle the devices instead of throwing them away into the waste. Hence, the environmental factor can also prove to be beneficial for the firm if the mobile telecommunication company launches this program to reduce its environmental impact.

Legal

The legal compliance provides the rise to major risks for the providers of mobile telecommunication services. Apart from employment and common labour laws, there are some other licenses and laws as well, which is important to be followed (Kruppe, Rogowski, and Schömann, 2013). In the United States, there are laws regarding privacy and telemarketing, which should be complied by the providers (Countouris, 2016). Due to the changes occurred from the aftermath of 9/11 attacks, the telecom industry has been faced with additional pressures. The mobile telecom company on launching certain products needs to ensure that they are complying with the laws to become ethical. This will also provide the firm with a competitive strength because it will be an ethical firm as compared to its competitors.

The Uppsala Internationalisation Model

The Uppsala model is the model that is used for explaining the internationalisation process of firms (Hansson, Sundell and Öhman, 2004). According to this model, the companies need to internationalise first to the psychically close countries and move to more psychically distant markets. It even states that when companies choose a foreign market, they have to begin from low resource-commitment mode and move towards high commitment mode with the gain in experiential market in that foreign market. The model can be used by the UK-based mobile telecom firm to enter into US market.

By following the model, the UK-based firm can increase its activities in the foreign markets. According to the theory, the UK-based firm first has to gain the experience from domestic market prior to entering and starting its operations in the US (foreign market). The firm has to begin its foreign operations from geographically and culturally close countries and gradually move to the geographically and culturally distant countries. The firm can use traditional exports for starting its operations in US and can later on use a more demanding and intensive operation mode at the country and firm level. The Uppsala model defines the internationalisation of the firm as a process in which companies improve its international involvement gradually. This process progresses as an interaction between the knowledge development regarding the foreign operations and markets and a growing commitment of the resources to those markets.

Figure 1 The Uppsala Model (Source: Hansson, Sundell and Öhman, 2004)

SWOT Analysis

Another framework for analysis the micro and macro environment of the XYZ mobile telecom company is the SWOT analysis. This framework will analyse the nearby environment (strengths and weaknesses) and the environment (opportunities and threats) that impact the working of the business.

Strengths

• The XYZ is one of the biggest mobile service providers in the United Kingdom with a huge number of subscribers and users
• The firm has a huge market share in the mobile telecom industry
• It has a well-developed nationwide infrastructure
• It is an omnipresent brand and is the most visible brand in the UK
• It has superior reliability and overall network quality. The company receives no complaints against its network or slow data. It still provides a high quality mobile telecom service experience to its customers as compared to other available brands.
• It has strong NPD skills
• The company is famous for its innovativeness

Weaknesses

• It is although technologically advanced but needs to include more technologies such as 5G to gain competitive advantage.
• It is facing high competition from the mobile telecom companies already present in the UK market. They are providing it competition in terms of market share, price etc.

Opportunities

• The telecom company can expand further into new markets where it is not present such as the USA
• There are a lot of opportunities in U.S for the UK-based mobile telecom firm. This is because as mentioned by Miller (2015) in the New York Times that America has an expensive and a slow Internet that makes people annoyed who want to watch something on the Internet. This sluggish mobile telecom service has long-term economic influence for the American competitiveness. People pay 300 dollars a month and still receive slow Internet (Miller, 2014). The smaller cities of the USA such as Bristol, and Lafayette, have fast internet not because of the big mobile telecom firms but due to the presence of local networks. This reason behind this low speed is the lack of competition in the mobile telecommunication industry if the US. This analysis provides that the UK-based mobile telecom company can take a huge advantage out of this whole scenario and can establish itself as a fast internet service provider so that people get attracted after hearing the fastest internet services provided by the new mobile telecom company.
• Moreover, the UK-based firm can attain the benefit by coming up with prices of their services that are comparatively lower. This is because the Internet prices are higher in US (Holmes and Zubak-Skees, 2015). Thus, there is a need for a network that provides faster yet affordable services. The slow internet is increasing the gap between the connected and the unconnected (Thielman, 2015).

Threats

• The major threat to the new UK-based mobile telecom firm is the legal compliance. It might face various labour and employment laws that it has to comply with (Kruppe, Rogowski, and Schömann, 2013). Since the US has laws related to telemarketing and privacy, thus, they must be followed by the firm (Countouris, 2016).
• Because of the changes happened following 9/11 attacks, the newly established firm might face certain pressure in the industry……