Strategic Management

The success and expansion of a corporate heavily rely on market structure analysis to establish consumer tastes and preferences as well as an assessment of competitor strategies within that particular market. Competition has always been thought of a hindrance to business growth. A number of market strategists have opposed the phenomenon and commended competition for the role it plays in enhancing innovation, product quality, and customer satisfaction. Entry in a global market entails a comprehensive market survey to establish market demands, current market products as well as an in-depth analysis of the SWOT analysis of the competitors.

Global Market decision

The desire to counter the high rate of competition that has led to low sales volume as well as the need to expand the market base has aided in John and Deborah’s corporation’s decision to make a global market entry in China. China has various Furniture companies that operate both in the local and global market. The most notable companies who are likely to be John and Deborah’s corporation’s competitor are Shanghai JL&C Furniture Co. Ltd and Alibaba Group Holding.

Shanghai JL&C Furniture Co. Ltd has strengths that make it competitive. It has a strong relationship with local artisans; has highlytrained employees capable of producing quality furniture products of the desired designs and high-quality pricing offerings. Numbers of opportunities have been favorable towards the company’s growth. The company has a growing market with significant consumers with a positive taste for its products; ability to increase its production and sales volume while at the same time maintaining overhead costs.Theweaknesses include high transportation costs incurred in sourcing and sale of inventory as well as limited startup costs. The company’s threats include high insurance costs and increasing costs of inputs. According to Clausen (2014), such threats and weaknesses tend to lower the profit margin of the company.

Alibaba Group Holding’s strengthincludes a highly experienced owner, high gross margins and ability to carry out online selling. Its opportunities include continued growth of online sales, the ability to open branches in other regions and states. Just like Shanghai JL&C Furniture Co. Ltd, Alibaba Group Holdingtoo has weaknesses and threats that hinder its attainment of the targeted goals.The weaknesses include a high number of customers congestion affecting the quality of service offered to them as well as demoralized employees that experience heavy workload.The threats facing the company include low local unemployment rate within the company making some locals to dislike it.

Shanghai JL&C Furniture Co. Ltd and Alibaba Group Holding are direct competitors of John and Deborah’s corporationdue to the similarity of products produced in terms of design, texture, and quality with those provided by John and Deborah’s corporation. Their competitive advantage is that they manage to sell products at a lower cost without making losses due to their high sales volumes and low production costs.

To achieve a successful entry in China,John and Deborah’s corporation will form a cooperative strategy with Shanghai JL&C Furniture Co. Ltd for a number of reasons. The cooperation will allow John and Deborah’s corporation to share risks such as losses that come with first entry phase in the market. Secondly, the partnership will aid in learning some of the strategies that the competitor has used to remain relevant in the market. Lastly, cooperation will help in understanding the local laws and customs of running a business within the foreign market (Kent, David, 2017).

A number of strategies will be used by John and Deborah’s corporation to build a competitive market profile. Intensive product promotion, appropriate market segmentation and employment of a new cohort of artisans who will aid in the production of innovative products that will stand the market competition.

According to McGee ( 2017), a balanced scorecard is a metric tool used by strategic managers to identify gaps in the production and management functions and make adjustments aimed in ensuring that corporate goals are met. The tool will be used by John and Deborah’s corporation to establish the degree to which the planned activities are executed successfully as well as adjusting the identified gaps.

Conclusion

A market survey is essential for establishing the degree to which a new business should be sustained in the market. A SWOT analysis is necessary in analyzing competitors and how their activities shall impact on one’s business. Joint ventures are vital for new companies that enter a global market since it allows for the sharing of risks as well as helping new business owners understand the laws applicable in the new market.

 

References

Clausen, T. (2014). Countering business threats with Digital Technology. Dental Lab Products, 39(7), 48.

Kent, David (Summer 2017). “Joint Ventures vs. Non-Joint Ventures: An Empirical             Investigation”. Strategic Management Journal. 12: 387–393.

McGee, Jeffrey (Summer 2017). “Cooperative Strategy and New Venture Performance: The             Role of Business Strategy and Management Experience.” Strategic Management          Journal16: 565–580.

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