Q Week 12: Project 4 (Team) - Market Entry Project This is a semester-long team project that is based on EXTENSIVE research. Teams have to start working on the project once the teams are formed; ideally starting Week 3. The team agreement and work plan are due in your Study Groups by the end of Week 2. A brief weekly update should be posted in your Study Groups to inform me of your progress. If you need any help, contact me immediately. Good luck! • Foreign Market Entry Report Printer Friendly Version - Industry: Electric vehicles - Product line: Main-stream passenger electric cars - Countries: UK and Germany Important! 1. Read the course readings before starting to work on each week’s part of the report. 2. This project requires extensive research to provide scholarly sources to support concepts, and reliable non-scholarly sources to provide consumer, market, and industry information and specifics. 3. Post a brief (4 -5 sentences) update in you Study Group on your team’s progress in the Team report every week starting Week 4. 4. The Team Project should be posted in both your Study Groups; as well in each team member’s assignment folders for grading by Tuesday midnight of Week 12. For this assignment, teams are assuming the role of consultants. The CEO of Spark Inc. (a hypothetical multinational company) that manufactures fully-electric passenger electric cars wants to expand its operations into one of the two countries mentioned above. Spark’s CEO is asking your consulting company to conduct country, industry, market, and consumer analyses of the two countries in relation to the electric vehicles industry, and recommend ONE country for market entry i.e., the country that has an acceptable business environment for commercialization of electric passenger cars. Your Team analysis should focus on the major risks and opportunities the that two countries present as indicated by a thorough search of databases, journals and other sources. The report should demonstrate your ability to collect and summarize necessary country, industry, market, and electric passenger consumer data; work as a team, and present your major points in a clearly written report. Requirements A. Provide answers to ALL of the following questions: 1. What does Spark Inc. need to know about the electric vehicles environment for doing business in those two countries? 2. What short- and long-term risks and opportunities do the two countries present electric vehicles industry? Is there a risk of currency exchange exposure or currency controls? 3. What advantages do the two countries have that make one or both of them candidates for trade and investment for the electric vehicles industry? 4. Who is the competition in both countries? What are their strengths and weaknesses? 5. Conduct an analysis of the passenger electric cars consumer buying behavior and preferences in those two countries, and how they make their buying decisions? 6. What are the features and benefits that the electric passenger cars consumers look for in those two counties? 7. What role do social networks play in the buying decisions of the passenger electric car consumers int those two countries? 8. Which one of the two countries do you as consultants recommend to the CEO? 9. What is the best market entry mode (export, FDI, JV…..) for your recommended country? 10. What strategies and business practices have companies (competitors) in the same industry used to enter and operate successfully in your recommended country? 11. What specific operational, managerial, and organizational issues do companies in the same industry encounter in your recommended country? 12. What will be your branding strategy in your recommended country? B. Describe your market segmentation, targeting, and product positioning (STP) for your recommended country. Segment your market using real market figures and information (do not just explain what market segmenting is!). Explain how you would select your target segments, and explain the process of positioning the company's electric cars relative to the competition. C. Develop a value proposition for your product that is geared towards the consumers in your recommended country. A value proposition is simply “a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives” (Skok, 2013, para. 3). Essentially, a value proposition is the value that a company is providing to its customers, and which compels them to buy its products. Read this article: 4 Steps to building a compelling value proposition. Skok, M. (2013). 4 Steps to building a compelling value proposition. Forbes. Retrieved from https://www.forbes.com/sites/michaelskok/2013/06/14/4-steps-to-building-a-compelling-value-proposition/#16ec72734695 D. Develop your marketing objectives for your recommended country based on your research and projections. Marketing objectives are mainly quantitative (with some qualitative ones), and should be precise and focused. Using figures from your own market research, please include your projected annual: 1. Growth % 2. Market share % 3. Sales Units & $$ 4. Average unit price $$ 5. Profitability % 6. Customer satisfaction 7. CSR 8. Employees’ satisfaction Include your time-frame, and present the figures in a table at the end of your analysis. E. Do a breakeven analysis using your own projected figures obtained from your own research for your recommended country. Explain your breakeven analysis, and present the figures in a table that includes the following: 1. Forecasted average unit price (AUP) 2. Forecasted unit variable cost 3. Forecasted total fixed cost 4. Breakeven point (units) 5. Breakeven point ($$$) Breakeven analysis is a technique the relationship between the total cost and total revenue to determine profitability at various levels of production (Kerin & Hartley, 2017) The breakeven point (units) is the number of units sold at which total revenue is equal to total cost i.e. zero profitability. Breakeven point (units) = Total Fixed Cost/(Average Unit Price – Unit Variable Cost) Breakeven point ($$$) = Breakeven point (units) X AUP You come up with the figures based on your own research and projections! In addition, include your timeline for implementation; as well as the controls you intend to put in place, and how you intend to proceed when your benchmarks are not met (contingency plans). Deliverable This Project requires you to synthesize the key findings of your team analysis, and to present your conclusions/recommendations (answers to the eleven questions above) in a 30 – 32-page (maximum!) report. The cover page, table of contents, executive summary, appendixes, and references are not part of the page count. Use one-inch margins, size 12 New Times Roman font, double-spacing, and APA format for citations and references. Format Your report is to be organized as follows: 1. Table of Contents 2. Executive Summary: One page that highlights the findings and recommendations. 3. Introduction: Half a page that states the major questions you will address in your report. 4. Analysis: Eleven Parts • Part A: Do the countries have an acceptable economic, political, ethical, legal environment? Do a SWOT analysis for a competitor that is currently operating in your recommended country; as well as a PESTEL analysis and Porter Five Forces analysis for both countries. • Part B: Do the countries have a suitable infrastructure? Is one location in a country more suitable for the industry than another? • Part C: What cultural challenges will Spark’s staff encounter in the workplace of the two countries? • Part D: Do an analysis of the electric passenger car consumer; as well as the features and benefits of electric passenger cars to those consumers (for both countries). • Part E: Describe your STP for your recommended country. • Part F: Value proposition to the consumers in the recommended country. • Part G: Discuss the role of social networks in the two countries, and your branding strategy for the recommended country. • Part H: Marketing objectives for the recommended country. • Part I: Breakeven analysis, controls, and contingency plan for the recommended country. 5. Recommendation: Make a recommendation (Go/No Go). • Include this sentence: “Team XYZ recommends that you enter the market in ___________ (country name), and provide a brief rationale for this decision. • Provide a table in the appendix that summarizes the pros and cons developed in Parts A, B, and C for the two countries. Process/Steps to develop your team analysis 1. Research the two countries (do not use the CIA Factbook!): - A good place to start your work is BBC’s “Country Profiles”—the basic facts http://news.bbc.co.uk/2/hi/country_profiles/default.stm - Information on using UMGC online resources: http://libguides.umgc.edu/business_and_marketing - click on “country info. - UMGC’s library Hoover’s database. - globalEdge ( http://globaledge.msu.edu/ ) provides resources for country studies. Click on Reference Desk (http://globaledge.msu.edu/reference-desk ) and then on "Global Resource Directory" and then on "Statistical Data Sources" - provides links to all the major sources for statistical data including the World Bank World Development Indicators. - The following resources below provide up-to-date information/data on all the major topics for your report: World Bank’s Data Catalog – http://data.worldbank.org/data-catalog - a must “go to” site for your report for up-to-date economic and social indicators and on a broad range to topics, including market size/population, wealth of consumers (GNI per capita, PPP), political system, rule of law/legal system, commercial system. Click on: http://data.worldbank.org/data-catalog/world-development-indicators You can then sort by country, topic, indicator—and other data are available. World Economic Forum – Global Competitiveness Report 2019 – The report provides data on over 140 economies and is one of the most comprehensive assessments of national competitiveness worldwide. Excellent graphics http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf World Economic Forum – The Global Enabling Trade Report 2016 -The report assesses the quality of institutions, policies and services and provides benchmarks for over 130 economies in four critical areas: Market access; border administration; transport and communications infrastructure; and regulatory and business environment. Companies use this report/reference to help them with investment decisions. http://reports.weforum.org/global-enabling-trade-report-2016/ World Economic Forum – The Global Information Technology Report 2016 https://www.weforum.org/reports/the-global-information-technology-report-2016 This 2016 edition Report gives you information on over 140 economies’ networked readiness, and how prepared an economy is to apply the benefits of information and communications technologies (ICTs). The report uses the Networked Readiness Index (NRI) to identify the capacity of countries to leveraging ICT, by assessing the overall political and business environment, the level of ICT readiness and usage of ICT among the population, businesses and government, as well as the overall impacts of ICTs on the economy and society at large. The report includes detailed information for each country on a range of topics—all of which are central to your report. The rankings also show how far some countries have gone in bridging the digital divide – not only in terms of developing ICT infrastructure, but also in terms of economic and social impact – and highlight the main strengths and weaknesses countries are facing. World Bank – Doing Business 2020. https://www.doingbusiness.org/en/reports/global-reports/doing-business-2020 Also provides data, by country and topic, on the cost of doing business - one of the “must go to” sources. Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in the 2016 report's ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year's ranking. U. S. Department of Commerce – Country Commercial Guides – provide data/information on most of the key topics for the team report – are major sources of information for U. S. – based companies that want to invest and operate abroad. https://www.trade.gov/ccg-landing-page World Bank - Data on corporate governance, transparency of accounting and financial transactions, money laundering, and corruption - http://info.worldbank.org/governance/wgi/index.aspx#home (World Bank's Worldwide Governance Indicators). Detailed reports are provided for over 100 countries. Each country report includes a list of the sources used for the report, a very good source of where to go for additional information on your two countries. Transparency International – http://www.transparency.org/country – provides the “Corruption Perceptions Index” for each country and the “Global Corruption Barometer”. The site gives you many “surveys and indexes” and detailed “reports” on individual countries and regions. Scroll down to “Other Government and Development Indicators” for snapshots on judicial independence, rule of law, press freedom, voice and accountability. The data is mainly derived from the World Bank. Also highly recommended for country research is the Control Risks' RiskMap2020 https://riskmap.controlrisks.com/ - “the key risks and opportunities your company will face business in the year ahead.” The interactive map presents “live risk ratings” on key issues. You can select a region, videos, whitepapers and more. When you click on a region you get a video, an overview, white papers-excellent resources for your report. 2. Research the competition in your recommended country Describe the nature of the competitor’s international operations in general, its specific interests in the recommended country, its strategies; as well as any implementation issues that it may have encountered in the recommended country. Here are some recommended UMGC library databases for company research: o ABI/Inform Complete - Click on "Data & Reports" o Business Insights: Essentials - Enter name of company in search box o Business Source Complete - Click on "Company Information" at top. o General Business File ASAP - "Search investment reports - By Ticker Symbol" OR click on "Company Profiles" o Ibis World o Hoover's - Click on "All Categories" and from the drop-down list select "Companies" and enter the company's name. o LexisNexis Academic - click on the "Get Company Info" link towards the bottom of the page to enter a company's name or ticker symbol. o Mergent Online o Company Profiles, Standard & Poor's (S&P) NetAdvantage - available from http://www.umgc.edu/library/libresources/ In the S&P NetAdvantage database, click on the "Companies" tab in the blue menu bar at the top of the page. • Team Project: Rubric Discussion Topic I'm Done Attached here is the rubric that will be used to assess your case analysis for your Team Project (Project # 4). Please use the rubric to plan and check your work. Let us know if you have any questions about the assignment or the rubric.