International Marketing Plan For Semantic Software In China: A Semantics Approach
1.1 Company profile
The current business scenario is highly competitive in nature with having the presence of huge number of players in the market. Each and every business sectors around the world are highly competitive and more competitors are entering. This phenomenon is further getting amplified with the initiation of globalization (Amin, 2014). This is due to the reason that globalization is enabling the contemporary business organizations to have the opportunities in entering in the foreign markets and gaining profit from across the world. However, initiation of the foreign market operations will have a number of factors to be considered by the business organizations. These factors will determine the effectiveness of the foreign market operations in the long term (Laufs & Schwens, 2014).
This report will discuss about international marketing plan of Semantic software in entering in the Chinese market. This report will briefly discuss about the company profile of semantic software along with the target country and industry description. In addition, this report will discuss about the external business factors to be faced by Semantic software in doing business in China. Competitor analysis will also be done to review the competitiveness in the industry where Semantic software is going to operate. SWOT analysis will be done to identify the internal effectiveness of them in doing foreign business. In accordance to the identified factors, an ideal marketing strategy will be recommended for Semantic software. Budget and implementation plan will also be discussed in this report.
1.1 Company profile
Semantic software is one of the leading medium size organizations in Australia in the Information Technology sector. It is reported that they are sixteen years old company based out of Sydney, Australia. Even though they are considered as medium size organization but they are one of the few companies that survived the dotcom bubble in the early 2000. In addition, one of their major competitive advantages of them is larger patent portfolio mainly in artificial intelligence.
This is helping them in tapping the growing importance of artificial importance in the current time (Bavota et al., 2013). It is also being identified that they are unlisted public company with having 180 shareholders. Thus, it can be concluded that Semantic software is having the access to the fund that will be beneficial for them in entering in the foreign market. Their major service offerings include software solutions and technology of artificial intelligence. Thus, they mainly cater to the business clients and follow business to business approach.
1.2 Description of the target country
China is one of the leading developing countries in the world in the current time with having their growth rate more than that some of the developed countries. This is the major reason behind the selection of China as the potential country for Semantic software. In addition, China is also the most populous country in the world (Herrerias, Joyeux & Girardin, 2013). This will help Semantic software to have more business opportunities in operating in the Chinese market. According to various reports,
1.2 Description of the target country
China is rapidly evolving as technology powerhouse in the global scenario. Majority of the technological firms across the world are having their operations in China to tap the growing opportunities. Demand for artificial intelligence is growing among these technological firms and entering in the Chinese market will enable Semantic software to cater this demand (Top500.org, 2018).
1.3 Identification of the target market
It is decided that Semantic software will target the booming information technology sector in China. This is due to the reason that Information Technology industry comprises of both software solutions and electronic smart devices companies (Coeurderoy & Murray, 2014). In the recent time, artificial intelligence is witnessing demand in the information technology especially in electronic gadgets industry. This is mainly due to the fact of using artificial intelligence in the smart devices. Thus, this industry is selected for the foreign business operation of Semantic software.
1.4 Primary entry strategy
The primary entry strategy for Semantic software will be the direct investment by means of having their subsidiary in China. This will help them in localizing the operations in China and reducing the average cost. On the other hand, initiation of the direct investment or Greenfield investment strategy will also enable Semantic software to tap the lower cost of resources in China (Shiau, Huang & Chen, 2013). This will also help them customize their service offerings according to the requirement of the Chinese information technology sector. Thus, it is concluded that Semantic software will implement direct investment strategy in entering in the Chinese market.
2.0 Research methodology
This report will be based on qualitative data to be gathered from the secondary sources. There are huge data and information available with the secondary sources, which can be tapped to design the international marketing plan for Semantic software. In addition, initiation of the qualitative research will also help in identifying the differences among different reports and information. Critical analysis will be more effective with qualitative research. In addition, facts and figures will also be used where applicable in this report.
3.0 Situational analysis
Situational analysis will be initiated in order to have the detailed review about the competencies about Semantic software along with the identifying the trends of key determinants, which will have influence on the business operation of Semantic software in China. Demand analysis will also be included in this part to identify the potentiality of the selected industry. Competitor analysis will be done to identify the competitiveness of the competitors of Semantic software in China.
3.1 Company analysis
Resource based view will be used to identify the core competencies of Semantic software including both their positive and negative factors. According to this framework, the first two elements are tangible and intangible resources.
|
Valuable |
Rarity |
Inimitability |
Organizational expertise |
|
|
Financial resources |
yes |
No |
No |
Yes |
|
Patents and trademarks |
Yes |
Yes |
Yes |
Yes |
|
Brand value |
Yes |
No |
Yes |
Yes |
|
Facilities and assets |
Yes |
No |
No |
Yes |
China is having considerably stable political scenario. This is mainly due to the reason that China is having communist rule and political rivalry does not exist. In addition, in the current time, Chinese government has initiated a number of schemes to attract foreign investments and this is helping China in becoming the global hub of business. However, there are number of negative factors also being identified in operating in China (Zhong, 2015).
1.3 Identification of the target market
According to global competitiveness index, China is having the ranking of 18 in burden of government regulations. This denotes that businesses operating in China are facing burden of dealing with the regulations of the government. Furthermore, being a communist country, China is having closed market economy and Semantic software will have the issue in dealing with these regulations.
World Economic Forum also reported that China is ranked at 104 in terms of number of procedures of starting a business (weforum.org, 2018). This refers to the fact that Semantic software will face challenges in getting the permission and other formalities in starting their business in China. This also denotes that complexities in terms of regulations evident in doing business in China. However, on the other hand, it is also reported by the world economic forum that China is having the ranking of 45 in efficiency of legal framework in settling disputes (Tong & Zuo, 2014). This will be beneficial for Semantic software in having favorable legal environment in the country.
3.2.2 Regulatory environment
China is having the ranking of 132 in terms total tax rate, which denotes that business organizations operating in this sector will have the challenge of having higher taxation rate. In the case of Semantic software, this will increase the cost of operation and will ultimately increase the final price of their offerings. China is also having low ranking of 118 in terms of trade tariffs and this is denoting that Semantic software will face issues in exporting their services (weforum.org, 2018).
This is due to the reason that higher trade tariffs will increase the cost of international business for them. However, it is also identified that the effect of higher tax rates on the investment pattern in China is less with having their ranking at 27 (weforum.org, 2018). This can be considered as positive regulatory factor for Semantic software in doing business in China. Tax regulations and foreign currency regulations will be the major regulatory problematic factors to be faced by Semantic software in doing business in China.
Source:
It is reported that economy growth rate of China is one of the highest in the world. As of 2018, they are having their growth rate over 6 percent and it is projected that it will witness positive growth in the coming years till 2019 (Rodrik, 2014). Thus, it can be concluded that Semantic software will face positive market opportunities in the coming years also.
It is reported that this artificial intelligence industry will witness huge growth in the coming years mainly due to its gaining of importance in the smart device market. The global figure is denoting that Semantic Software will have positive growth rate in the long term in doing business in China. It is also reported that government of China issued a next generation artificial intelligence development plan. It is targeted that within 2030, China will become the global leader in this sector and with having highest funding (Li et al., 2017). Thus it can be concluded that Semantic software is having favorable economic environment in doing business in China.
1.4 Primary entry strategy
3.2.4 Socio-cultural environment
As discussed earlier, Semantic software will cater to the information technology industry in China and this sector is having favorable factors in regard to the social and cultural environment. This is due to the reason that demand for smart devices such as smart phones is increasing in the recent time and more devices are being offered along with artificial intelligence.
This is mainly due to the reduction in the free time for the customers and they prefer more virtual assistances in their daily work (weforum.org, 2018). Thus, these social preferences are leading the growth opportunities of the electronic gadgets industry, which will in turn enhancing the business for the artificial intelligence industry. However, on the other hand, it should also be noted that preference and requirement pattern of the customers are evolving rapidly and this will be the challenge for Semantic software to cope up with this change and offer products accordingly (Li, 2018).
3.2.5 Demographic environment
Demographic environmental factors for Semantic software will get determined by the influencing factors for the electronic gadgets market especially the smart devices industry. It is should be noted that demand for the smart devices will be more among the young and adult professionals (Curtis, Lugauer & Mark, 2017). Thus, the more will be the demographic orientation towards the younger generation, the more will be the favorable factors for Semantic Software. This is due to the fact that the more will be the demand for the smart devices; the more will be their potentiality for the artificial intelligence.
It is reported that the younger and middle age population will consist of the major portion of the total population of the country. According to the above figure, it is identified that age group between 25 and 55 will be the major portion of the China’s total population in 2025. This is denoting that the potential customers for the smart devices will get increased in China in the coming years and this is also providing favorable demographic factors for Semantic software also. In addition, with the increase in national economy of China, the per capita income of the average population is also increasing. This is increasing the purchasing power of the customers and the market for artificial intelligence will further get increased.
3.2.6 Technological environment
Technological environment is one of the most important determining factors for Semantic software due to the reason that their business potentiality is based on technological advancement. According to the global competitiveness index, China is having the ranking of 91 in availability of latest technology. This denotes that Semantic software will not have the easy access to the latest technology as they have in Australia (Chen et al., 2014). However, they can have the access to their existing technologies and get them developed further with the lower cost of resources in China.
It is also reported that China is having the ranking of 49 in terms of technology transfer (weforum.org, 2018). This is denoting that that Semantic software will have fewer challenges in transferring their technology to and from China. Global competitiveness index also indicated that China is having favorable ranking in availability of engineers and scientists. This will also help them in having the access to the larger human resources in developing their business in China.
2.0 Research methodology
3.2.7 Physical environment
Infrastructural environment will have lower level of impact on the business of Semantic software. This is due to the reason that they will not involve physical movement of product (Su et al., 2013). However, infrastructure is important for them to have all the facilities and amenities in their operations in China. According to the global competitiveness index, China is having the ranking of 65 in terms of quality of electric supply. This denotes a moderate ranking and Semantic software will have moderate quality of electric supply. On the other hand, in terms of overall infrastructure pillar, China is ranked at 46, which can be termed as favorable situation (weforum.org, 2018). Thus, Semantic software will have moderately favorable infrastructure in doing business in China.
3.3 Nature and extent of demand
According to the reports, artificial intelligence industry of china is rapidly increasing and is a $.5 billion business as of 2017. It is also reported that this industry will reach to new heights and will get increased by more than 70 percent. According to the reports, investment in the artificial intelligence in China accounts for more 60 percent of total investment in the world (Usa.chinadaily.com.cn, 2018). Currently, China is ranked first in terms of number of artificial intelligence related patents in the world. This is denoting the potentiality of this industry and it will help Semantic software to have a favorable demand environment in doing business in China.
3.4 Product life cycle
The service offering of Semantic software will be in the growth stage according to the product lifecycle model. This is due to the reason that in the current global scenario, the trend of artificial intelligence is growing and more industries are involving artificial intelligence in their operations. Thus, the market is growing and this will help Semantic software to have increased trend of demand for their services in the market.
3.5 Competitor analysis
The major competitors for Semantic software in the Chinese market are SenseTime, DJI, Ubtech Robotics, and Cambricon. All these companies are considered as the top 100 artificial intelligence companies in the world. In addition, there are more than 4000 startups and all of them will be treated as competitors for Semantic software. The market mainly consists of smart device manufacturers such as Xiaomi, Huawei and BBK technologies. These brands are investing more in developing artificial intelligence in their smart devices.
Thus, offering them the same technologies in competitive price will provide potential business opportunities for Semantic software (Chui & Francisco, 2017). As discussed in the above sections, the major competency for Semantic software will be their more than 15 years of experiences in developing artificial intelligence. In addition, the patents with them will also help Semantic software to provide distinctive services over their customers.
The perception of the customers against artificial intelligence will be favorable in the Chinese market. This is due to the reason that artificial intelligence will act as virtual assistance for them and they will have the access to more personalized services in the future. Moreover, there is no particular expectation of the customers from the artificial intelligence due to the fact that it is still in the developing stage.
3.0 Situational analysis
Thus, it will be beneficial for Semantic software to do not have to face challenges in meeting the certain requirements of the customers (Ransbotham et al., 2017). Artificial intelligence industry can be included in the information technology sector and gradually it is becoming a separate entity. This industry mainly runs on the basis of business to business approach and thus the average trend of the industry and macro economic factors are having greater influence.
4.0 SWOT analysis
The SWOT analysis can be described as a useful tool which can thereby be used to investigate into the strengths as well as the weaknesses of the business venture and to analyze the existence of any threats or opportunities which may have an impact on the overall functioning of the organization (Hill, Jones & Schilling, 2014).
4.1 Internal Company Strengths and Weaknesses
The internal company strengths as well as the weaknesses have been given as follows:
Strengths
The strengths can be defined as the capabilities of the company which can assist it in achieving overall success. These strengths help the company to combat against the different market forces which may act negatively for the company. The strengths which are possessed by the Semantic software have been given as follows:
- The company deals with structured as well as unstructured data present on the social media which thereby goes a long way in ensuring success for the firm at large.
- It has a large client base which involves companies which are quite big like various Governmental and Fin Tech companies (Doz, 2017).
- The company has a strong competitive positioning in the Australian Market which thereby provide them with adequate resources as well as knowledge.
Weaknesses
The weaknesses can be rightfully defined as the lack of certain capabilities in an organization which hinder the overall growth and prosperity of the firm at large and leaves it vulnerable to the various competitive forces as existing in the market. These are as follows:
- The expenses which are incurred by the firm are quite high as Artificial Intelligence is an expensive technology.
- Artificial intelligence cannot be improved with experience. It does not work like skills which can improve with time.
- It leads to unemployment of various candidates and potential employees at large which often leads to a backslash against the company.
- 4.2 External Market Opportunities and Threats
Opportunities
The opportunities can be rightfully defined as the existence of certain factors as present in the external market which may thereby lead to a positive impact for the firm at large (Meyer, Neck, & Meeks, 2017). The different opportunities to which Semantic software has been exposed to are as follows:
- There is a growing need of Artificial Intelligence in various spheres of business and thereby proves to be a suitable opportunity for the company to thereby expand its operations at large.
- Various developing countries like India and China are a great destination for the different companies who want to achieve success in the long run and hence, they should invest accordingly.
Threats
The threats can be described as the presence of certain negative factors in the external environment which may thereby lead to a loss for the overall welfare of the company. The different threats as possessed by Semantic software’s can be stated as follows:
- There exists large scale competition in the external environment. As AI can be considered to be a growing segment, there are many companies involved in the similar field of work (Baker & Saren, (2016).
- Moreover, the social and cultural aspects of the different countries are quite different from one another and hence may act as a barrier for the company`s progress.
- 4.3 Implications of the SWOT analysis
The implications of the SWOT analysis can be stated to be as follows:
- It can be identified, that the firm is thereby prepared to expand internationally (Robson, 2015).
- However, it will be able to look out for the culture and social aspects of the countries to achieve long term success.
- 5.1 International objectives
- To expand the global market presence by 10 percent within the next 2 years.
- To leverage on the comparative advantages of doing business in China and further expand to other foreign countries.
- To reduce the average cost of operation by means of having more revenue streams.
- 5.2 Market objectives
- To cover 40 percent of the target market in China within the next 1 year.
- To become the market leader in offering artificial intelligence solutions to the business clients.
- To determine the requirement and trend of the market and offer services accordingly.
- 6.1 Identification of the target market segmentation
Demographic segmenting variables will not be applicable in targeting the business customers. This is due to the reason that age groups and income are not applicable in targeting the business clients. In terms of the geographical segmentation, in the initial stage, businesses from the tier I cities of China will be targeted (Cross, Belich & Rudelius, 2015).
This is due to the reason that these company with have the infrastructural advantages. In terms of the valuation standards, only the medium and large companies will be targeted due to the fact that they will only be interested in investing in artificial intelligence. In terms of functional segmentation, only the smart devices manufacturers will be targeted and in the initial stage as the use of artificial intelligence is rapidly increasing in the electronic device industry.
6.1.1 Identification of the targeting strategies
4.0 Competitor analysis
According to the Porter generic strategies, there three major options are being available with the business organizations in targeting the segmented customers. They are cost leadership, product differentiation and market focus. In the case of Semantic software, cost leadership will be followed (Kaliappen & Hilman, 2013). This is due to the reason that in the Chinese market, the average cost of resources especially the human resources is less and the operation cost for Semantic software will also be less.
In addition, this should also to be noted that initiation of the cost leadership strategies will be helpful in gaining competitive advantages over their competitors. Product differentiation strategy will also be initiated by Semantic software due to have unique and distinctive approach in the market (Liu & Zhang, 2013). It is recommended that Semantic software should have artificial intelligence personalized for the smart devices. Concentrating in a single industry will help Semantic software to have more updated services over their competitors.
6.2 Positioning strategy
Semantic software will be positioned as affordable artificial intelligence service provider with having more utility and productive approach. Thus, the value proposition for the customers will be the added features of the technology and cost effectiveness.
According to the above positioning map, it is clearly identified that the unique positioning of Semantic software will help them in having less number of direct competitors. This is due to the reason that as per the above map, most of their competitors are operating in the higher price point or they are having lower utility compared to Semantic software (Akpoyomare, Adeosun & Ganiyu, 2013).
6.3 Sustainable marketing principles
There are number of factors in relation to the sustainable marketing approaches that will be followed by Semantic software. One of the major principles will be consumer oriented marketing. This is due to the reason that consumer orientation will be beneficial for Semantic software in determining the need of the Chinese customers and offering the service accordingly (Lii, Wu & Ding, 2013). In this case, the meeting of the desired outcome by the customers will be more effective. In addition, the sense of mission marketing will also be initiated in such a way that the mission statement will cover the larger social responsibilities apart from their profitability (Shamma & Hassan, 2013). The mission statement of them will discuss about advantages of artificial intelligence on the society. Societal marketing will include involvement of the backward communities to aware the clients about the advantages of the artificial intelligence.
6.4 Identification of the local cultural norms and values
Marketing activities of Semantic software will also include the consideration for the local cultural norm and values. According to the Hofstede’s cultural dimensions, Semantic software should have more leadership authority in their Chinese operation in accordance to the high degree of power distance in the country. In addition, the success to be gained by the customers from the use of artificial intelligence will be used in branding communication. This is due to the reason that high degree of masculinity denotes that Chinese society is driven by success.
5.0 SWOT analysis
6.5 Market entry strategy
It is recommended that Semantic software should initiate direct investment strategy in doing business in China. This is due to the reason that directly investing in the Chinese market will help them to avail the investment and tax benefits offered by the government (Tayar & Jack, 2013). On the other hand, direct investment will help Semantic to regulate the operation cost and offer their services in most cost effective way.
7.0 Marketing mix Strategies and Tactics
The marketing mix strategies as well as tactics can be rightfully defined as the strategies with respect to the Product or Service being offered, the Pricing strategy, the Place and distribution strategy and the Promotion strategy which shall be followed by the company in concern, Semantic Software’s. The marketing mix strategies and tactics have been given as follows:
7.1 Product/Service and Branding Strategy
The Product / service and branding strategy can be described as the strategy which is generally adopted by companies to ensure that the products are successful in the market at large (Olson et al., 2018) The Artificial Intelligence products which are provided by Semantics Software’s are as follows. Semantics ensures that Cognitive AI will be available as a web service on AWS and other platforms like Oracle cloud, Azure and related companies.
The Semantic software’s aims to ensure that the data which they are providing to the company can either be kept in house as they are private in nature just like done by various government and other financial firms. Along with this, the organization also offers a software with some license fees and guides it on a maintenance basis. This is its business model which is quite common in nature (Bresler & Lubbe, 2014). The branding strategy which is adopted by the firm aims to ensure that the different customers as present in the target market view the firm as an overall solutions company who in exchange for a license and maintenance fees will be able to manage the data for the firms.
7.2 Place (Distribution) Strategy
The place or the distribution strategy can be essentially defined as the manner in which the firm aims to distribute the products of the company into the market (Wheelen et al, 2017). The distribution strategy tends to play a key role in determining the overall success of the company at large and any firm which aims to ensure that they want to expand internationally needs to take into consideration a profound distribution strategy which would thereby assist them in ensuring successful operations (Marshall, 2014).
As the company has decided that China will be their ultimate place whereby they will be targeting their products and services, the company has moreover decided to place the products in the form of a direct investment opportunity and thereby opening a subsidiary in the Chinese market. Hence, the company aims to use the direct medium as a channel to promote the products of the company. In addition to this, they will also be making use of the online medium for other maintenance related aspects (Foxall, 2014).
6.0 Marketing objectives
7.3 Price Strategy
Semantic Software’s is a considerably popular company as present in the market and for this reason it becomes thereby relevant that they make use of a considerable pricing strategy so as to ensure maximum access to the specific target market and to ensure the overall success at the international market (Malhotra & Peterson, 2014). The pricing strategy which will be adopted by Semantic software’s will be the strategy of Penetration pricing strategy.
As the company has a large number of competitors in the market, the pricing strategy will go a long way in ensuring that Semantic will be able to gain a larger market share and try to appeal to the customers using its exceptional services and when later on the company becomes a known name in the IT and smart devices industry in China it can increase the price of the products considerably according to the strategy (Rothaermel, 2015).
The pricing strategy which the company aims to adopt is ethical in nature and thereby look out for the welfare of the overall company at large as well as their duty towards the community.
7.4 Promotion Strategy
The promotional strategy can be essentially described as the manner in which the organization aims to promote its services in the Chinese market. It needs to be noted that as China is rather a restricted market with respect to the use of the internet, the Semantic software needs to ensure that it makes the right use of the appropriate channels and thereby sees to it that it is essentially able to ensure overall success of the firm (Chernev, 2018). The company will be using various mediums like banners, print media, newspaper, television advertising, sponsorship activities, conferences and other means of social media which will ensure success. The Promotion budget of the firm is given as follows:
|
CAMPAIGN TYPE |
QTY |
PROJECTED COST PER UNIT |
PROJECTED SUBTOTAL |
|
|
National Marketing |
|
|
SUBTOTAL |
$ 1,200.00 |
|
Banner Ads |
3 |
$ 400.00 |
$ 1,200.00 |
|
|
$ – |
||||
|
$ – |
||||
|
Local Marketing |
|
|
SUBTOTAL |
$ 4,000.00 |
|
Newspaper |
3 |
$ 700.00 |
$ 2,100.00 |
|
|
In-Store Marketing |
5 |
$ 300.00 |
$ 1,500.00 |
|
|
POP |
1 |
$ 400.00 |
$ 400.00 |
|
|
$ – |
||||
|
Public Relations |
|
|
SUBTOTAL |
$ 2,600.00 |
|
Public Events |
$ – |
|||
|
Sponsorships |
$ – |
|||
|
Press Releases |
10 |
$ 100.00 |
$ 1,000.00 |
|
|
Webinars |
$ – |
|||
|
Conferences |
8 |
$ 200.00 |
$ 1,600.00 |
|
|
Client Events |
$ – |
|||
|
$ – |
||||
|
Content Marketing |
|
|
SUBTOTAL |
$ 10,000.00 |
|
Sponsored Content |
$ – |
|||
|
Landing Page |
10 |
$ 1,000.00 |
$ 10,000.00 |
|
|
White Papers / eBooks |
$ – |
|||
|
$ – |
||||
|
Social Media |
|
|
SUBTOTAL |
$ 4,000.00 |
|
|
15 |
$ 200.00 |
$ 3,000.00 |
|
|
|
5 |
$ 200.00 |
$ 1,000.00 |
|
|
Online |
|
|
SUBTOTAL |
$ 3,000.00 |
|
Blog |
3 |
$ 500.00 |
$ 1,500.00 |
|
|
Website |
1 |
$ 500.00 |
$ 500.00 |
|
|
Mobile App |
$ – |
|||
|
Mobile Alerts |
$ – |
|||
|
Email Newsletter |
5 |
$ 200.00 |
$ 1,000.00 |
|
|
$ – |
||||
|
Advertising |
|
|
SUBTOTAL |
$ 5,000.00 |
|
Online |
3 |
$ 1,000.00 |
$ 3,000.00 |
|
|
|
2 |
$ 500.00 |
$ 1,000.00 |
|
|
Outdoor |
4 |
$ 200.00 |
$ 800.00 |
|
|
Radio |
$ – |
|||
|
Television |
1 |
$ 200.00 |
$ 200.00 |
|
|
$ – |
||||
|
$ – |
||||
|
Web |
|
|
SUBTOTAL |
$ 5,000.00 |
|
Development |
1 |
$ 5,000.00 |
$ 5,000.00 |
|
|
Pay-Per-Click Marketing |
$ – |
|||
|
SEO |
$ – |
|||
|
$ – |
||||
|
$ – |
||||
|
Market Research |
|
|
SUBTOTAL |
$ 4,000.00 |
|
Surveys |
8 |
$ 500.00 |
$ 4,000.00 |
|
|
Impact Studies |
$ – |
|||
|
$ – |
||||
|
Sales Campaigns |
|
|
SUBTOTAL |
$ 12,000.00 |
|
Campaign A |
1 |
$ 2,000.00 |
$ 2,000.00 |
|
|
Campaign B |
2 |
$ 5,000.00 |
$ 10,000.00 |
|
|
Campaign C |
$ – |
|||
|
Campaign D |
$ – |
|||
|
Campaign E |
$ – |
|||
|
$ – |
||||
|
Other |
|
|
SUBTOTAL |
$ 2,550.00 |
|
Premiums |
2 |
$ 1,000.00 |
$ 2,000.00 |
|
|
Corporate Branding |
$ – |
|||
|
Business Cards |
10 |
$ 55.00 |
$ 550.00 |
|
|
Signage |
$ – |
|||
|
$ – |
||||
|
Total |
|
|
$ 65,950.00 |
8.1 Planning Assumptions
The following planning and forecasting assumptions will be made by the company in regard to the sales made and the costs of the sales incurred:
(Find the attached business expansion plan excel file for further details)
It is assumed that the first year revenue will be $650000 and that the costs of the products being sold will be $337500.
8.2 Forecast Sales and Costs
Please find the attached excel sheet and the snapshots as follows:
Forecasted sales
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
||
|
Gross revenue |
$650,000 |
$663,000 |
$689,520 |
$730,891 |
$789,362 |
|
|
Cost of goods sold |
$337,500 |
$344,250 |
$358,020 |
$379,501 |
$409,861 |
|
|
Gross margin |
$312,500 |
$318,750 |
$331,500 |
$351,390 |
$379,501 |
Forecasted costs
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
||
|
Sales and marketing |
$65,950 |
$67,269 |
$69,960 |
$74,157 |
$80,090 |
|
|
Payroll and payroll taxes |
$20,000 |
$20,400 |
$21,216 |
$22,489 |
$24,288 |
|
|
Depreciation |
$21,280 |
$21,706 |
$22,131 |
$22,557 |
$22,982 |
|
|
Maintenance, repair, and overhaul |
$1,900 |
$1,938 |
$1,976 |
$2,014 |
$2,052 |
|
|
Total operating expenses |
$109,130 |
$111,313 |
$115,283 |
$121,217 |
$129,412 |
8.3 Forecast Cost
(Please refer to the excel sheet as attached)
|
Fixed Expenses |
|
|
Fixed Expenses |
|
|
Bldgs / Real Estate |
$ 72,000 |
|
Leasehold Improvements |
15,400 |
|
Capital Equipment |
19,000 |
|
Location / Admin Expenses |
19,200 |
|
Opening Inventory |
70,000 |
|
Advertising / Promo Expenses |
65,950 |
|
Other Expenses |
20,000 |
|
Total Fixed Expenses |
$ 281,550 |
|
Variable Expenses |
|
|
Inventory or Materials |
30% |
|
Direct labor (includes payroll taxes) |
|
|
Other expenses |
|
|
Other expenses |
|
|
Salaries (includes payroll taxes) |
|
|
Supplies |
|
|
Total Variable Expenses |
30% |
9.1 Formal Project Plan for Implementation of Recommendations
Project Plan
|
S No. |
Project Activities |
Start date |
End dates |
Duration |
|
2019 |
2024 |
in days |
||
|
1 |
Collection of adequate data for the purpose of expansion |
02-Jan-19 |
15-Feb-19 |
44 |
|
1.1 |
Checking the relevant Chinese laws |
02-Jan-19 |
10-Jan-19 |
8 |
|
1.2 |
Analysis of the AI market in China |
10-Jan-19 |
26-Jan-19 |
16 |
|
1.3 |
Checking whether adequate resources are available or not |
26-Jan-19 |
15-Feb-19 |
20 |
|
2 |
Gathering adequate resources for the purpose of expansion |
16-Feb-19 |
02-Apr-19 |
45 |
|
2.1 |
Setting the correct priority which can thereby assist the firm in expanding adequately |
16-Feb-19 |
28-Feb-19 |
12 |
|
2.2 |
Undertaking further requirement and resource analysis |
28-Feb-19 |
05-Mar-19 |
5 |
|
2.3 |
Risk management |
06-Mar-19 |
15-Mar-19 |
9 |
|
2.4 |
Identification of the flow of the entire process |
15-Mar-19 |
02-Apr-19 |
18 |
|
3 |
Project Plan development |
03-Apr-19 |
30-Jun-19 |
88 |
|
3.1 |
Time scale analysis and development |
03-Apr-19 |
15-Apr-19 |
12 |
|
3.2 |
Analyzing the deliverables |
15-Apr-19 |
05-May-19 |
20 |
|
3.3 |
Development of the various functions and departments |
06-May-19 |
27-May-19 |
21 |
|
3.4 |
Allocation of costs and budgets |
27-May-19 |
16-Jun-19 |
20 |
|
3.5 |
Setting up the office requirements and hiring the required employees |
16-Jun-19 |
25-Jun-19 |
9 |
|
3.5.1 |
Development of placements and pay structures |
25-Jun-19 |
30-Jun-19 |
5 |
|
4 |
Bring the plans into actions |
01-Jul-19 |
30-Jul-24 |
1856 |
|
4.1 |
Engaging in adequate advertisements and promotion facilities |
01-Jul-19 |
27-Jul-19 |
26 |
|
4.2 |
Measuring the success of the advertisements and re-enforcing the plan at large |
28-Jul-19 |
28-Aug-19 |
31 |
|
4.2.4 |
Final execution and set up of the subsidiary |
28-Aug-19 |
30-Sep-21 |
764 |
|
4.3 |
Review period |
01-Oct-19 |
30-Sep-24 |
1826 |
|
4.3.1 |
Reviewing 1( after 1 year) |
01-Oct-19 |
03-Oct-20 |
368 |
|
4.3.2 |
Reviewing 2 (after 1 year) |
05-Oct-20 |
01-Oct-21 |
361 |
|
4.3.3 |
Reviewing 3 (after 12 months) |
01-Nov-21 |
01-Nov-22 |
365 |
|
4.3.4 |
Reviewing 4 (after 12 months) |
02-Nov-22 |
01-Nov-23 |
364 |
|
4.3.5 |
Reviewing 5 (after 6 months) |
03-Nov-23 |
30-Apr-24 |
179 |
|
4.5 |
Collection of the earnings at large |
1-May-24 |
30-Jul-24 |
90 |
|
5 |
Monitoring and Evaluation |
01-Aug-24 |
20-Dec-24 |
141 |
|
5.1 |
forming the checklist |
01-Aug-24 |
07-Oct-24 |
67 |
|
5.2 |
Managing Change in to the necessary aspects |
08-Oct-24 |
30-Oct-24 |
22 |
|
5.3 |
Reporting to management in Australia |
01-Nov-24 |
30-Nov-24 |
29 |
|
5.4 |
Making relevant corrective measures |
01-Dec-24 |
12-Dec-24 |
11 |
|
Project Activities |
Start date |
End dates |
Duration |
|
|
1 |
Collection of adequate data for the purpose of expansion |
02-Jan-19 |
15-Feb-19 |
44 |
|
2 |
Gathering adequate resources for the purpose of expansion |
16-Feb-19 |
02-Apr-19 |
45 |
|
3 |
Project Plan development |
03-Apr-19 |
30-Jun-19 |
88 |
|
4 |
Bring the plans into actions |
01-Jul-19 |
30-Jul-24 |
1856 |
|
5 |
Monitoring and Evaluation |
01-Aug-24 |
20-Dec-24 |
141 |
9.2 Monitoring of Action Plan
The monitoring and evaluation plan has been given as follows:
The given monitoring and action plan will be largely based on the objectives which have been set out for the Semantic Software at large.
|
Objectives |
Person responsible for monitoring |
Time frame |
Key performance indictor to be analyzed |
|
Global market presence by 10 percent within the next 2 years |
The marketing manager Country head International finance manager |
The achievement of this objective will be monitored every 6 months. |
Market share Revenue per year Sales incurred per year. |
|
Reducing cost of operations |
Financial managers Quality managers |
This objective will be evaluated every 3 months |
Costs incurred per year The net profit |
|
To cover 40 percent of the Chinese market |
Chinese country head Marketing head |
The objective will be evaluated after 2 years of the expansion into the Chinese market |
Market share per annum Sales incurred in China |
|
To become a market leader |
Marketing head Business head |
This objective will be measured once every 2 years |
Net margin Net sales |
Conclusion
Therefore from the given analysis it can be rightfully stated that when a company looks out for international expansion it needs to ensure that it is successfully able to chalk out an expansion plan which shall cover the different essential activities as well as the objectives that the company is required to cover in the long run. Once the company is successfully able to do that, then the company can ensure that it executes its plans effectively so as to ensure that it is able to become successful.
7.0 Marketing mix
An unplanned expansion can bring about extensive loss to the company and moreover have a long term impact on the brand name of the company. The given plan identified that Semantic software’s is a company present in Australia which deals in products related to business data and Artificial intelligence, whose services when availed by the different companies will help them to optimize their business and thereby ensure that they gain a larger market share. The report followed a structured format whereby the different aspects of an integrated Project plan were covered.
The first part of the report provided a brief introduction into the overall aim of the report along with the scope it aims to achieve. This was then followed by the Research methodology. The research methodology stated down the type of data being for the report. The third part of the report was a Situational Analysis which covered a brief analysis of the company which was then followed by the market analysis and the nature of demand as present. The product category along with the life cycle were also identified. To understand the Market well as PESTLE Analysis was conducted and this was followed by the Competitor Analysis.
The Situational Analysis was followed by the SWOT Analysis which laid down the internal strengths as well as the weaknesses followed by the external opportunities as well as the threats which the company faces. The objectives were laid down followed by the recommended market strategy whereby it was suggested that Semantics software should enter by the way of opening a subsidiary in the designated market. The latter half of the report presented the Marketing mix strategy as well as the tactics which are required to be adopted by the company. The Planning budget and implementation plan has also been provided. If Semantics Software’s follows this Implementation plan and budget carefully it will then be able to ensure long term success.
References
Akpoyomare, O. B., Adeosun, L. P. K., & Ganiyu, R. A. (2013). Approaches for generating and evaluating product positioning strategy. International Journal of Business Administration, 4(1),
Amin, S. (2014). Capitalism in the age of globalization: The management of contemporary society. Zed Books Ltd..
Baker, M. J., & Saren, M. (Eds.). (2016). Marketing theory: a student text.
Bavota, G., De Lucia, A., Marcus, A., & Oliveto, R. (2013). Using structural and semantic measures to improve software modularization. Empirical Software Engineering, 18(5), 901-932.
Bresler, M., & Lubbe, I. (2014). Marketing management.
ations, challenges, and opportunities with china perspective. IEEE Internet of Things journal, 1
Chernev, A. (2018). Strategic marketing management. Cerebellum Press.
Chui, M., & Francisco, S. (2017). Artificial intelligence the next digital frontier?. McKinsey and Company Global Institute, 47.
Coeurderoy, R., & Murray, G. (2014). Regulatory environments and the location decision: Evidence from the early foreign market entries of new-technology-based firms. In Location of International Business Activities (pp. 226-260). Palgrave Macmillan, London.
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
8.0 Budget
Curtis, C. C., Lugauer, S., & Mark, N. C. (2017). Demographics and aggregate household saving in Japan, China, and India. Journal of Macroeconomics, 51, 175-191.
Doz, Y. L. (2017). Strategic management in multinational companies. In International Business (pp. 229-248).
Ellinger, A. E., & Ellinger, A. D. (2014). Leveraging human resource development expertise to improve supply chain managers’ skills and competencies. European Journal of Training and Development, 38(1/2), 118-135.
Foxall, G. (2014). Strategic Marketing Management (RLE Marketing). Routledge.
Herrerias, M. J., Joyeux, R., & Girardin, E. (2013). Short-and long-run causality between energy consumption and economic growth: Evidence across regions in China. Applied Energy, 112, 1483-1492.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach.
hofstede-insights.com. (2018). Country Comparison – Hofstede Insights.
Kaliappen, N., & Hilman, H. (2013). Enhancing organizational performance through strategic alignment of cost leadership strategy and competitor orientation. Middle-East Journal of Scientific Research, 18(10), 1411-1416.
Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), 1109-1126.
Li, B. H., Hou, B. C., Yu, W. T., Lu, X. B., & Yang, C. W. (2017). Applications of artificial intelligence in intelligent manufacturing: a review. Frontiers of Information Technology & Electronic Engineering, 18(1), 86-96.
Li, L. (2018). China’s manufacturing locus in 2025: With a comparison of “Made-in-China 2025” and “Industry 4.0”. Technological Forecasting and Social Change, 135, 66-74.
Lii, Y. S., Wu, K. W., & Ding, M. C. (2013). Doing good does good? Sustainable marketing of CSR and consumer evaluations. Corporate social responsibility and environmental management, 20(1), 15-28.
Liu, Q., & Zhang, D. (2013). Dynamic pricing competition with strategic customers under vertical product differentiation. Management Science, 59(1), 84-101.
Malhotra, N. K., & Peterson, M. (2014). Basic marketing research.
Marshall, G. (2014). Marketing management. McGraw-Hill Higher Education.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, 17-44
Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, 62-73. https://doi.org/10.1016/j.indmarman.2018.01.029
Ransbotham, S., Kiron, D., Gerbert, P., & Reeves, M. (2017). Reshaping Business With Artificial Intelligence: Closing the Gap Between Ambition and Action. MIT Sloan Management Review, 59(1).
Rodrik, D. (2014). The past, present, and future of economic growth. Challenge, 57(3), 5-39.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Shamma, H., & Hassan, S. (2013). Customer-driven benchmarking: A strategic approach toward a sustainable marketing performance. Benchmarking: An International Journal, 20(3),
Shiau, H. L., Huang, C. J., & Chen, F. C. (2013). International Involvement, Target Market Selection, and Consolidated Performance: A Firm-Level Analysis of Taiwan’s FDI in China. Emerging Markets Finance and Trade, 49(sup4), 184-196.
Su, B., Heshmati, A., Geng, Y., & Yu, X. (2013). A review of the circular economy in China: moving from rhetoric to implementation. Journal of Cleaner Production, 42, 215-227.
Tayar, M., & Jack, R. (2013). Prestige-oriented market entry strategy: the case of Australian universities. Journal of Higher Education Policy and Management, 35(2), 153-166.
Tong, J., & Zuo, L. (2014). Weibo communication and government legitimacy in China: a computer-assisted analysis of Weibo messages on two ‘mass incidents’. Information, Communication & Society, 17(1), 66-85.
Top500.org. (2018). Market for Artificial Intelligence Projected to Hit $36 Billion by 2025 | TOP500 Supercomputer
China’s AI industry gains momentum: Report – USA –
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy.
worldview.stratfor.com. (2018). In China, an Unprecedented Demographic Problem Takes Shape.
Zhong, Y. (2015). Local Government and Politics in China: Challenges from below: Challenges from below. Routledge.
Zorn, T. E., Grant, S., & Henderson, A. (2013). Strengthening resource mobilization chains: Developing the social media competencies of community and voluntary organizations in New Zealand. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24(3), 666-687.