The market condition in the 21st century is challenging and competitive enough to create a hindrance for firms of any size big or small. Rivalry is one of the biggest challenges a business faces in the contemporary world. To survive in the competitive market, business organizations need to strategically use their resources and avail every opportunity that comes through their path. Hayward Tyler (Luton) a company in the UK is interested to expand their business in an international market and that market that can prove to be beneficial is the market of France. This paper focuses to evaluate situations and accordingly make discussions whether they should expand to France or not and if they will expand that what market entry mode they should opt for. The paper will be focusing on the environmental and competitive analysis of France so that Hayward Tyler can create the marketing strategy. The company should follow a marketing strategy that would help them create a sustainable competitive advantage. Additionally, an in-depth analysis of STP will also be provided so that the company can formulate its marketing strategy accordingly.
Hayward Tyler is driven by excellence in engineering, the company is known for the reliable and good quality motors and pumps, and is also known for the good quality service that supports their products and legacy of brands. The environment in which the company operates in the energy sector, and it is one of the demanding sectors increasing competitiveness. Especially in China, India, UK, USA there are around 2,300 BCPs and more than 600 nuclear pumps in power plants, the company provides long-term consistency and precision performance (Anon, 2020). The company focuses on the employees, they not only take care of the needs of the customers but also of the employees and this ideology has made the company consistently grow and perform and also provide quality service. Laufs, Bembom, and Schwens, (2016) postulated that taking care of the employees, customers and meeting the expectation are signs of a good company whether SME or a big firm.
Hayward Tyler thinks that they have expanded their business successfully in the USA, China, and India and now they want to look forward to expanding in one of the countries in Europe so that it will help them expand their business more. The reason, why France as a market has been selected, is because of the Brexit, second, it falls under European Union, thirdly, it is a developed country and hence the chances of earning profit will also be more, lastly, the company will get a wide platform to sell their products. Since 1958, France has been a part of the EU. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020). The company wants to expand so that it can expand its sales and increase its brand name.
There are a few things that Hayward Tyler should keep in their mind before expanding their business in France. The market of France needs to be evaluated properly, for getting a better business result. To do that the external environment of France needs to be analysed and that can be done with the help of PESTLE analysis along with that Porter’s Five Forces will also be used to analyse the competitiveness.
Political, economic, social, technological, environmental, and legal factors affect any country’s environment and the same is with France, these macro-environmental factors will be evaluated and help Hayward Tyler understand the factors that would prove harmful or useful in the path of their success.
Political Factor- France has a semi-presidential form of government (BBC News, 2020). Hayward Tyler might face issues related to corruption, stability in politics, and interference of the government. The political stability index of France according to the report published by The Global Economy, (2020) shows that in the year 2019 the index (political) of France was 0.32, this means that the political scenario in France is quite stable and will be an opportunity for Hayward Tyler. The score of France in the rule of law is 1.41, which might be a concern. The effectiveness of any government affects companies positively or negatively. In terms of the effectiveness of the government, the score of France is 1.38 as mentioned by The Global Economy, (2020), which will again be an opportunity for the company, and it is suggested that the company should use this opportunity to control the market of France. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020).
Economic factor- HaywardTyler wants to expand so that it can increase its sales, serve more customers, and increase its share in the market (Weforum, 2020). This is the reason why the company selects France as it will provide a huge spectrum of the market base. A report that has been published by the World Bank, (2020) shows that in the year 2019 the GDP of France was approximately $2.716 trillion. Approximately $42450 is the GNI of France (World Bank, 2020). The rate of inflation in France was 1.3% and so it was declared as one of the safest and most secured countries, where business can be done (Global Competitive Index, 2019). Since 1958, France has been a part of the EU. Initially, the UK was also a part of the Brexit but it has withdrawn itself which might affect the company to expand in the market of France at first (BBC News, 2020). But in 2020 (30th December), UK and EU again signed a pact for allowing free trade, which might be useful for Hayward Tyler (BBC News, 2020).
Social factor- The population of France according to the reports published by the World Bank in the year 2020 was 670,559,887 (in the year 2017). This will be an opportunity for the company as they will get a huge market base of customers, one reason being the high living standard of the people. There are a few things that Hayward Tyler should focus on if they want to increase their sales, these are the culture, arts, and tradition of France. In France, the rate of unemployment in the year 2020 was 8% as mentioned in the reports by The Global Economy, (2021). The effect of a pandemic might cause a certain amount of problems, though not major (WTO, 2021).
Technological factor- According to BBC News (2020), the French National Research Agency is a reliable source of advancement for the French government. The creative components may be beneficial to the firm. Throughout the world, France has been recognized as one of the most technologically advanced nations, notably in the fields of science, information technology, and space exploration.
Environmental Factors- Even thoughFrance is regarded as the most persuasive country on the globe, the government is unable to control climate-related challenges. The most common ecological difficulties include pollution of the air, water, and noise, as well as biodiversity double-dealing and other issues. To work in France, Hayward Tyler needs to respect the environmental rules (BBC News, 2020).
Legal factor- If the company plans to work in France, it’s critical to observe the Employment and Labour Act of 2021. Hayward Tyler should focus on the employees’ well-being by making sure that they receive proper compensation, a stress-free work environment, additional time pay, leave, a safe working environment, and many more. The French delegates can labor for up to 4.5 years straight without taking a break in the middle. In a week, the total number of hours worked is 35.
There are a few things that Hayward Tyler should keep in their mind before expanding their business in France. The market of France needs to be evaluated properly, for getting a better business result. To do that the external environment of France needs to be analyzed and that can be done with the help of Porter’s Five Forces (Bruijl 2018).
Rivalry- Rütschi, KSB limited, Pollard Pumps are some of the renowned pump and motor manufacturing companies present in France. These organizations are highly technologically advanced and provide excellent service. They have already built a strong customer base in France. And would provide a tough competition to Hayward Tyler, and so the company needs to be unique in the way they approach customers to survive. The services should be based on keeping in mind the French client specifically (Klapper, Biga-Diambeidou, and Lahti 2016).
The culture of every country is different (Adekola and Sergi, 2016), so Hayward Tyler should consider the culture of France before deciding anything. The company should collect all the information before entering France, it will help the company perform in a better way. The Hofstede model will be used to understand the cultural aspect of France in comparison to the UK.
This part of the paper will deal with the STP and the 4P’s of marketing.
Hayward Tyler needs to segregate its clients based on factors such as demographics, behavioural, geographic, and psychographic. In the case of geographic factors, Hayward Tyler should focus on the urban areas of France, because all the big companies and clients are based in urban areas. Coming down to the demographic segmentation, and behavioural segmentation the products that are sold by the company are motors and pumps and hence demographic segmentation will not be needed. The nature of the assistance and the appropriateness of the pricing make the most difference in the organization’s ability to attract clients. In the case of psychographic division, Hayward Tyler should concentrate on large and medium-sized businesses, partnering with clients and surveying them to determine what their needs are, as indicated by Miguel (2014).
The nature of the assistance and the appropriateness of the pricing make the most difference in the organization’s ability to attract clients. In the case of Hayward Tyler should concentrate on large and medium-sized businesses, partnering with clients and surveying them to determine what their needs are, as indicated by Miguel (2014).
By using the Upsala model it can be said that the Hayward Tyler is in the fourth stage of internationalization (Expansion of international sales). The organization has focused mostly on countries like India, China, the USA, and the UK so they know how to expand their brand in the international market as it has done before and was quite successful in it. The only thing they have to do is to do market research on France and very cautiously invest, to maximize sales (Forsgren, 2015).
Hayward Tyler needs to decide what market entry mode they need to use before entering the market (France). All the opportunities have been utilized in places like China, the USA, India, and the UK. Now the company needs a new market to grow their business. The sole reason behind the expansion is to maximize sales and improve their brand name in Europe. France is a developed nation and hence provides a big market to the company to sell their products (Erickson, 2017). The pact that has been signed by UK and EU has enabled free trade.
There are various ways by which a company can enter a market for instance- Exporting, authorizing, licensing, joint venture, foreign direct investment. Based on the external environment in France, it can be said that the market is a bit complex because the clients are different and their perspective is different so an effective approach should be selected to enter (Nippa and Reuer, (2019). By evaluating the market of France, it can be said that the joint venture market entry mode needs to be used.
Hayward should work together with various local businesses/firms/distributors of France so that they can easily reach the clients as the market of France is entirely new to them. The local forms/distributors know how to approach clients, and effectively deal with to maximize sales and profit. Moreover, they also know the norms and policies of businesses in France (Parameswar, Dhir, and Ongsakul, 2018). It will reduce the chances of risk. The French language should be used to communicate instead of English to make a more effective impact in the minds of the clients (Hollender, Zapkau, and Schwens, 2017). For the French clients the price, quality, and after-sales service matter a lot. In France no informal activities are allowed, everything needs to be legalized and carried on in a systematic way (Qunyong, 2017). Thus, the joint venture mode of entry will prove useful for Hayward Tyler.
Conclusion
Thus, it can be concluded by saying that UK-based motor and pump manufacturing company Hayward Tyler can maximize their sales and business in countries like France if they follow a proper marketing strategy. There are many markets entry modes but it is suggested that Hayward should follow the joint venture approach to enter the market. The company should also keep in mind the culture of the people in France, and use French as a language for communication. Finally, they should focus on the competitive pricing strategy, use traditional and online mediums to promote their products.
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