Trusted Supply Chains Case Study

Trusted Supply Chains
Trusted Supply Chains

Trusted Supply Chains- Client Report: Sanken Power Systems (UK) Product

Order Instructions:

A3 Report Structure

Client Requirements
To undertake a study to create a Strategic Evaluation of the market structure for Sanken BR200 device in the European Telecommunication Market.

This study shall strengthen the projects potential to:

• Establish a target market in the European telecommunication industry.
• Approach nearest potential customers.
• Identify if the BR200 fits in the telecommunication industry.
• Identify the companies tier position in relation to the telecommunication market.

Deliverables

• Examine the tools that are required to enter the telecommunication market and establish a target market to approach the nearest potential customers, by looking at:
• Market Research
• Market Segmentation
• Evaluating the company’s BR200 device and their current position in the market, by looking at:
• Porters Five Forces
• PESTEL analysis
• SWOT analysis
• Determine the supply Chain tiering through mapping the process, by looking at:
• Value Chain Mapping
• Supply Chain Segmentation
• Supporting Theory
• Objective Based:
• Market Research Hague, Paul (2004) –Market Research is used in business models and frameworks to gather information that can be either qualitative or quantitative, to draw a clear picture of the current market structure. Such as surveys provide vital information to assess the market size and competition.

• Market Segmentation Malcolm McDonald (2012) Market Segmentation is dividing the target market into segments in which each customer in the segment share common interests. Therefore, a more narrow focused strategy can be designed and dedicated towards achieving customer’s needs. This method is used to identify the potential customers in the market.

• PESTEL Analysis Jim Downey (2007)–Is assessing the Political, Economic, Social, Technological,Environmental and legal variations in the business environment. This method can be used to provide important information for Sanken to look for new potential opportunities in Europe and take into consideration any possible limitations.

• Porters Five Forces Tony Grundy (2006) – This model can be used by Sanken to set up strategies to explore opportunities that lie within the Telecommunication market, such as mapping the competition and market attractiveness. This model includes threats of new entrants, the threats of substitute products or service, the bargaining power of suppliers, and the intensity of competitive rivalry.

• Value Chain Mapping Mike Morris (2001)–To examine all the value addedactivities that take a product from the beginning process until it finally reaches the customer. It is also used to look deeply into refining the process to make it more efficient.

• Supply Chain Segmentation Douglas Thomas (1996)–Segmentation analysis enables Sanken to focus on specific key sectors to create a tier, as well as build supply chain resources, knowledge and competencies in any division to successfully meet customers’ demands in the market.

• SWOT Analysis Andrews et al (1969) – This tool is used to summarize and analyse the overall strengths, weaknesses, opportunities and threats of the project. To draw a clear picture for the decision makers to consider different aspects of the project as well as organize their thought process.

Table of Content
1.0 Client Aim and Objectives
2.0 Supporting Theory
2.1 Objective 1
2.1.1 Market Research
2.1.2 Market Segmentation
2.2 Objective 2
2.2.1 Porters Five Forces
2.2.2 PESTEL Analysis
2.2.3 SWOT Analysis
2.3 Objective 3
2.3.1 Value Chain Mapping
2.3.2 Supply Chain Segmentation
3.0 Gantt Chart
3.1 Gant Chart Methodology
4.0 Contribution
4.1 Market Analysis
4.2 Shakeholder analysis
4.3 (Add+ )
4.4 ( Add+)
5.0 Reflection
6.0 References

What is the aim of the Client Project?
Client: Sanken Power Systems (UK) Products, Bridgend South Wales
• The purpose of the report is to show the client Why you would use the methods identified.
• What is the (strategic) reason/rationale/motivation for this project? i.e. what is the range of problem(s) or issues involved?

• Consultants(ME) need to submit a report that clearly shows and explains How? they would do the study.
• A Client wants to do something new and needs a study to identify whether it is possible and or desirable e.g. Launch Sanken’s BR200 into a new market.
• For example when talking about the analysis tools i.e. PESTEL analysis discuss only why this tool is relevant to the study and why it needs to be used. Do not explain each and every Stage!
• Create a Gantt Chart and dicuss its methodlogy
Deliverable:
Consultants need to produce a 6,000 word report outlining the main objectives of the study and the methods that would be employed – following the A3 report structure provided.

SAMPLE ANSWER

Trusted Supply Chains

Trusted Supply Chains— Client Report: Sanken Power Systems (UK) Product

The rise in amount of information transmitted and received has promoted the rapid proliferation of ICT services and gadgets such as cloud services and smartphones (Walkenhorst et al., 2009, n.p). In response to these emerging trends, the devices used in control power supply for the DSPs, MCUs, and FPGAs that constitute the core elements of these emerging ICT gadgets must equally be able to support much higher output currents and lower voltages (Hilmersson and Jansson, 2012, n.p). Therefore, the DC/DC converters commonly used in control power supply should have high current and low voltage specifications as well as a fast response to the rapidly changing loads. The non-isolated step down converter module which is the new BR200 series produced by Sanken features a line-up of seven products all with an output current of either 20 A or 10 A perfectly fits this specification.

  • Client Aim and Objectives

Aim:

To undertake a study to create a Strategic Evaluation of the market structure for Sanken BR200 device in the European Telecommunication Market.

Objectives:

  1. To Examine the tools that are required to enter the telecommunication market and establish a target market to approach the nearest potential customers
  2. To evaluating the company’s BR200 device and their current position in the market
  3. To determine the supply Chain tiering through mapping the process

2.0 Supporting Theory

Sanken is a top global supplier of semiconductor products with their core business being that of semiconductor power devices. Although most of their power devises are widely used in the Automobile industry, the company eyes an opportunity in the Telecommunication industry especially for its BR200 device. The reason for this kind of inclination is motivated by the fact that optical communication is becoming increasingly popular and as such, Sanken needs to engage deeper into the optical systems (Dolnicar and Lazarevski, 2009, p. 360). Moreover, Sanken’s BR200 device is a key component in the telecommunication industry and thus the need for the company to establish the type of component required within the network loop (Hilmersson and Jansson, 2012, n.p). Sanken must establish if their BR200 equipment is appropriate in the telecommunications sector and consequently identify a target market for it within the European market.

Apparently, Sanken postulates that the telecommunications market opportunities largely lie in the major European market players such as Ericsson and Fujitsu. However, the company still beliefs that there is potential for expansion through identification and entry into new markets. The success of venturing into new markets will greatly depend on the capacity of the company to access and acting upon reliable market information (Fabling and Sanderson, 2013, p. 428). Information is particularly needed to narrow down on potential customers, understand their position within the telecommunications market for the purpose of positioning themselves in the supply, and as a basis for approaching their nearest customer to engage with within the supply chain in telecommunication.

Sanken Power Systems (UK) Ltd seeks for the services of a reputable and reliable supply chain company. The PackIT Logistics limited is a leading supply chain based in Cardiff, South Wales and providing efficient services in warehousing, order fulfilment, storage, sock management and distribution, E-Commerce Fulfilment customer service, back office systems, account management, data management services, contract packing, and response management in a range of businesses and industries across UK and internationally.

In the case of Sanken, it is necessary that appropriate information is provided to enable the company master the complexities of the telecommunications market. Market information will focus on investment, customer base, competitiveness, and market entry strategies (Baldwin and Yan, 2012, n.p). Telecommunication market in Europe is characterised by high dynamism in terms of technological innovation cycles, product differentiation, quality improvement, and high capital intensity (Haveman,  2013, p. 602).

The BR200 series consists of a line-up of non-isolated step-down converters that can offer a fast response to any changing loads making it easy to mount. These types of converters offers a stable supply of power output to the MCU, DSP, and FPGA components, whose loads have rapid fluctuates. It also allows high-intensity mounting and in turn facilitating the development of more compact equipment (Wright and Larsen, 2014, p. 171). As such it presents as a competitive alternative to most of the current devises that lacks these essential aspects.

2.1 Objective 1

To examine the tools that are required to enter the telecommunication market and establish a target market to approach the nearest potential customers2.1.1

Market Research

Market research is a key consideration when evaluating a new market or product. Research is essential in providing Sanken with the data and information that will enable the company make viable decisions about venturing into the new market. Indeed, the company requires a combination of both primary and secondary research in order to obtain the required data (Rudež et al., 2013, p. 131). The principle aim of the market research is to identify a competitive landscape for the BR200 device in terms of the understanding competitors marketing approaches, pricing structure, as well as strengths and weaknesses.

As Quinn, (2009, p. 272) notes, one of the areas that require market research before venturing into the new market is on market trends. According to Jae Young et al., (2013, p. 290) an analysis of the industry trends is very necessary as a basis for forecasting postulated levels of sales in the potential market. Market trends offer a comprehensive guide to potential market size growth prospects. This offers a strategic market analysis of factors influencing the market, demand, and companies including distribution and supply chain factors, pricing, new product development and introduction, and economic issues.

Regarding trade regulations Sanken must be aware of all the legislative requirements that they need to comply with for smooth running of the business (Dibb and Simkin, 2009, p. 376). Additionally, other considerations when venturing into the new market are technical standards desired in the new market and product safety as well as any rules or regulation in exercise in these markets or countries. Again, it is very crucial that tariffs and duties for the particular electronic devices be considered. A wide range of laws and guidelines within the country or market of destination must be first met before the BR200 device can enter the new market. To ensure market success, the design and usability of the device must satisfy the end user’s desires and expectations. Telecommunications industry is largely driven and characterized by innovation (Min et al., 2008, p. 16). Consumer needs, expectations, and behaviour are constantly evolving. Market research is therefore, very necessary to determine exactly what is required in the market and how best to deliver it. This entails reviewing of designs and market information about the product being introduced. This must include product viability and usability in the potential market as well as the safety of the electrical device to ensure that they are ready for the market.

2.1.2 Market Segmentation

In order to compete successfully in today’s’ competitive and volatile business markets, companies must attack niche markets exhibiting unique wants and needs. Battisti (2013, p. 41) defines market segmentation as a process of grouping customers into homogeneous groups or categories in order to optimize on the use of resources and to increase efficiency in terms of distribution, pricing, product adoption, branding, and communication. The principle purpose of market segmentation For Sanken is to reflect on some aspects that are being faced by the telecom industry. This is necessary since venturing into new telecom markets requires proper consideration of huge amounts of data from various sources such as banks, online shops, and insurance about potential customers.

`Market segmentation is the foundation upon which the other activities in analysing of the potential market are based (Schlager and Maas, 2013, p. 45). It requires major commitment on the part of the management to facilitate customer-oriented research, planning, and implementation and control. By and large, the use of the market segmentation information is bound to improve the company’s competitive advantage putting it in a better position to serve the needs of their customers.

Market segmentation analysis entails segment identification, market selection, and strategic positioning (Juan, 2014, p. 88). Segment identification involves establishing based on selected segmentation criteria and variables a given number of similar market segments say in terms of justifiable size, accountable, profitability, and customer-focused segments. To specify on market opportunities, it is crucial to make strategic choices concerning corporate objectives, financial and technical resources available, competitive opportunities, and customer needs. Positioning is a key factor in ensuring that the company carves out on a market niche. This involves searching out unique advantages, seeking new market segment not being cultivated by competitors, and then develop new approaches to these old problems. Positioning should be based on both real sources such as quality and superiority and intangible factors like reputation to gain competitive advantage for the company (Kuen-Hung et al., 2013, p. 722).

Market segmentation analysis has the capacity to enhance responsiveness of products so as to meet the needs and conditions of the marketplace (James and Raee, 2013 p. 32). The process facilitates the developing cost-efficient and effective promotional tactics and campaigns. Through market segmentation analysis, it will be possible to gauge the company’s market position in the potential markets and customers in relation to the competition. In this context, the company is able to plan for its business strategies in the entry of the new market. When launching the new venture it is very critical for Sanken to identify and understand the type of companies they are targeting and how well to reach them. Therefore, conducting a market segment analysis is necessary for focusing the new product to the most promising segment.

2.2 Objective 2

To evaluate the company’s BR200 device and their current position in the market
2.2.1 Porters Five Forces

The Porter’s five forces model is a framework used for the analysis of the business strategy development. It describes five forces that highlight the competitive intensity and attractiveness of the market as; bargaining power of customers, threats of new entrants, threats of substitute products, bargaining power of the suppliers, and competitive rivalry within the industry. These factors are referred to as the micro-environment and have direct impacts its ability to make profits and serve its customers (Lamore et al., 2013, p. 701). Any changes in these factors require that the company reassesses its marketplace. The model will be used to analyse the attractiveness of the European telecommunications industry.

The five forces analysis will facilitate the understanding of a factors impacting profitability in the telecommunication industry in terms of developing competitive strategies and to increase capacity in the market. It is specifically ideal for the EU market since there are more than three competitors (Al-Araki, 2013, p. p. 230). As Lorca-Susino (2014, p. 33) argues, it is effective in several other ways including establishing the impact of the government on the industry and considering the lifecycle stage of the industry as well as considering the dynamic characteristics of the specific industry. It is an effective tool for identifying and analysing the competitive position and strength of the company within the particular market.

The theory is based on the perspective that there are five basic drivers that determine the competitive attractiveness and intensity of a market (Kaufmann and Roesch, 2012, p. 9). The model helps to identify areas where power lies within a given business situation in this case the case being that of the position of the Sanken Power Systems within the European market for their BR200 device. This is a significant step since it will help in understanding the strength of the company’s current competitive position as well as the strength of a new business opportunity that it may look to move into. The model in this case will help to understand if the introduction of a new product in a new market is potentially viable and profitable. The theory is also effective in identifying and understanding where power lies and areas of strength as a basis for the strategic move in a new market.

2.2.2 PESTEL Analysis

The PEST analysis of Sanken will be used as a strategic tool to analyse the external environment in which it operates (Global Semiconductor Industry, 2013, n.p). It is an acronym for political, economic, social, and technological factors. These factors play a very crucial role in the value creation opportunities of the company’s strategy. However, these factors are usually outside the company’s control and must be considered as either opportunities or threats.

PESTEL analysis helps to show the big picture of a company’s external environment especially ones related foreign markets (Ghazinoory et al., 2011, p. 24). It helps gain a better understanding of the potential opportunities and threats likely to be faced when venturing into new markets. It aids in building a better vision of the development or expansion of business and ways in which the company can compete profitably. It analyzes for market growth or decline and as such the potential, position, and direction for the business. These factors are particularly important when the company is planning into entering into a new market as is the case with Sanken. This is achieved through creating insight into market status of key flatness of the market, both in terms of the future and present trends.

The first step in making the most out of the PESTEL analysis is to consider the relevance of each of the six factors in the analysis to the business context (Briciu et al., 2012, p. 147). The second step involves identifying and categorizing the information applicable in these factors. Finally, the data should be analyzed in order to draw conclusions (Nunan and Di Domenico, 2013, p. 7).
2.2.3 SWOT Analysis

When launching a new product it is very critical that the company evaluates the four pillars related to marketing; place of sale, promotion, product, and price of sale (Millson, 2013, p. 1). For successful analysis of these factors it is necessary to analyze the external and internal factors of the company which will in turn help in maximize the opportunities and strengths while minimizing on the threats and weaknesses. New products ought to be developed around two concepts of satisfying the demand or need of a specific target market and with a selling benefit (Simoneaux and Stroud, 2011, p. 75). A weakness related to launching a new product may not necessarily mean that something is wrong with the product, it might instead be signalling the advantage that the competition has over the company. Developing a new product implies an opportunity for the company in the market (Quinn and Dibb, 2010, p. 1244). As such early influencers and adopters are companies who like to try the hottest new product and to tell others their experience with it. This will allow the company to set prices appropriately. Once the new product has been introduced in the market, the competitors will likely react. In this case Sanken is likely to face a great threat after launching their BR200 by competitors changing the playing field. In this regard, it is critical that Sanken has a backup plan for the promotion, distribution channels, and pricing of the product in readiness to respond to competitor changes.

Harwood and Ward, (2013, p. 252) postulate that the SWOT analysis examines the business’ strengths and weakness, as well as threats and opportunities in the potential market. By focusing on these key factors that are likely to affect the business in the new market, the analysis provides a clear basis for establishing the business performance and prospects. The reviewing of the potential business performance will motivate action (Dobbs, 2014, p. 32). The analysis is an effective step towards identifying how successful the new market or product can do through the analysis of the favourable and unfavourable conditions in the potential market. SWOT analysis is a strong basis for planning when undertaking a major business venture (Min et al., 2008, p. 22). The system combines environmental analysis information and separates it into two components. This level of analysis facilitates the company to determine the factors likely to aid in the achievement of some specific objectives or on the obstacles to be overcome before the company can achieve the desired outcome.

2.3 Objective 3:

To determine the supply Chain tiering through mapping the process

2.3.1. Value Chain Mapping

It requires a great deal of resources in terms of finances and time to launch a new product effectively, quickly, and ahead of the competition. An efficient launching of the BR device requires coordination and integration along the chain for the purpose of product design, planning, and manufacturing, procurement, sales and marketing. A value chain strategy in this case is the crucial collaboration of the various functions of the business, primary and support activities with the aim of meeting a certain business objective (Ereaut, 2002, n.p). Value chains are a leading-edge business strategy that guides every participant to contribute to creating value for consumers (Kahn and Kahn, 2010, n.p).

Value chain mapping describes activities that take place within a business and relates them to an analysis of its competitive strength (Competitive Market Analysis, 2009, n.p). The primary activities are those that concern directly with creating and delivering a product while support activities are those that are not involved in the production directly although they may increase efficiency and effectiveness.

By conducting a value chain analysis the Sanken will be able to introduce the BR200 device through involving the management in creating value, deciding the way communication is to be handled, ensuring volatile supply and demand, and chain efficiencies and risks (Market Selection, 2013, n.p). Value chain mapping is an effective means of developing a differentiated product, whole chain marketing, and ensuring consistency of supply.

2.3.2 Supply Chain Segmentation

Proctor (2010, p. 86) postulates that supply chain segmentation is the designing and operating distinctly the different end-to-end value chains form suppliers to customers and optimized through a combination of unique product attribute, business value considerations, customer value, and manufacturing and supply capabilities. It is the dynamic alignment and integration of customer channel supply and demand response capabilities that are optimized for net profitability for each segment (John 2014, n.p). The prevailing fierce completion in the telecommunication industry coupled with the economic downturn across Europe has necessitated the need for businesses to tackle some of the most conflicting challenges of reducing costs and driving growth through innovation (Presutti and Mawhinney, 2013, n.p). Traditionally, the aspect of sales has always been assigned to the marketing function while that of cost reduction is directed towards supply chain. Business alignment is geared towards developing congruence between the supply chain, marketing, and product strategy.

Supply chain segmentation is an effective approach towards mapping the end-to-end supply chain in order to provide visibility within the different segments of the business. Segmentation helps to identify the scope of integration for active management by the supply chain organization (De Backer and Miroudot, 2014, n.p). It is an easy way of identifying the primary customer for the supply chain organization. Segmentation in this case will serve a strategic purpose by reflecting what is important to the growth and profitability of the new product. This approach also gains the much needed internal support to drive the new venture. Sectoring the supply chain is strategic in that it facilitates support for company plans as well as maximizing growth and returns for the new business. In this way, resources are aligned where they are most needed.

According to (Yeates et al., (2010, n.p) value-based approach segments customers on the basis of economic value. The segmenting highlights characteristics in each of the segments. For instance, the company can look at areas where customers in each of the segments differ from others in terms supply chain service. This information can then be used as a basis for strategizing on the entry approach. A needs-based segmentation matches well with the management of supply chain (Lymbersky, 2008, n.p). In this case segmentation is done on the basis of driver that clients have for a specific supply chain service. Clients are categorized in terms of the common set of needs they share. The purpose is to match each sector needs with the current supply chain service. This would guide in enabling the company deliver services in each sector better than the competitors does and as such earn a competitive advantage. Segmentation is, therefore, a very effective approach to understanding Sanken’s supply chain for the purpose of venturing in to the new market. It will enable the company to focus attention and attention in segments where they can create value and provide strategic support.

  • Gantt Chart

3.1 Gant Chart Methodology

Gantt charts provide clear illustrations of the status of a project. To complete the venture successfully, Sanken will need to control a large number of activities in order to ensure that they are completed within schedule. This is to avoid knock-on effects on other activities in case some of the tasks in instances where deadlines are missed or tasks are finished out of sequence causing late delivery of products and more costs for the company (Market Entry Strategies, 2013, n.p). Gantt charts will convey this information visually and effectively by outlining all the tasks involved in the venture, and their order which are shown against a timescale. This clearly highlights overview of the venture as well as its associated tasks and when these tasks need to be accomplished.

Glowik (2009, n.p) notes that a Gantt chart helps to work out practical aspects of the venture in terms of the minimum time required for covering a given task and which activity needs to be completed before others can start. This information will then be used to determine the critical path; the sequence of activities that must first be individually completed on time if the whole venture is to deliver on time. Additionally, the Gantt chart will be used to inform the relevant teams informed of the progress.
4.0 Contribution
4.1 Market Analysis

Market analysis is the evaluation of the dynamics and attractiveness of a given market within a particular industry (Cayla and Paloza, 2012, p. 44). In the case of Sanken, a market analysis will form the basis for planning pertaining to the introduction of their new product in the telecommunications industry. Market analysis can be done in various dimensions such as market size, trends, growth rate, profitability, or industry cost structure, distribution channels, and key success factors. The goal of conducting the market analysis is to gain an understanding of the potential opportunities and threats and then relating them to the company’s strengths and weaknesses. Sanken will use the findings of the analysis guide their investment decision and in turn advance their success. The findings can also motivate the changing of certain aspects of its investment strategy.

In terms of the market size, the market volume presents the totality of the realized volume of sales within a given market (Wilkie et al., 2012, p. 957). This is dependent on the quantity of consumers as well as their consequent ordinary demand. Notably, the market potential is also a crucial factor for consideration which will provide the information concerning the potential for growth of the telecommunication industry. Examples of information that are key in determining market size are trade association data, company surveys, government data, and financial data from major players. Market trends entail evaluation of the upward and downward movement in a given market which offers information about new opportunities and threats. One of the ways of forecasting market growth for Sanken is through extrapolating the historical data into the future or through the study of market trends in complementary products. Analysis done through the Porter’s five forces will be important at this point in evaluating the attractiveness or profitability of the telecommunications market.

The most important factor for any company that plans on introducing a product in a new market is the pilot study. This clearly outlines the market situation in the new market or country, a picture of what to expect while venturing in.  However, most ventures still fail for some reasons. In most cases, companies will fail due to failure to do objective research, or to follow the guidelines outlined in the same. Failure may also emanate from the use of wrong communication, advertising, and advertising channels.  To achieve a successful launching in a new market, therefore, a proper set of processes that are based on research is a key factor to consider.

4.2 Stakeholder Analysis

Stakeholder analysis is the technique of identifying the key people that require to be won over. It involves working out stakeholder’s power, interest, and influence, in order to identify what to focus on (Alternative Market Entry Strategies, 2012, n.p). It is critical that Sanken develops a good understanding of the most important of the stakeholders. This will enable the company to establish how they are likely to respond and plan on how to win their support. By identifying the key people to work in the venture, Sanken will be able to make use of the powerful opinions that most of the stakeholders are likely to bring over to shape the venture at an early stage.

Apart from the possible support that stakeholders are likely to bring on board, their input is equally crucial since it can enhance the quality of the venture. Winning the support of stakeholders is an important consideration in the venture since it helps in anticipating people’s reaction towards the venture which is crucial to building into the company’s plan of action to win people’s support. Effective communication with stakeholders is essential in ensuring that they fully understand the significance of the venture and as such they will be willing to support when necessary.

4.3 Pricing in a New Market

The major objective of entering in to a new market is to increase profits. Pricing has huge impacts on the profitability of a product (Jolly, 2008, n.p). For this reason, the pricing strategy needs to be evaluated methodically before a final price can be reached. The four pricing strategies available for Sanken are the value-based pricing, market based pricing, cash-plus pricing, and the negotiation pricing (Murray et al., 2012, p. 56). In developing a pricing strategy it is very important to have a basic understanding of competitors as well as the level of competition. This enables the company to create value for themselves and for the customers. Choosing the right pricing strategy will, therefore, largely depend on how well Sanken understands the potential market they are venturing into.

Pricing in a new market is highly dependent on the market dynamics and prospects that exist in the host country (Halliburton et al., 2011, p. 95). As such, it is crucial that Sanken makes a deep market analysis through proper consideration of the pricing framework. Sales offices emerge as the most profitable for a Sanken to venture in to a new market. The company will have the opportunity to use the local knowledge and experience of sales teams and in turn reduce on contribution costs of the new product.

Pricing strategies will play a crucial role in determining the number of customers that are going to buy BR200 device. The pricing strategy adopted should be in a position to cover costs, grow market share, and earn reasonable profits for Sanken (Piercy, 2009, n.p). To grow the market share for instance will require that the company offers product selections at a price that will take the market away from the competitors. Cost based pricing entails adding up the total costs incurred to manufacture the product and then adding up the mark-up (Phan and Markman, 2011, n.p). Competitive pricing on the other hand entails matching prices of competitors for similar products. The other option is for the company to set high prices for the new product on the rationale that the attributes of the BR200 device are unmatched in the market.

4.4 Market Entry Strategy

Market entry strategy is an important factor when entering a new market. It is the planned method of delivering the company’s products to a target or potential market and distributing them there. It is very critical for Sanken to understand the preferences of the new customers as well as the management and business culture as a basis for identifying the best talent in driving new business in the new market. Morley (2014, n.p) contends that the different market entry models that are available for the company are upsala model, eclectic paradigm, industrial networks, business strategy, the agency approach, the bargaining power approach, or the transactional cost analysis theory.

Entering into new markets offers great opportunities to companies to increase their sales and enhance their brand awareness. The process of entering a new market requires proper analysis of the existing competitors and potential customers (Donadelli and Persha, 2014).

According to Allen et al., (2012, p. 212) entry plans involves a set of procedures that needs to be considered. First, is the process of selecting the market. In this stage, comparison is done of the different alternatives available in terms of market size, competitors, prices, technology available, as well as the consumer profiling (Collis, 2014 n.p). Secondly, consider the Go-to market strategy.  At this stage once the market has been identified a strategy to get into the actual market has to be developed. Models that can be use include the direct model, in-direct model, or the acquisition model (Using Business Analyses, 2014, n.p).

Markets that are much developed calls for the use of the direct model and requires more investment in terms of money and resources. The indirect approach entails partnering with a player who will support the growth and establishment of the business in that market. In this model, it is important to start with one or two partners as you familiarize with challenges and other factors in that market (Greenblatt, 2013, n.p). Acquisition approach is applicable for medium sized firms with stable firms, assets and management teams to enable them develop long-term decisions (Thomas et al., M 2012, n.p). This stage is crucial in facilitating the budget process for the whole process of market entry.

The fourth stage involves identifying the key customers for the BR200 device, prospecting as well as lead generation (Plötner, 2012, n.p). This is achieved by preparing a list of targeted decision makers and a marketing plan. A crucial consideration to make when planning at this point is the available revenue. Market entry mode is a fundamental decision for Sanken as it plans on entering into a new market. Sanken can choose between the exporting, agent, dealer, or sales office mode of entry. Entry timing is also very important for the company which is dependent on the type of the product, competition levels in the particular market, and the prevailing market factors. The market entry strategy for Sanken will map out the approach to follow in selling, delivering, and distributing the BR200 device in the new market.

5.0 Reflection

It is important to note that a company’s entry into new markets provides an opportunity to increase their sales and gain a wide view of the market dynamics as presented by the diversity. Several factors need to be factored in the process to start a business in a new market. First, the organization has to conduct a survey on the market and employ key models such as the PESTEL analysis tool and SWOT. Information gathered through these models gives an insight into the overview of what to expect in terms of competitors, customers, costs, and technology. For instance, in this case the introduction of BR200 device would be informed by vast market, stakeholder, and industry information gathered through market research, market analysis, and stakeholder analysis of the telecommunication industry within Europe.

Once information has been gathered on the opportunities, threats, and potential of the new market it is time to come up with an entry strategy.  The plan is to maximize on the potential and opportunities while minimizing the threats. Sanken will then be able to come up with a budget and guidelines into which approach of entry to employ. The company should avoid at all costs misconceptions concerning any factors when implementing the plan. Lack of proper survey and implementation plans could result to failing of the business. In this study, it was evident that the success of the plan to venture in to a new market with the new product for Sanken is dependent on the viability of the analysis of the telecommunication market.

References

Al-Araki, M 2013, ‘SWOT analysis revisited through PEAK-framework’, Journal Of Intelligent & Fuzzy Systems, 25, 3, pp. 615-625.

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