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Segmentation Targeting and Positioning Volkswagen

Segmentation, marketing, and positioning (STP) is an important concept and practice in marketing. A real life STP marketing case study example can help you understand what STP is and how it is applied by companies.

This article presents a segmentation targeting and positioning strategy example or STP example company. It also presents a segmenting targeting positioning example. It discusses market segmentation of cars and stp model marketing example, and is related to market segmentation for car industry, automotive market segments, automotive market segmentation, and marketing stp:

Psychographic segmentation of automobile industry
Geographic segmentation of automobile industry
Demographic segmentation of automobile industry
Behavioral segmentation of automobile industry

The article basically attempts to answer the question how do car companies segment their market (focusing on Volkswagen)? Here is the STP marketing example company essay preview:

Segmentation, Targeting and Positioning by Volkswagen

Introduction

Many successful companies across the world apply segmentation, targeting and positioning (STP) as part of their marketing strategies. Volkswagen (VW), a company that makes cars is one of the successful companies that apply STP. Established in 1937, the company manufactures several car brands including Volkswagen, Audi, Seat, Lamborghini, Skoda, Porshe, Scania, Man, Bentley, and Bugatti, (Volkswagen, 2018a; Bhasin, 2017; Volkswagen, 2018b). While its headquarters is in Wolfburg, Germany, the company has several branches and plants spread out in different parts of the world. This enables it understand and meet the needs of its global clientele in addition to affording it a robust distribution network. This paper briefly discusses segmentation and targeting before focusing on how Volkswagen has segmented its market, its target markets (segments), and how the brand is positioned.

Segmentation and Targeting

Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63). Philip Kotler, on the other hand, defines segmentation as the process of dividing a market into discrete groups of buyers based on factors such as needs or characteristics, behaviour, marketing mixes, or who might require different products (Rudani, 2010). A company’s market can be partitioned or divided based on different factors. Some of the bases commonly applied in segmenting a market are demographic characteristics (such as age, gender, religion, income levels, family size), behavioural characteristics (such as brand loyalty status, usage rates/consumption levels, benefits sought by the buyer, response to a product, and occupation), geographic characteristics (such as geographic location, cultural preferences, language, population type and density (urban, rural, exurban, suburban), time zone, and climate/season, and psychographic characteristics (such as values, beliefs, interests, attitudes, lifestyles, personality traits, social status).

Targeting, according to Bihani (2004), is the process of evaluating how attractive market segments are and choosing the segment(s) to enter. It involves making choices taking into consideration available and necessary resources. Firms have a number of options with regard to the targeting strategy to apply. The main targeting strategies that companies can apply are mass marketing, niche marketing, segmented marketing, and micromarketing (Strydom, 2005; Kotler et al., 2015).

Segmentation and Targeting by Volkswagen

Volkswagen applies segmented marketing and has its market partitioned based on a mix of psychographic, demographic, geographic, and behavioural factors to meet the specific needs of different groups of customers. The following section discusses Volkswagen’s market segmentation based on these factors.

Psychographic Segmentation and Targeting

Psychographic segmentation involves partitioning a market based on customers’ values, beliefs, interests, attitudes, lifestyles, personality traits, social status, or other psychographic factors (Camilleri, 2018). With regard to psychographic segmentation, Volkswagen has partitioned its market based on customers’ interests, values, social status, and lifestyles. In this regard some of the segments the company targets include consumers who simply need to move (or transport goods) from one place to another conveniently and affordably, sports enthusiasts, technical/engineering enthusiasts, and consumers who need luxury and comfort as will be discussed in the following paragraphs.

Vehicles such as the beetle, Polo, Golf, Jetta, Touran, and Volkswagen Amarok pick-up and are aimed at catering to the needs of consumers who simply need to move from one place to another (or transport goods) conveniently and without spending so much money; they simply wish to enjoy the utility value of a car (Schmid, 2013; Skema Business School, 2014). This customer segment include people who wish to use the car as a tool. Some customers in this segment may go for the compact cars such as the beetle, polo, and golf to conveniently move around while some customers may go for the Touran (family van) so that they can easily transport their families with relative comfort. ….

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Positioning of Volkswagen/ Volkswagen Brand Positioning

Market positioning, according to Wilkinson (2013), is the process of establishing the identity or image of a product or brand so that it is perceived in a certain way by consumers. Positioning relates to how the consumer perceives the product or brand in relation to other products or brands. It involves placing a product in such a way that it occupies a clear, distinctive, and favourable place, relative to competing products, in the minds of consumers in the target market (Walletzký, 2015). With regard to positioning, Volkswagen takes pride in being a leader in German engineering (which focuses on design precision and feel), and to this extent has in the past used the tagline “The Power of German Engineering” (Sherman, 2017). The company has also used the slogan “If only everything in life was as reliable as a Volkswagen” to highlight the brand’s reliability (Nevick, 2013)…

Conclusion

Volkswagen segments its market based on a mix of psychographic, geographic, demographic and behavioural factors to meet the specific needs of different groups of customers. With respect to psychographic segmentation, the company has segmented its market based on customers’ interests, beliefs, values, social status, and lifestyles. Some of the segments the company targets in this regard include consumers who simply need mobility, sports enthusiasts, technical/engineering enthusiasts, consumers who prioritise comfort, and individuals with high social status. With regard to demographic segmentation, VW segments its market based income level and age…

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Outline
Introduction
Segmentation and Targeting
– Segmentation and Targeting by Volkswagen
– Psychographic Segmentation
– Demographic Segmentation
– Geographic Segmentation
– Behavioural Segmentation
– Positioning of Volkswagen
– Conclusion
– References

Knec Business Plan Sample

A business plan acts as a road-map for a business and thus provides a guide on important elements of the business and the steps that should be taken to start and steer the business to grow. Coming up with a business plan is one of the requirements towards graduating with a certificate, diploma, or bachelor’s degree in many colleges and universities. As a student undertaking a Knec-accredited diploma course in Kenya, you will likely be required to write a business plan based on a pre-determined format – the business plan knec format.

For many students, writing a business plan is a challenge especially given that they do not really understand the concepts being examined knec. Learning how to write a winning business plan can be made easy with the help of a high quality business plan sample. In case you are looking for a Knec business plan sample or diploma in knec business plan sample, you have landed in the right place.

Knec Business Plan Sample

While a few Knec business plan samples have been posted on the Internet, most of them are clearly of very low quality, providing evidence that their authors did not really understand important and relevant business concepts.

Here is a Knec business plan example that is of high quality and from which you can learn and develop your own plan, whether for Knec or other examination or for practical use. You can be sure that the Knec business plan example is of high quality as it is based on a past sample that achieved an A grade.

Here is an example business plan for a boutique. While this business plan knec example may not exactly relate to the kind of business you are interested in, you have every reason to go through the sample as it will likely give you ideas of what to write in the different sections of your own business plan. By going through this business plan sample knec or sample business plan, you will also probably encounter and take note of the important concepts that are being tested and which many students are not aware of. With these concepts in mind, you are more likely to write a winning and practical knec business plan. Here now is the business plan knec sample.

Glamify Boutique Business Plan

Chapter One: Business Description

1.1 Background of the Owner

Stanley Brown, a 25 year old male with a longstanding passion for establishing and managing businesses, will be the sole owner of Glamify Boutique. Currently pursuing a Diploma in Business Management at XYZ University, Stanley has in the past been employed as a sales person in a mtumba (second hand clothes) business. With the three years of experience as a sales person in the mtumba business, Stanley has developed effective entrepreneurship, communication, and social skills. The education and entrepreneurship skills he has acquired from his college education will be instrumental in managing the business and evaluating its financial accounts. Together, the skills and experience from Stanley’s past employment and college education will be valuable in understanding, communicating with, and interacting with potential clients, employees, suppliers and other individuals associated with the business. Stanley’s robust educational foundation, coupled with two years of practical experience working in a boutique as a sales agent, gives him the confidence to navigate the challenges that he may encounter as an entrepreneur.

1.2 Business Name

The yet to be established business will be called Glamify Boutique. This name, which reflects the attraction the business products hopefully will earn users of the products, has been chosen to for its simplicity, uniqueness, and for its capacity to highlight the type of the business. As such, it will be easy for customers to remember the name of the business and possibly associate it with attractive, exciting, and enchanting looks.

Knec Business Plan Example

1.3 Business Location and Address

Glamify Boutique will be located in Awendo Town, Migori County, specifically within the central business district of the town. The chosen location is ideally within one of the buildings along Kisii-Migori road, in close proximity to Shivling Supermarket or within 400 meters from the town’s sole roundabout, which serves as the Arika Boda Boda Stage (Figure 1).

This location has been chosen because it is strategic in that the Kisii-Migori road is a main highway that connects multiple major town and is thus used by many people on a daily basis. Additionally, the site offers ample parking space for both potential customers and delivery vehicles, ensuring safety and security. The business will operate from a rented house. The envisioned business premise will consist of two rooms: a front room with a minimum area of 160m², overlooking Kisii-Migori highway, and a backroom, which will serve as a store, with a minimum area of 50m². The business will possess a postal address in Awendo town with the zip code 40405.

– Insert location image –

1.4 Form of Ownership

Glamify Boutique will be a sole proprietorship. It will be established, owned and managed by Stanley Brown.

1.5 Type of the Business

It is clear from the business name that Glamify Boutique will be a boutique. As such, it will focus on marketing fashionable clothing and accessories.

1.6 Product and Services

The primary focus of the business will be the retail of trendy, high-quality, brand-new clothing and accessories for boys and men. Specifically, the product range will include items such as t-shirts, trousers, shorts, sweaters, jackets, short-sleeved shirts, long-sleeved shirts, inner wear, hoodies, jumpers, suits, and footwear. Additionally, the business will offer a variety of accessories including belts, caps, socks, vests, watches, sunglasses, perfumes, backpacks, hats, wallets, turtlenecks, cuff-links, bows and ties,. The products on offer at Glamify Boutique will be meticulously selected to ensure that customers achieve a smart, fashionable, and distinctive look.

1.7 Justification of the Opportunity

Awendo town, with its substantial population of residents, stands as a crucial hub serving several smaller market centres and surrounding areas. The town has a catchment area with a radius of at least 13 kilometres. Serving as the headquarters of Awendo Sub-county and housing the prominent Sony Sugar company, Awendo town has a high and constantly growing population which contributes to its thriving economy. The town attracts both residents and visitors from surrounding villages, village centres, and even from other towns. The town’s population includes government employees, business people, bank employees (Equity Bank, National Bank, Kenya Women, and Post Bank), professional workers, digital economy workers (including freelance writers and online forex traders) and employees of Sony Sugar Company. These individuals undoubtedly seek fashionable clothing and accessories to enhance their appearance and style, driven by a desire to set themselves apart from how the general population look and dress.

Having first-hand experience living in Awendo area, the proprietor often encountered challenges in finding stylish clothing for himself and his male relatives. This personal struggle brought to light a business opportunity – the need for a well-stocked boutique specializing in fashionable clothing for men and boys. This realization of this gap in the market has been further confirmed by informal surveys conducted within the town, with a focus on the target market, by the proprietor. The results of the informal survey indicates that most existing boutiques predominantly focus on women’s clothes, are greatly understocked, or are poorly managed. As a result, many residents resort to online shopping or travel far away to major towns (Kisii, Migori, Kisumu, or Nairobi) to acquire high-quality, fashionable clothing for themselves or their male family members.

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An Organisation Owes 300000 Tax at 1.7.X4

Financial Statements: Revision Questions and Attempted Solutions

In business and accounting financial statements are important as they provide an overview of the organisation’s health and provide insight into the organisation’s cash flows, operations, and performance. The financial statements especially provide information on the organisation’s revenues, expenses, profits/losses, and debt. Based on this information, the business, through its managers or directors, can make financial, operational and other important decisions. The information may also help other parties including lenders, consumers, suppliers, and government agencies make decisions regarding whether and how to engage with the business. There are four main types of financial statements that are commonly used in accounting and business: cashflow statement, income statement, statement of financial position (balance sheet), and statement of retained earnings. Each of these financial statements has its purposes and complements the other statements in providing a more complete snapshot of the health of the business.

Owes £300000 Tax at 1.7.X4

Here are some revision questions relating to financial statements:

An organisation owes 300000 tax at 1.7.X4 and 450,000 at 30.6.X5. Its income statement for the year to 30.6.X5 includes a tax charge of £400,000. How much tax was actually paid in the year to 30.6.X5?
A company purchases a tangible non-current asset for 200,000. It has an estimated scrap value of 20,000 and an expected useful economic life of 10 years. What depreciation will be shown in the income statement for year 3? How would the non-current asset be shown in the statement of financial position at the end of year 3?
In case the asset is sold for 120,000 during the 4^th year, how will this affect: The income statement for year 4? The statement of financial position at the end of year 4?
What is the effect of sale of the tangible non-current asset on the company’s statement of cash flows?
Is it true that cash the lifeblood of the business?
What is the purpose of the statement of cash flows and how it supplements a statement of financial position and an income statement?
What are the controversies surrounding published statements of cash flows?

Find the attempted solutions here.

Common Resources and Capabilities Virgin Companies

Virgin companies – Strategy

Revision questions

1. What are the shared resources and capabilities shared by the separate Virgin companies? – common resources and capabilities Virgin companies.
2. Which business(es) should Branson divest from? What criteria should he apply in deciding the new diversification strategy to apply?
3. What changes do you recommend to the Virgin Group with respect to its its organisational structure and management systems?

Contents

Introduction
Resources and capabilities
Virgin companies shared resources and capabilities
Divesting criteria and businesses to divest
New diversification strategy and decision criteria
Organisational structure change recommendations
Management systems change recommendations

Richard Branson and the Virgin Group Case Study

Introduction

The Virgin Group was established by renowned entrepreneur, Richard Branson. The history of the group can be traced back to 1968 when Branson formed the Student magazine after dropping out of school. Over the years, The Virgin Group has grown to become a highly diversified organisation with operations in several industry segments and countries. The group so far operates in the UK, the United States, Australia, Russia, South Africa, and Canada among several others. Some of the areas the group mainly focuses on are Telecoms and Media, Music and Entertainment, Financial Services, Travel and Leisure, and Health & Wellness (Virgin Group 2017).

The Group boasts of owning hundreds of companies directly or through its subsidiaries. It also boasts of having holding companies in seven main business categories. In addition, it has a stake in several companies, such stake acquired through the formation of joint ventures with other corporations.

Virgin Group has a strong asset base and its success has partly been attributed to the reputation and celebrity status of its founder, Richard Branson. Some of the Group’s notable assets include its fleets of airplanes, trains, and megastores. In addition to these, it has several resources including a strong brand name, a good reputation, talented human resources, and finances. In combination, these resources have helped the group develop capabilities and competencies in different areas.

One of the resources shared by the Virgin companies is the Virgin brand… Read more…

The Role of Cost Information in the Pricing Decision

Pricing Decisions: The Role of Cost Information In the Pricing Decision

Prompt:

The Role of Cost Information in the Pricing Decision You are working in the management accounting department of ABC which manufactures a range of consumer electronics products. The current range comprises 50 different products and the company launches around 10 new products every year.

Your manager has asked you to write a paper which addresses issues relating to pricing decisions for all the company’s products, with a particular focus on the prices set for new products.

The current approach used by the company is a cost based approach by which a predetermined percentage is added to the estimated full cost of the product. However the directors of the company have recently questioned this approach.

You are required to discuss the following in your paper:

The role of cost information in the pricing decision.
The advantages and limitations of the company’s current approach.
A range of alternative strategies for pricing products which could be adopted by the company, including a discussion of the circumstances for which the different strategies would be appropriate.

Discussions have been taking place within the company concerning the pricing of one of the products to be launched within the next three months. The current planned selling price is £60 per unit and at this price it is expected that 5,000 units will be sold over the next year. However the marketing director has suggested that the sales quantity and profits from this product could be increased by reducing the unit selling price. The production director disagrees and believes that the selling price would have to be increased to improve the level of the profit.

You are required to:

Analyse the relationship between selling price and the level of profit for this product based on the information provided in this briefing.
Within your paper, present your analysis in an appropriate format. This analysis should include an appropriate chart or charts as an integral part of your paper.
Provide a full commentary on your analysis. This discussion should include the assumptions in and the limitations of your approach, a discussion of the views of the two directors related to the conclusions of your analysis and an assessment of the relevance to the organisation’s pricing decisions in the light of your answer to part a).

Note: you should use a spreadsheet for the calculations which underpin the analysis presented in the paper. Your spreadsheet must be submitted to support your paper.

Additional information:

The company estimates product costs based on apportionment of overheads to products using labour hours. Prices set are based on full cost plus a 25% profit mark-up.

The following information relates to this product:

The manufacture of each unit of the product requires materials costing £24 and 30 minutes of direct labour at a rate of £25 per hour.
The variable overhead costs per unit are £5.50 per unit.
Fixed costs for the year to be apportioned to this product are expected to be:
Production costs: £24,000
Administration and management costs: £5,000
Selling costs: £1,000
Some market research has recently been carried out to try and determine the effect on the level of sales demand if changes were made to the selling price of the product. This market research has suggested that reducing the selling price to £57 would increase the sales volume to 5,250 units for the year whereas increasing the selling price to £63 would result in a fall in sales to 4,750 units during the same period.

Assessment criteria
(10%) Discussion of the importance of cost information for pricing
(10%) Discussion of the advantages and limitations of the company’s current approach.
(25%) Review of alternative strategies for pricing products.
(10%) Analysis of scenario
(25%) Commentary on spreadsheet analysis and presentation of results.
(10%) Effective communication and appropriate style of presentation.
(10%) Use and presentation of academic research to support arguments.

Pricing Decisions

The role of cost information in the pricing decision

Cost is one of the factors that affect pricing decisions, hence cost information is an important factor in coming up with pricing decisions (University of Minnesota, 2015). Costs can influence prices through its effect on supply. In this regard, a company will be willing to supply more products the more the cost is lower relative to the price. It is often the case that as the firm increases supply of a product, the cost of producing an additional unit initially decreases. However, a point is reached where the cost of producing an additional unit begins to rise. The company will be willing to continue to supply its products for as long as the profit it makes from selling extra units exceeds the cost of producing them (the extra units). Another way that costs influence pricing is that all the costs incurred by the firm should be recouped through its product sales (Meehan et al., 2011; Smith, 2011). This means that the higher the units of a product that a firm sells, the less each unit is required to contribute towards covering the fixed costs. This in turn implies that the firm can afford to set a lower price for its products if it applies a cost-based approach to pricing or can make higher profits if applies value-based pricing (Leijon, 2017). It is by understanding the cost of producing the products that companies can set product prices so that they (the prices) appeal to consumers and at the same time serve to maximize operating income (Tarjomefa, 2015). Continue reading …

Harwell Group Case Study

Here is a Harwell group case study prompt:

Harwell group expresses their gratitude for the last advice you provided when they were venturing into the food and drinks business. The owners of the Harwell group are seeking advice on the following issues based on their current circumstances (Reflect on your last advice to them where relevant):

1. What stage of the product life cycle do you think the fashion business is currently at, based on its present circumstance? Please provide convincing justifications for your thoughts. Can you also advice on next steps?
2. Based on the strategic choices available to Harwell group, critically review a minimum of three strategic management models.
3. Advice on how consumers can become attached and remain loyal to ‘Zest’ over other energy drinks.
4. Provide three clear recommendations on how Harwell group can change its system and manage the change management process as effectively as possible and avoid disruptions to its current sales and marketing during the change process.

Here is a preview of the solution attempt to the Harwell Group case study.

Harwell Group Business Strategy

Introduction

Harwell Group is a company based in Scotland that so far has four businesses (sports, events, fitness, and fashion). Considering that it is experiencing reduced profits in these business areas and especially fashion, the business considered the option of entering the energy drinks market by offering a canned energy drink, zest, as its product and sought advice on this matter. To come up with sound advice for the company regarding its proposed investment in the manufacture and marketing of energy drink, a PESTLE analysis of the energy drinks industry was done. Based on the results of the pestle analysis, it was recommended that the Harwell Group proceeds with its proposal to venture into the energy drinks business. This recommendation was made considering that the UK is politically and economically stable, and the energy drinks market in the nation is huge and growing.

Harwell Group Case Study

The technological, legal, and environmental conditions prevailing in the country in relation to the energy drinks industry were also found to be generally favourable. The competitive market was evaluated by applying Porters’ five forces model (Porter, 1998) and based on the results of an analysis using the Ansoff matrix (Pierce, 2009), diversification was recommended as an appropriate growth strategy for the business. This strategy option was settled on considering that the company seeks to introduce a new product in a new market.

Harwell proceeded to venture into the energy drinks market, and this business line has so far performed well, as evidenced by the growing market share of zest.

Harwell’s fashion business line has experienced declining sales and has had to be rescued twice by the sports business. The declining performance of the fashion line brings to attention the need to evaluate the product’s lifecycle and take necessary measures with respect to this line. Harwell also intends to make changes to its sales and marketing processes and systems which brings to focus the 5 issue of change management. This paper will focus on the product lifecycle as it relates to Harwell’s fashion business, the strategic choices Harwell has, how to improve consumer attachment to zest, and how to manage the planned change.

The Lifecycle Stage of the Fashion

Business

One of the businesses that Harwell Group engages in is fashion. To establish what is ailing the fashion industry, it is vital to consider the business and its products in light of product life cycle. Stark (2015) notes that the product life cycle is an essential concept in marketing. Product life cycle basically describes the stages that a product undergoes from the time it is first conceived to when it is eventually removed from the market. As noted by Stark (2015), not all products reach the final stage; while some rise and fall, others continue on the growth path. The product life cycle has four main stages, according to Mullor-Sebastian (1983), including introduction, growth, maturity, and decline.

The introduction stage begins as soon as the product is introduced into the market (Stark, 2015). This stage is often characterised by high costs, low sales volumes, low brand awareness, and 6 little or no competition. At this stage, customers have to be urged to try the new product. The growth stage is often characterised by significant increases in sales volumes, lower costs with the exploitation of economies of scale, gradual rise in profitability, greater awareness of the product among the public, and increased competition which results in price reductions (Stark, 2015). Continue reading …

Here are the Contents of the Harwell Group Case Study Paper

Executive Summary
Introduction
The Lifecycle Stage of the Fashion Business
Strategic Choices for Harwell Group
How to Attract Customer Loyalty to Zest
Management of Change Relating to the New IT System
Summary and Conclusion
References

Here is another Harwell Group Case study: Harwell Energy Drink Business.

Harwell Energy Drink Business

Prompt: Harwell ltd. was established in 1974 in Scotland by Lewis and Rebecca Harwell. Their vision is to build a chain of companies within the Harwell group. Currently they have established four different companies which are up and running in various industries, they include: fashion, sports, events and fitness. Their most recent investment was in the IT industry but this eventually became unsuccessful. Lewis and Rebecca are now set to take on a new investment and the group’s net worth has recently been valued at £6.7 million. They plan to venture into the food and drinks industry particularly focusing on the production of canned energy drinks. Although this is a highly competitive sector of the food industry, they have both chosen this because of the increase in demand for energy drinks. Based on your knowledge of strategic position, Lewis and Rebecca have requested you carry out a thorough analysis on their new investment carefully considering the followings:

The external business environment and how this may influence the new investment
Competitive/market forces that would impact this business both positively and negatively
What marketing/penetration strategies do you think can be implemented to boost the market share of this product, hence increasing sales and profit margins
Critically analyse the marketing mix and suggest the most appropriate marketing mix for this product.

Hint: Your advice should be mainly based on key strategic theories and frameworks. You are allowed to make reasonable assumptions stating clear reasons for these if you need to do so – Harwell energy drink business –Harwell Group Investment in Energy Drink Business (below).

Harwell Group Investment in Energy Drink Business

Introduction

Deciding on whether or not to venture into a particular business is an important strategic decision. Careful consideration guided by a thorough analysis of different factors should be done before making such a decision. An analysis of the internal and external business environments should be done to help decide whether or not it is worth venturing into the new business (Pal, 2000). The external business environment greatly affects the chances of a company succeeding in a given industry or market (Thilakasiri, 2018). It is also crucial for business owners and managers to evaluate the competitive forces, penetration strategies, and market mix to be applied by their business as these also significantly affect the chances of the business’ success. Against this background, Harwell Group, which is considering the option of venturing into the energy drinks business in the United Kingdom, should analyse the external business environment and competitive forces in relation to the energy drinks market before deciding on whether or not to invest in this business.

This paper analyses the external business environment in relation to the energy drinks market in the UK through a pestle analysis. A pestle analysis evaluates the political, economic, social, technological, legal, and environmental factors that make up the business environment (Kayumi, 2014). A pestle analysis has been chosen in this case, considering its capacity to assess the prevailing business environment and changes that can potentially affect it (Kayumi, 2014). In addition, the paper will analyse the competitive environment in relation to the energy drinks market. Based on the results of these analyses, recommendations will be made on whether Harwell Group should go ahead and invest in the energy drinks business, the most appropriate penetration strategy, and the best marketing mix to apply.

External Business Environment

Political Factors

Political factors touch on how and the extent to which government intervenes in the economy. Given that Harwell Group is based in Scotland, it is subject to the political environment of the United Kingdom. The UK has enjoyed political stability for a long time, is governed by the rule of law, and is based on democracy (Trading Economics, 2021). The political environment of the nation is such that doing legal business is encouraged. Recently, there have been growing calls for Scotland to break away from the UK, which could have far-reaching effects on the political, economic, social, and legal environments, and by extension, the business environment in Scotland and the rest of the UK (Milligan, 2021). From the outlook, there is little chance that such a change can occur within the next five years, which possibly implies the continued political stability of the UK in the next ten or so years. The UK government constantly monitors the inflation level and takes appropriate measures to see that the annual rate averages 2% (Bank of England, 2021).

Continue …

Contents
Executive Summary
Introduction
External Business Environment
Political Factors
Economic
Social
Technological
Legal Factors
Environmental
Competitive/ Market Forces
Buyer Power
Supplier Power
Competitive Rivalry
Threat of Substitution
Threat of New Entry
Marketing/Penetration Strategies
Marketing Mix
Conclusion
References
Appendix 1: Prompt

Keywords: Harwell external business environment, Harwell Competitive forces, Harwell market forces, Harwell Marketing Strategies, Harwell Penetration Strategies, Harwell Marketing Mix, Harwell Energy Drinks.

Also see: Harwell Group Case Study.

Harwell Energy Drinks Business

Main Features of Haier’s Internationalization Strategy

What are the main features of Haier’s internationalization strategy since early 1990s and how does it differ from the pattern of international typical of Western enterprises? How successful has Haier’s internationalization strategy been and why? What are the principal features of Haier’s management system? In what ways do Haier’s principles and methods of management differ from those deployed by Western companies? What lessons might be drawn by a) other Chinese companies and b) by Western enterprises? – Haier Group Internationalization Strategy and Management System (below).

Key text: Grant, R (2016). Contemporary Strategy Analysis.

Haier Group Internationalization Strategy

Haier Group’s Internationalization Strategy and Management System

Introduction

Haier Group is a multinational company that manufactures and markets home appliances and consumer electronic products. Simply referred to as Haier, the group started off as a small bankrupt company called Qingdao General Refrigerator Factory before growing to become a global leader in the production of house hold appliances. Today, the company markets its products in well over 100 countries across the world (Haier UK 2014). While the company has its global headquarters in Qingdao China, it has a number of regional headquarters (including Paris and New York) to serve its clients in the respective regions. There is wide agreement among business experts and scholars that Zhang Rumin contributed greatly to the growth and success of Haier. As CEO of the company, Zhang saw the company transform from the bankrupt Qingdao General Refrigerator Factory to the highly successful and leading brand that it is today. Under his leadership, the company focused on producing high quality products and began applying a management system that was customer centric with product development focusing greatly on fulfilling consumers’ needs. The company also began and greatly advanced its internationalisation journey under Zhang’s leadership. Haier’s internationalisation strategy and management methods have been a subject of great praise and admiration worldwide given their contributions to the Group’s success. However, they have also been criticised by pundits who feel that the strategy was not as orderly and not as integrated as it should have been. Questions have also been raised regarding the cohesiveness of the strategy and its rationale especially considering its uneven performance in different markets. These criticisms notwithstanding, there is wide consensus that the strategy was a success and that it presents important lessons for companies that wish to internationalise. This paper discusses Haier’s internationalisation strategy and the Group’s management system as established by Zhang Rumin. More specifically, the paper answers the questions: What are the main features of Haier’s internationalization strategy since early 1990s and how does it differ from the pattern of international development typical of Western enterprises? How successful has Haier’s internationalization strategy been and why? What are the principal features of Haier’s management system? In what ways do Haier’s principles and methods of management differ from those deployed by Western companies? What lessons might be drawn by a) other Chinese companies and b) by Western enterprises?

The Main Features of Haier’s Internationalization Strategy and How the Strategy Differs From the Pattern of International Development Typical of Western Enterprises

Companies can expand beyond national markets through internationalisation. An internationalisation strategy is basically the strategy that a firm applies to sell its products in foreign markets. It involves applying one or more modes of international business (Chryssochoidis and Clegg 1997). Some of the modes of international business include exporting, licensing, franchising, partnering or strategic alliance, acquisition, establishing new, wholly owned subsidiary, and joint venture (Shaker et al. 2000; Azuayi 2016). In different situations, Haier applied different modes of international business. To enter the U.S. market, for example, the company initially exported manufactured products to the country and relied on a strategic partner (Wellbilt Appliances) to distribute the products. To market its products in the Netherlands, Germany, and Italy, the company exported its products under the Haier brand (Grant 2016). In countries such as Malaysia, Indonesia, and Philippines, the company formed joint ventures with local companies and relied on them to produce and sell products such as refrigerators and air conditioners (Grant 2016). For Haier, the goal behind its internationalisation was to build a global brand and to become an internationally competitive brand, rather than merely to exploit China’s low manufacturing costs (Grant 2016). In addition, the company sought to create the famous brand of China in the world through its internationalisation. Furthermore, it was aimed at challenging the company to raise to word-class level its standards of marketing, customer service, manufacturing, and product development (Grant 2016). The internationalisation strategy applied by Haier had certain key features which will be discussed in the following sections.

One key feature of Haier’s Internationalisation strategy was its focus on entering and tackling difficult or more sophisticated markets first before tackling easy or less developed ones. As noted by Yan and Guanli (2011), in the process of internationalisation, companies have two modes or options. Continue …

Contents

Introduction
The Main Features of Haier’s Internationalization Strategy and How the Strategy Differs From the Pattern of International Development Typical of Western Enterprises
The Uppsala Model in Relation to Haier’s Internationalisation Strategy
The Success of Haier’s Internationalization Strategy
Principal Features of Haier’s Management System
Haier’s Principles and Methods of Management
Lessons that can be Learnt from Haier
Conclusion
References

How Jeff Immelt Redirected the Strategy of GE

1. In what ways has Jeff Immelt redirected the strategy of GE?
2. To what extent is the strategy aligned with
a. The requirements of the 21st century business environment?
b. GE’s resources & capabilities?
3. What organisational changes has the new strategy necessitated? Will GE be able to successfully execute the new strategy?
4. What alternative strategies should GE consider?

General Electric Case Study

Introduction

How Jeff Immelt Redirected the Strategy of GE The term “strategy” comes from the Greek word “Strategos” which means “generalship” (Nickols 2016). Strategy is a common term or concept in the business field today, having been borrowed from the military. The term has been defined in different ways by scholars and experts. Johnson and Scholes (2011) define the concept as the long-term direction that a firm assumes. On the other hand, Chandler (1963) defines it as the determination of long-term objectives and goals of an organisation and relates it to the actions and allocation of resources needed for the achievement of the organisation’s goals and objectives. On his part, Steiner (2008) associates strategy with the actions that one takes to counter the predicted or actual moves of an opponent. According to Mintzber (1994), strategy is commonly applied in four different ways; as a position, as a pattern, as a plan, and finally as a perspective. Business organisations develop and apply different strategies to achieve their objectives and goals, respond to changes in the business environment, and to counter the moves taken by their competitors. This paper will focus on the strategy of General Electric (GE) under the direction of Jeff Immelt. The paper will begin by providing a background to General electric and its strategy under the leadership of Jeff Immelt before discussing the how the company’s Strategy was aligned with the 21st century business environment. The paper will then discuss GE’s strategy alignment with the company’s resources and capabilities and organisational changes in the company concluding with a brief discussion of alternative strategies that General Electric could have adopted. Continue reading: 30-64.

The Launch of a New Product Under Consideration

1. Solved: The launch of a new product is under consideration. Its unit variable costs will be £30 and it is estimated that incremental fixed costs of £250,000 will be incurred if production is commenced. Forecast sales are 50,000 units. At what level of price for the new product will the organisation break even? If the actual planned selling price is £48 per unit, what will be the organisation’s margin of safety? 2. The following information is about two organisations, A and B. Organisation A Organisation B £ £ Fixed costs 60,000 12,000 Variable costs per unit 0.20 0.50 Unit selling price 0.60 0.60 Expected sales levels (units) 160,000 160,000 Which firm has higher operating gearing? What is the expected net income of both firms? What would expected net income be for both firms if sales were a) 140,000 units and b) 180,000 units? Which firm is facing more risk in terms of its current sales predictions?

Launch of a new product

2. Solved: The following information is about two organisations, A and B.

	Organisation A	Organisation B
	£	£
Fixed costs	60,000	12,000
Variable costs per unit	0.2	0.5
Unit selling price	0.6	0.6
Expected sales levels (units)	160,000	160,000

Which firm has higher operating gearing? What is the expected net income of both firms?
What would expected net income be for both firms if sales were (a) 140,000 units and (b) 180,000 units?
Which firm is facing more risk in terms of its current sales predictions?
Be sure to demonstrate your numerical workings.

Launch of a new product …

Solutions

1 (a) At what level of price for the new product will the organisation break even?
Variable cost per unit = £30
Fixed costs = £250,000
b (in terms of price) = ?
Total sales revenue = fixed costs + total variable costs
50,000 units x b = £250,000 + (£30 x 50,000)
b = (250,000+ 1,500,000)/50,000
Break-even price =

b) If the actual planned selling price is £48 per unit, what will be the organisation

2 a) Which firm has higher operating gearing?
An activity with relatively high fixed costs compared with its variable costs has a high operating gearing (Atrill and McLaney 2006, p. 229). According to Cima Global (2006), one way of determining operational gearing is by evaluating the contribution-to-sales ratio (C/S ratio). A low C/S ratio indicates that a business has low proportion of fixed costs and vice versa (Cima Global, 2006).

The contribution per unit for organisation A is £0.4 (0.6-0.2) while that for organisation B is £0.1 (0.6-0.5).
Contribution‑to‑sales ratio = (Contribution per unit / Sales price per unit) as a percentage
Contribution-to-sale ratio for:
Organisation A = (0.4/0.6) x 100= 67%
Organisation B = (0.1/0.6) x 100= 17%

b) What is the expected net income of both firms? Read more ….