Analysis of Greenergy IT Company
This paper describes the purpose and function of business and market entry points in Denmark. The company analyzed in this research is Greenergy, an IT company specialized in data recovery solutions. The paper suggests methods to achieve entry in the global market and the recommendation strategy for Greenergy. It also explores the business activities in an international context.
The purpose of this study is to scrutinize the international business and market entry point in Denmark. The topic is important because it seeks to examine the business activities useful in a global context. It will also analyze the strategies for entry into the international market. In addition, the paper will give endorsed policies for the worldwide business processes. Therefore, it is essential to investigate the dynamics of doing business globally. The study focuses on Denmark and the market entry point for international firms and commerce in this country.
The company is known as Greenergy was formed in 1997. Its headquarter is located in Singapore. It is a data recovery solution company and it deals with emergency repair and restoration services of mission critical data storage arrays, drives, and media. Its area of operation includes Singapore, Kuwait, Saudi Arabia, China, Philippines, Brunei, Thailand, Brunei, and Malaysia (Simonelli & Caroli, 2013).
Marketing Mix and Staffing Policy
Marketing mix refers to the different kinds of choices that a firm has to make in the process of bringing a product into the market. It is well defined by the 4Ps. The 4Ps include the product, place, price, and promotion. The product that the customer needs is an efficient IT package that can serve different purposes. The business should be located in Copenhagen, the capital of Denmark. This will enable the buyers to access the company’s product with ease. In addition, it will ease the distribution channel. The prices of the goods will be discounted to attract customers. Lastly, Greenergy should seek to promote its business through online advertisement and media. The company uses the geocentric policy to staffing. Job is assigned to any individual who is best suited for the position regardless of culture, country of origin, and background.
Market Entry Strategy
Direct and Indirect Exporting and Importing
The conduct of business on an international platform involves exporting and importing of goods. It embodies a forthright technique to benefit from the global resources and markets. Nevertheless, there are risks involved in this if an enterprise is dependent on an insignificant number of customers or suppliers in high-risk nations (Hoskisson, Wright, Filatotchev, & Peng, 2013). Direct import and exports contain unswerving contact between the importer and exporter and the overseas merchant or clienteles (Simonelli & Caroli, 2013). If the corporation is small or less proficient, they should export and import their goods (De Mooij, 2013). Consequently, the technique involves the use of an agent or other intermediaries who can be exclusively trusted (Thompson, Peteraf, Gamble, Strickland, & Jain, 2013). The company can also engross in foreign investment or an extraneous joint venture to deliver an export base for the business with other states.
They are programs among firms that enable them to collaborate for strategic tenacities. They take the form of licenses and joint ventures, but often, they are distinguished from the two (Simonelli & Caroli, 2013). The alliances result in the no joint proprietorship or detailed license treaty. Thus, they can just be two companies functioning together to advance a collaboration (Hiller, 2014). The companies can have joint promotion and research programs (Hoskisson et al., 2013). Further, it is an opportunity for young or small firms to enter the universal market when they could not do so when they are alone.
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It is applicable in enterprises that offer expert services in a foreign location for a definite fee and period. Such services include engineering, education, management, information technology, medicine, and law (Khanna & Palepu, 2013). Contracts are striking for corporations that have talents not being entirely exploited at home but in demand overseas (Simonelli & Caroli, 2013). They are temporary, allowing for plasticity, and they have a fixed stipend so that they could acknowledge proceeds in advance (Thompson et al., 2013). However, their deficiency is that their term is short and they have to negotiate new contracts and develop new businesses (Hoskisson et al., 2013). The process is expensive, time-consuming, and it necessitates cross-cultural skill for dialogues. The major merit of this entry method is that it is given for the big projects such as the construction of dams, airports, and railways (Thompson et al., 2013). Such projects attract backing from global financial organizations such as the World Bank (Hiller, 2014). The competition in this field is relatively low as small numbers of outsized companies are involved in tendering due to the high investment required in obtaining the project.
Licensing and Franchising
It involves contractual treaties, whereby one party known as franchiser permits another party referred to as franchisee to use logical property in response for unrestricted royalties. According to Khanna and Palepu (2013), the two parties to trade are sovereign businesses that have engaged in the trade for a stated period. In this entry strategy, the enterprise uses the country-specific knowledge of the franchise or the licensee to institute and run business in an unacquainted milieu (De Mooij, 2013). The method is valuable as it involves less risk development strategy.
Foreign Direct Investment
It involves a resident entity in an economy obtaining a lifelong interest in an enterprise residence in a different economy. According to Chandra, Styles, and Wilkinson (2012), the strategy encompasses some degree of equity possession on the part of the foreign financier. It can be in the form of joint venture or the formation of exclusively owned subsidiaries.
Joint Ventures and Turnkey Operations
The scheme involves shared possession in a subsidiary corporation. It allows the company to take an investment situation in an overseas setting without taking broad accountability for the extraneous investment. Simonelli and Caroli (2013) say that the partners can have equal or capricious stakes or, they can be two or more associates, local or international, or a member of the private or public. However, joint ventures fail because associates have not settled on aims and objectives. Thus, they find it difficult to sort out their conflicts (Hiller, 2014). It is an effective means of international admittance when companions are corresponding.
Wholly Owned Subsidiaries
The process involves the creation of businesses in foreign locations that are owned exclusively by the investing corporation. The strategy offers the parent company to be fully in control of operations (Hoskisson et al., 2013). Nonetheless, they are responsible in the endowment of capital and supervision. They also take care of the risks involved in the running of the business. It is an ideal choice when control is necessary and the company is capable of the venture.
Recommended Entry Strategies for Greenergy
The contract strategy is effective for the service companies such as for engineers and contractors. There is reduced competition on this kind of market. It is a lucrative business, but it needs dedicated skills to perform the tasks (Chandra, Styles, & Wilkinson, 2012). Greenergy should use contracts entry strategy to enter the market as they have required skills and human resource to handle the work.
Factors that Influence the Choice to Go Worldwide
The aspect of profitability is of vital prominence in venturing into transnational business. The trade seeks to exploit foreign markets, especially when there is sluggish market progression, market inundation, or regulatory impediments (Chandra, Styles, & Wilkinson, 2012). According to Hoskisson et al. (2013), momentous growth of a business can be possible through expansion. Secondly, there is a varying worldwide environment as nations involved in trade have experienced an extraordinary epoch of peace and steady associations since 1946 (Hiller, 2014). Such countries that enjoy peace include Japan, the USA, and the Western European countries (Simonelli & Caroli, 2013). Thirdly, the country’s definite factors influence the complete internationalization of pronouncements (De Mooij, 2013). Such factors include corporate tax and political steadiness. The internal factors that may make a company go into universal business include access to markets, cost reduction, and access to resources.
Businesses Activities in an International Context
For the admittance to the Danish market, the company needs to be innovative in its products and services. According to Khanna and Palepu (2013), that will give it a competitive gain over its competitors. In Denmark, the economy is moderately open, and the enlargement in exports has noteworthy repercussions for the country (Simonelli & Caroli, 2013). According to Hiller (2014), the majority of exports from Denmark are from firms with the U.S. origin and other neighboring countries. For an enterprise to operate on the Danish market, they must comply with the global guidelines such as corporate social responsibility, zero tolerance to corruption, and human rights (Hoskisson et al., 2013). They need to practice responsible progression while complying with international rules. According to De Mooij (2013), the government should also foster a good relationship with other countries. That will assist the international companies in their business entrance to the Danish market (Thompson et al., 2013). Their governments ought to use their embassies and foreign ministries to dialogue on better working relations between the countries.
Country Analysis and International Entry
A comprehensive market inquiry is essential before venturing into a new business. The information from the analysis may be found in the banks, leading institutions, credible newspapers, and international organizations such as the UN (Chandra, Styles, & Wilkinson, 2012). According to Thompson et al. (2013), the company needs to conduct a SWOT analysis and a PEST (LE). The SWOT aids the company to examine its strengths, weaknesses, opportunities, and threats. PEST (LE) enables the company to explore the political, economic, sociocultural, environmental, and legal environments that can alter the operation of the enterprise (Simonelli & Caroli, 2013). The company should consider the following vital factors before doing business in Denmark.
Background information. The enterprise needs to understand the economic, social, and political institutions. That will ensure that it understands Denmark’s geography, history, culture, and demography (Khanna & Palepu, 2013). Denmark accepts democracy and the market economy is accommodative of competition from foreign firms.
Political and economic state. The study gives an insight of the political systems to understand the business environment of Denmark. It involves a scrutiny of the economic policies and a variation of information and data on the nation’s economy (De Mooij, 2013). The business needs to understand the inflation, GDP, unemployment rate, consumer expenditure, financial systems, competitive environment, and the volume of external commerce.
Cultural assessment. The corporation must analyze the company’s cultural aspects such as religion, language, attitudes, and social edifice. The native language of the people of Denmark is Danish, but there are other languages spoken such as German, English, and Swedish (Hoskisson et al., 2013). It is necessary for a business to understand the language of the country to apprehend the culture of the nation (Hiller, 2014). Further, appreciating the modifications in religious norms and practices can result in cultural drawbacks when endeavoring to conduct business in an unacquainted environment.
Risk elements. The probable risks involved in entering an overseas market differ prominently with the country. The political hazards may include terrorism, wars, civil unrest, and changes in law and regime policy (Simonelli & Caroli, 2013). Thus, the enterprise should observe the financial volatility, corruption issues, exchange rate acquaintance, and the threat of non-payment (Khanna & Palepu, 2013). The study of the risk factors aids the company in equipping the firm with mitigation plans.
Product statistics and growth indicators. The assortment of data shows an indication of the standard of living in a state. The information comprises data such as internet links per 1,000 residents, telephones, human advances such as life anticipation, knowledge rate of the populace, and dominance of specific ailments.
Strategy for International Business Operations
The company should use the strategy of global standardization as opposed to transnational, international, or localization. This marketing approach can be used globally, and it conforms to work across different cultures and countries to promote a product. Companies that use global standardization include Coca-Cola. According to Hiller (2014), Coca-Cola uses standard brands, packaging, formulations, and distribution internationally. Greenergy should choose this method as it can appeal and strike deals with big companies. Contracts are prominent for companies that have abilities, and it is not entirely exploited at home but in demand overseas. The risk is that the company may lose the local market to those who have tailored their market to match the local competitors.
The tenacity of the study was to scrutinize the international business and market entry point in Denmark. It has analyzed the factors that motivate the company to go globally. The profit and an extensive market are key factors. The study has also explored the businesses activities in an international context. Denmark is a free market economy, and it is open to the entry of foreign companies. The enterprise needs to be innovative and creative to gain a competitive benefit on the market. The paper has also performed the country analysis and international entry factors. They include such factors as background information, risk factors, political and economic states, product statistics and growth indicator, and cultural assessment. The study has analyzed the strategies for the entry to the global market. Further, it has recommended the studies for global business operations. Such approaches include contracts, wholly owned subsidiaries, foreign direct investment, joint ventures and turnkey actions, licensing and franchising, strategic alliances, and direct and indirect exportation and importation. Lastly, the merits of doing business are prodigious, but the corporation needs proper strategies and risk mitigation plans.