Question oneAs the CEO of the Washing Company, all my decisions will be based on its exceptional performance in the United States. ABC Company has done excellent in the US, and it is the right time for it to establish a globally. This is the reason as a CEO I am intending to make a move of marketing the company’s new front load washer and dryers in the Czech Republic. This is the case, despite the negative opinions from many stakeholders. Politically, the Czech Republic has introduced many economic reforms to attract many foreign investors. In this case, I will take the advantage of privatization of the business to establish the ABC Corporation in this state. The government has used fiscal consolidation to improve the business environment. According to Commander and Svejnar (2011), research and development are critical to the development of unique products that gives an organization a competitive edge. In this context, I will heavily invest in research and development, making marketing in the country successful.
Miele, the main competitor, produces and supplies washing machines and dryers to Germany and Czech Republic. What makes their products popular is the drum design, which is made up of a unique honeycomb design that helps the clothes to float on the layers of water during the process of washing. However, our company using the modern technology will introduce its unique products at lower costs compared with the ones of its competitor. What should be understood is that even if the product is sold at low cost, the quality will not be compromised. Although our product in the US might look more expensive than that of Miele Company that is sold at $ 2,000, I will ensure that ABC focuses on developing unique products that with modern appeal, attracting many customers. This will be attained while introducing a newer, sleeker modern front load washer and dryer at an economical cost to the Czech citizens. Notably, the country has a GDP of US $ 279.8 billion (Commander & Svejnar, 2011). This indicates that there is a stable market in the country that will promote the growth of the company. Additionally, it is anticipated that the economy will grow by 1.6% by 2017, giving more hope to my company (Commander & Svejnar, 2011). Socially, this country is recognized for its stable political environments, which attract many investors. However, I will focus on mitigating the cultural differences that exist. This will be done by training the distributors to avoid confronting Czech people and relate to them in a polite manner. In addition, the stakeholders will be expected to adhere to the rules and regulations of the country to avoid hurting the customers. By considering all the social aspects in the Czech Republic, I think ABC Company will thrive on selling its products.
It is important to state that ABC Company will be committed to product differentiation as well as alteration strategies to gain thrive in the competitive business world. The fact that Miele uses drum design necessitates that ABC should come up with a unique design to win many customers. In this case, the company will use research and development to develop a powerful brand that will draw the attention of many as advocated by Popa (2012). The altering strategy that will be offered will concern the packaging. In this context, the company will pack its product in unique packages considering the culture of the Czech people. This should be done while considering the customers’ needs.
Regarding the product, ABC product will be made unique, and their brand will be powerful to draw the attention of many customers. ABC product will be differentiated from those of other companies because they will be packed in a variety of packages with different shapes and colors. Concerning pricing, products will be sold at lower prices, which will be affordable to all citizens. Because the Czech Republic is an economically stable country, washers and dryers will have a viable market. Promotions will be done using the modern technology. The wholesalers will be given some discounts on particular products. This will be determined by the amount of the products bought. The Advertisement will be prioritized because through it customers will know the available product. The last marketing mix is the place. ABC will investigate the areas with more population and establish itself.
The first approach that I will use is the polycentric approach, which involves hiring host-country nationals for positions in the country. The second approach is the ethnocentric approach. According to Jordan and Lawrence (2012), this approach involves staffing the most significant positions in foreign subsidiaries with expatriates from the home country. This is because they are believed to represent the interests of the home office better compared with those from host-country.
Advantages of polycentric approach
The host country citizens guide the company in local market conditions and all other business environments (Jordan & Lawrence, 2012). For example, they can send a message to the country and customers that the firm is willing to be committed to the country and its people.
Advantages of ethnocentric approach
It leads to the alignment of the interests and views of the home office with the foreign subsidiaries abroad. It is easy to communicate using this approach. This is because there will be no cultural and language barriers (Jordan & Lawrence, 2012). For example, employees who are the real inhabitants of the host country can help to interpret the goals and objectives of the firm to the local people.
Disadvantages of polycentric approach
There may be some disconnect in perceptions and interests with the home country (Jordan & Lawrence, 2012). For example, the local employee may put local interest above the company’s interests.
Disadvantages of ethnocentric approach
The approach is likely to lose local perspectives as well as insights that local employees can provide that might be crucial to overcoming unique hurdles in foreign offices (Jordan & Lawrence, 2012). It is expensive to hire expatriates. For example, hiring experts from the company’s country requires more money because they will require many allowances compared to the host country.
- Commander, S., & Svejnar, J. (2011). Business environment, exports, ownership, and firm performance. The Review of Economics and Statistics, 93(1), 309-337.
- Jordan, T., & Lawrence, M. C. (2012). Changing trends in international human resources management: managing approaches for effective global operations. Journal of Knowledge & Human Resource Management, 4(8), 23-234.
- Popa, A. M. (2012). The Impact of Social Factors on Economic Growth: Empirical Evidence for Romania and European Union Countries. Romanian Journal of Fiscal Policy (RJFP), 3(2), 1-16.