TTI’s Expansion Strategy Question 2.1
Techtronic Industries (TTI) is one of the world’s greatest manufacturers of tools and flooring materials. Its products have been successful in international markets such as North America, Europe and Australia. However, to further increase its expansion and revenue generating capacity, the corporation seeks to expand into Asian countries. To achieve this, it will determine which countries are the most viable for investment and which segment to target in the countries it selects. It will also examine the most significant challenges that it is likely to encounter in these countries and the best strategies to use to overcome them.
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In its bid to expand further in the Asian market, TTI should expand into Singapore and Dubai. Singapore and Dubai are two of the most viable markets in Asia. Therefore, with effective marketing strategies, TTI is likely to gain a significant market share and grow its revenues. Singapore is one of the richest economies in the world. Additionally, it is ranked by the World Bank as one of the easiest countries to do business in. It is technologically advanced and has a vibrant commercial sector; TTI can benefit greatly from these factors. Singapore also has a wide pool of tech-savvy and welleducated professionals, thus TTI will gain from a skilled workforce. Similarly, UAE is one of the most viable countries to invest in because of its ease of doing business easy access to capital, visionary leadership, rapidly expanding market and skilled workforce (Hagemann, Vetter, & Maketa, 2017). The capital of UAE, Dubai, provides a conducive environment for TTI to operate successfully. Both Singapore and Dubai are ideal for investment because their legal systems contain laws and regulations that enhance the ease of foreign investment. Their tax regimes are also conducive for business growth.
Question 2.2
TTI should target businesses, thus engage in the B2B (business to business) business model. For a multinational corporation such as TTI that markets high-value products, the B2B model offers numerous and immense benefits to its business. Firstly, it allows the corporation to sell larger volumes of its products, thus generating higher revenues. It also facilitates the formation of partnerships with retailers, who in turn, make regular orders for the products. Thus, the B2B model offers more benefit to the business because unlike B2C, it leads to a regular flow of orders instead of one-off orders (Kumar, 2016). The B2B model is more cost-effective than B2C because it allows the corporation to sell products in bulk, thus lowering the costs of operation. B2B is also advantageous to TTI because business buyers tend to be more rational and deliberate about their purchases, therefore, there are less incidences of returns and unpredictability. The B2B model often creates long-term relationships between buyers and sellers which enable the businesses to offer mutual support to each other such as favorable credit terms. This, in turn, helps businesses save money (Husby, 2017). TTI has been in business for almost half a century, and has a wealth of experience in developing products that are suitable for the market. The company is also an industry leader in the manufacture of tools.
TTI can therefore position itself in the Singapore and UAE markets as an innovative brand that offers high-quality products at competitive rates. It can also position itself on the premise that it provides top-notch customer experience compared to its competitors.
Question 2.3
Venturing into UAE and Singapore has the potential to yield immense benefits to TTI. However, there are also challenges that the business might encounter when setting up and running its operations in these countries. One of the significant challenges that the company might encounter is the cultural differences. In the UAE and Singapore, the collectivist cultures tends to have more emphasis on maintaining good relationships, sometimes at the expense of the efficiency of a business’ operations (Hays-Thomas, & Agars, 2013). In business, the Singaporean and UAE cultures value harmonious negotiations, and there is stronger emphasis on nonverbal cues. To overcome this challenge, it is essential for TTI to study and understand the cultural differences. It is crucial to ensure that its employees learn to tolerate and respect each other’s culture. The second challenge that TTI might encounter is that there are already other established corporations that offer similar products in both the UAE and Singaporean markets, therefore, it will face stiff competition. To overcome this challenge, the firm should develop a suitable market entry strategy and also identify the most ideal marketing strategy to use. In markets such as these where there is intense competition, entering into partnerships and joint ventures are effective market entry strategies. These strategies help to reduce the amount of capital that the firm invests while entering the market, thus freeing up its resources to engage in other beneficial activities such as marketing and promotion. TTI should also identify the most suitable way of attracting the market’s attention. The company should engage in aggressive sales and promotional activities that will target the businesses that it intends to partner with. Additionally, as part of this marketing effort, it should highlight its attractive features such as competitive pricing, longer warranty periods and high-quality products. References
Hagemann, B., Vetter, S., & Maketa, J. (2017). Leading with Vision: The Leader's Blueprint for Creating a Compelling Vision and Engaging the Workforce. Hodder & Stoughton. Hays-Thomas, R., & Agars, M. (2013). Managing Workplace Diversity and Inclusion. London: Taylor and Francis.
Husby, P. (2017). Make Your Business a Lean Business. PRODUCTIVITY Press. Kumar, D. (2016). Enterprise Growth Strategy: Vision, Planning and Execution. CRC Press