Scenario Analysis
Businesses are made to earn economic profit and increasing the financial belongings. This particular provision could only be accomplished by a company, if it could bring cost efficiency and continuous development into account (Richard A. Bettis, p. 26). Cost efficiency is an important measure from the viewpoint of an organization and due to this particular aspect, an organization could increase its financial belongings accordingly.
Continuous development is an important for an organization to become economically and strategically strong as compared to other companies operating in the same line of business and that is the main thing, who companies always try to enter in the provision from different standpoints. Expansion of the network of the company effectively is one of the most important strategies and provisions which deem extremely essential from the viewpoint of a company in total (Lin, p.11). According to majority of authors and organizational based officials, it is vital from the viewpoints of the company to expand their networks internationally for their future and prosperous growth. The main theme of this part is to expand the network of our already Seattle business for profit with the name of Vantage point services (Metin Sengul, p.376). Vantage point services are trying to enter in the region of Hong Kong for opening its branch. The website of our company is http://vantagept.com/ . There are basically three different angles, required by this particular part to accomplish and complete. The first part of this assignment would be comprises on the PESTLE analysis of the selected region, and the strategy of our business to comply with the same, followed by Promotional Based Analysis and then the financial competitiveness in entering in this particular region.
The importance of each component may be different to different kinds of companies, but it is essential to any strategy a company wants to develop (Oster, p.31). It is very essential to understand each component of PESTLE.
- Political factor determine the extent of government may influence the economy or particular industry.
- Economics factors the economy`s performance that directly impacts an organization and have violating long term effects.
- Social factors identify the social environment of market, and estimate determinant like cultural trends, demographics, population etc.
- Technological factors relate to innovations in technology that can affect the operations of the industry.
- Legal factors relate to both internal and external sides. There are certain laws in country that affect the industry environment while there are particular policies that companies maintain for themselves.
- Environmental factors are all those that influence or taken by surrounding environment.
Political Factors Association with Hong Kong
Hong Kong which is one of two Special Administration Regions of the Regions of People’s Republic of China (PRC), while other region is Macau. Hong Kong is situated at the South Coast of China which enclosed by the Pearl River Delta and South China Sea. Hong Kong is known for its expansive skyline and deep natural harbor. The total land mass of the country is 1,104 Km2. The total population of the country is nearly 7 million in which 93.6% are Chinese ethnic people while remaining are of other ethnic group (Leibo, p. 210).
Hong Kong is known as one of the world’s leading international financial centers which have a major capitalist service economy with low amount of taxation and the trade. Politically Hong Kong is a safe and perfect country, wherein the rate of crime and other illegal activities are very low. Government of the country is supportive and it is doing a great job as far welcoming new companies in the regions with perfection. Vantage Point Services Company will definitely get an added advantage while entering in this particular region.
Economical Factors Association with Hong Kong
Economical well being is important from the viewpoint of an organization as well as from the standpoint of a country as well. Economical factors are the one which deems extremely important for enhancing the products portfolio of an entity. From the analysis, it is clear that the financial and economical condition of the chosen region (Hong Kong) is perfect. The country recorded net Gross Domestic Product (GDP) amounting to US$ 381.663 billion in the fiscal year 2013, which is the 39th highest of the world, with per capita income amounting to US$ 52,687 (Szerb, p. 172). The consumption power of the people in this particular region is quite high merely because of the 7th largest Per Capita Income. Interest Rate is also in a single digit, which would certainly assist us to launch out product and established our business in this new region.
Social Factors Association with Hong Kong
Hong Kong is a multi ethnic country of the world in which there are people lived and every person has different religion and social background as well. It is important for a company before entering in this particular region to research the things accordingly and effectively as well. Vantage point services have to research hard in order to flourish our market share herein Hong Kong, as there are number of people lived with different mindset and social background.
Technological Factors with Hong Kong
If the current era would have been regarded as technological era, then it would not be wrong because currently every company is incomplete without technological based efficiency. A company has to adopt technological based efficiency while entering in a particular region in total and Hong Kong is one of them. Hong Kong is a technological advanced country of the world which is now moving with a robust pace all over the world. Technological efficiency is also important for an organization to peruse and our company has to comply with the same in order to increase the technological based efficiency.
Legal Factors with Hong Kong
Legal factors could be extremely important for an organization to increase its financial belongings. It is extremely important for an organization to comply with the same. When a company wishes to enter in a specific region, then the stance of legal behavior and legal compliance is extremely important in total. Hong Kong is one of those countries which are operating with perfection and has effective and hard legal compliance factors in total. There are two important regulatory bodies, for which vantage point services have to comply with,
Hong Kong Monetary Authority (HKMA)
Hong Kong Securities and Future based Commissions (SFC)
It is important for our business two comply all of these regulatory bodies along with other important governmental based regulations in order to enhance their productivity accordingly. Above mentioned are the domestic laws which have to be complying with by the selected company and international laws as well, like World Trade Organization (WTO) as far as trading in this particular region is concerned. According to the WTO law, the product which is trading in a country should be effective and it will not have anything illegal, and Vintage Company has to comply with these standards.
Environmental Factors with Hong Kong
Environmental factors are some of the major factors which are extremely important for an organization and an organization cannot be in the net of economic prosperity and expansion. Hong Kong is one of those countries which have effective environmental activities in all over the world and the country is doing a perfect job as far as the productivity. Vantage point services will get certainly add advantage while entering in this particular region with perfection.
E-Commerce Utilization in Hong Kong
Apart from the social medias like face book, twitter, there are number of other social media networks as well, which are extremely important and widely used herein Hong Kong, and among them, the name of Hi-5 is one of them. In most of the universities and public places, this particular tool has been used effectively.
The essence of E-Commerce is quite effective and large herein Hong Kong, as the market constitutes a worth of US$ 8.3 billion in total which is extremely high. There are number of websites which deems favorable for the company as far as E-Commerce implementation is concerned, which predominantly are, Magneto E-Commerce Solution, M-Commerce Solution and E-Commerce Consulting Firm (Katsioloudes, Marios, p.45). All of the certain things including E-Commerce would be regulated and governed through Hong Kong Electronic Media Regulatory Authority (HKEMRA). The Laws of social media is not very strict in Hong Kong, as any person can use this medium for the marketing purpose and it is free as well. Companies can post anything they want to share on different mediums of social Medias herein Hong Kong.
Promotional Based Activities
When it comes to organizations, then there are certain things that come under the umbrella of the same. There are numerous departments that work in an organization and among them; the name of marketing department is one of them. Marketing department is held responsible for all the marketing and promoting the products of the company accordingly. Promotional based activities have number of things in total (Katsioloudes, p. 311). A company which is trying to enter in a specific region has to look after four different things of Marketing Mix. Vantage point services will also apply the same technique on our company while entering in Hong Kong with special emphasize on the promotional based activities.
Product
The market of Hong Kong is increasing heavily and with perfection as well, and there are number of companies from all of the world is now strategizing to enter in this particular region in order to flourish their market share with perfection. Vantage point services have to make our products perfect and free with any sort of flaws and all such things. Product quality should be effective because it is one of the basic things which come under the efficacy of a company in total.
Pricing
Pricing is an important provision from the viewpoint of an organization. Through the effective measurement of pricing, it is important for the companies to have effective pricing because of having different companies’ lies in the same region. Vantage point services have to come up with the competitive pricing strategies in order to enter in this particular region as it would give chance to them to flourish further in the market.
Place
Place is yet another important provision from the viewpoint of an organization. Under the net of place, vantage point services will go with both offline and online mediums. Vantage point services are now strategizing more on online mediums to enhance our productivity with perfection in different parts of the world.
Promotions
Promotional based activities could be extremely effective for an organization and it is one of the most dominating and diverse mediums of marketing, which is not only economical but extremely beneficial as well. Both offline and online mediums could have been taken into consideration for the same purpose. Under the net of online mediums, the name of face book, twitter and other important and emerging social Medias are some of them. The platform of the face book could enhance the activities of the relationship of different user profile through which people could post the things on the walls and on the profiles of different people in total. Over 3,000 applications had been released right after the launching of Face Book platform. It was released in the year 2007 and after a matter of one year, the number of applications had grown to 13,000 and estimated amount of developers amounting to 100,000. The success of this platform lies in the fact that about 3.5 million of users added five million new users within 60 days of time period. By considering these facts, more than 11 million customers associated with the face book platform by the end of 2007. Vantage point services will use this particular aspect of social media to enhance the productivity of our product effectively and it would be effective as well, because the essence of social media in Hong Kong is extremely high. Vantage point services have to make their face book page on which all of their information could be found by its consumers. This thing will certainly help out the company to accomplish its long term objectives.
Financial Projection
Financial Projection could be extremely effective for a company. Vantage point services are trying to enter in the region of Hong Kong; therefore financial projection of income statement for the next three to five years should be included, along with assumptions and start up expenses needed to complete the analysis.
Assumptions
The revenues of company are divided in following 3 general categories
It is assumed that all the students will register at the start of the year. There is 6.95% growth in parent fees or no of students in a year and 7.44% increase in registration fee because of number of students increase. Company will make the following expenses on the first year
- There is 5% growth in above expenses each year except food supply rent, others and payroll in which there in no growth on yearly basis
- There is 10% of depreciation rate on fixed assets
- The Income Tax rate is 30% each year
- Three partners of the company has invested HK$ 5000 each and HK$15000 of capital at the start of the business
- Company purchased the equipments at the start of the business in year 1 worth HK$15000
- There is HK$3,000 replacement & repair cost on yearly basis from year 2 to 5 each year
Start up Expense
Profit & Loss (3 Years)
Works Cited
"Beyond CEO Tenure: The Effect of CEO Newness on Strategic Changes." Journal of Management (2012): 11-20.
Katsioloudes, Marios. Strategic Management. Washington: Routledge, 2012.
Leibo, Steven. East and Southeast Asia 2012. Miami: Stryker Post, 2012.
Lin, David H. Weng and Zhiang (John). "Beyond CEO Tenure: The Effect of CEO Newness on Strategic Changes." Journal of Management (2012): 11-20.
Metin Sengul, Javier Gimeno and Jay Dial. "Strategic Delegation : A Review, Theoretical Integration, and Research Agenda." Journal of Management (2012): 376-400.
Oster, Dr. Gary. "Strategic leadership." JOURNAL OF STRATEGIC LEADERSHIP (2012): 31-40.
Richard A. Bettis, Alfonso Gambardella, Constance Helfat, Will Mitchell. "Strategic Management." Strategic Management Journal (2013): 26-31.
Szerb, László. Global Entrepreneurship and Development Index 2012. Georgia: Edward Elgar Publishing, 2012.
