Based on your classmates' discussion posts for Week 2, do you still believe the tools that you selected will work best for a global strategy? Why or why not?
The analytical tools that were selected: SWOT analysis and PEST analysis will definitely work best for a global strategy. As learned, SWOT analysis provides the organization with a comprehensive gauge on the competencies through an evaluative analysis of the internal resources, as well as the imminent external factors that potentially impinge on the operations of the firm through examining the opportunities and threats that abound in the global market . Concurrently, the PEST analysis provides an even greater in-depth examination and understanding of external factors that influence and affect the organization’s operations: political, economic, social, and technological factors . Thus, both tools would assist in providing a comprehensive and integrative picture of internal competencies; as well as the more detailed external factors that significantly impact current and future operations of the organization.
What evidence do you have to support your decision?
Thus, the decision to expand operations in China require support in terms of providing evidence that: (1) there is substantial volume (or demand) in terms of potential customers that would purchase the furniture being produced; (2) that there is a market for the products given limited number of sellers (supply) which manufacture similar products (furniture); (3) that competition is manageable; meaning, there is no evident barrier to entry in the Chinese market; (4) that the trends in the furniture market in China is growing; and (5) that the organization could exhibit and manifest core competency or competitive advantage in any of the marketing strategies to be applied (product, price, place, and promotions) over the competitors.
How would you refute the people who chose an additional tool rather than one of the tools that you selected?
The people who opt to use an additional tool to replace one of the analytical tools (SWOT and PEST analyses) selected could be refuted by explaining the rationale for selecting these tools (as abovementioned). Likewise, one could assert that instead of replacing any of the two tools, their recommended additional tool could be used as an additional tool to support or validate the contentions. Taking out one tool would render the evaluation to enter the China market insufficient and might jeopardize the decision-making process.
Based on the tools that you selected, provide a brief analysis of your market, using those tools.
Entering the China market as the decision-making move, the following information generated from the SWOT analysis would serve as a relevant support:
Strengths: core competency in manufacturing diverse kinds and types of furniture that would
cater to the demands of the Chinese clientele; and knowledge of the Chinese market
through conducting market research and through exemplary leadership in the company
Weaknesses: needs more awareness and familiarity with business customs, norms and traditions
of the Chinese market, especially in terms of deciding on establishing an organization
there or just expanding operations through exporting products to China.
Opportunities: large demand and volume of clientele as evident from growth patterns.
Threats: competition from local furniture manufacturers.
Using PEST analysis, the following information are gathered and evaluated:
Political: no barriers to entry; politically stable; government regulations are supportive and clear.
Economic: good economic growth rates; high consumer purchasing power; fairly stable foreign
exchange rates.
Social: consumers relayed needs for diversity in style of furniture offered; great demand
Technological: following electronic medium provides awareness on products manufactured
References
Internet Center for Management and Business Administration, Inc. (2010). PEST Analysis. Retrieved from quickmba.com: http://www.quickmba.com/strategy/pest/
Renault, V. (2013). SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats. Retrieved from The Community Tool Box: http://ctb.ku.edu/en/tablecontents/sub_section_main_1049.aspx
