ABC Washing Machine Company and Czech Republic Market

free essayCzech Republic has one of the richest economies in Eastern Europe. According to Trading Economies (2016), the country had GDP of $ 205.52 in 2014. The mean income of the average citizen is $ 20,000 with a population of slightly above 10 million people (Trading Economies, 2016). Apparently, the Czech economy is attractive and presents the ABC Washing Machine company with the outstanding business opportunities on the international level.

As mentioned earlier, the Czech economy grants ABC Company an excellent possibility of expanding its international sector due to the fact that the average annual income of $20,000 provides the company with the target market that has a high purchasing power. Thus, most of the Czech people can afford to buy the produced output. Moreover, the country has a GDP of $205.52 which guarantees the economic stability regardless of any investment made by ABC Company (Trading Economies, 2016). Another significant aspect is that diverse types of front load washers and dryers are offered to Czech vendees at the reasonable prices.

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The dominant economic branches of every country have different working requirements regarding the machinery. Therefore, it plays an important role in a successful business collaboration that the major economic sectors in Czech Republic are service, industry/manufacturing, and agriculture which account for 62.3 %, 35% and 2.8 % of the GDP respectively (Czech Ministry of Foreign Affairs, 2016). Statistics shows that 40% of the employed Czech people work in the industry/ manufacturing sphere (Trading Economies, 2016).ABC Company ought to make sure that all the machines meet the standards of each economic sector of the country separately.

However, the political instability in Czech Republic may appear to be rather challenging factor which demands a special attention from the ABC Company. The country has faced major political problems recently resulting in changing 6 prime ministers in 8 years. Nevertheless, the legislative framework of the country stayed stable and continues to protect the interests of the business community. Thus, ABC Company is prone to having a good legal environment for its operations.

Product differentiation and alteration strategies are important marketing elements that ABC Company will have to consider while entering the Czech Republic market (Daniels, Radebaugh, & Sullivan, 2015). As highlighted before, the diversity of the country’s economic sectors is a key point that should be taken into account concerning product diversification and alteration. All the products are to be customized to the particular operating conditions of the three sectors accordingly. More than that, ABC Company has to divide the cleaning and drying machines into 2 distinct types: domestic and commercial use. The 10 million people population would become a sufficient domestic market whereas a wide diversification of the production into several clients’ levels would obtain all the commercial purposes.

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Business cooperation with Czech Republic will require an implementation of a marketing mix approach which includes many critical elements that are highly valuable for the target market (Zeithaml, Bitner, & Grem, 2010). A seven point approach that consists of the traditional 7 P’s (product, place, price and promotion to people, process and physical evidence) should be used by the ABC Company as they work with Czech Republic (Daniels, Radebaugh, & Sullivan, 2015). Firstly, the production must be designed relaying on the multiplicity strategy which will enable the ABC Company to sell its output in the new economic surrounding. Secondly, the most convenient price for the market has to be provided. Thirdly, it is essential to have an effective supply chain that would ensure that the products are available at the places requested by the customers (Shen, 2006). Over and above, the company ought to apply the integrated promotion strategies that enhance its visibility and market awareness of the offered products. Withal, ABC Company must constantly support and encourage its employees in order to stimulate them and increase their competitiveness. Market salesmen and engineers who would provide all the after sale services should be an integral part of human resources management team. In addition, the company must track and review its business activities refining customer service and care (Shen, 2006). Lastly, such strategies as having sales and service stores, warranty policies and powerful online presence are vital for leading an effective business.

The right people working in the human resources and a high level of competitiveness are the outcomes of the strong workforce in the company. Hence, ABC should pay a special attention to the effective staffing approaches. The three main staffing approaches are ethnocentric, polycentric and regiocentric (Daniels, Radebaugh, & Sullivan, 2015). The ethnocentric staffing approach transfers the most important positions to the foreign country company from the company’s home country (Collings & Scullion, 2006). The advantage of this approach is that the values and ideals of the company are maintained in the foreign subsidiary. The main disadvantage is that the expatriates may not be able to integrate into the foreign culture.

The polycentric staffing approach is when the company employs the staff from the subsidiary country. The privilege of it is that the employees from the home country understand the market dynamics very well and are able to provide the customized solutions to the foreign country. On the other hand, the drawback is that the corporate culture developed in the home country may be lost abroad.

Finally, the regiocentric staffing resembles a polycentric approach but group the subsidiaries in the one region together to develop their own policies (Shen, 2006). The asset of this approach is that it customizes the corporate culture to the regional market dynamics. Nonetheless, the risk of losing global standardization possesses a major danger. Summarizing all the pros and cons, the company is recommended to use both polycentric and ethnocentric staffing approaches benefiting from the advantages provided by the two of them.

In conclusion, this essay discussed the various marketing elements that ABC Company should take into account when entering the Czech Republic market. The work indicated that the country has a strong economy with a purchasing power that provides the company with a mighty production potential. It was also argued that the product differentiation should be aligned with the target market requirements divided by the manufacturing/ industry, agriculture, and service industries. The company is advised to use the 7 P’s of marketing to enhance the chances for success in the foreign market. Finally, it would be the best for the company to apply a mix of polycentric and ethnocentric staffing approaches to guarantee the productive work of its employees.