January 10th, 2018
Management plan for Himin
Timeline of Operations in China
The Australian market has a great potential for the development of solar water heater business. With the increasing clamour to shift to more environmentally sound energy sources, solar water heaters presents one of the best candidates to replace electric heaters in meeting the high domestic energy needs for the population (Kinrade 2007). On realizing this potential in the market, Himin is evaluating expanding into the market by setting up an operation centre. The structures that the company has envisaged to be vital for successful business operations in the market are discussed in subsequent sections.
Market Entry and Promotion Strategy
On identifying the potential for its solar water heater business in Australia, Himin decided to make direct investment in the country. This was after a careful evaluation of alternative entry modes such as exporting and joint ventures. Out of the incentives that the Australian government offers for solar water heating businesses such as rebates, the company was in the view that its presence as an independent entity would help its partnership with the government (Commonwealth of Australia, 2007; Kinrade, 2007). Further the country’s relative rating on starting and ease of doing business in a joint report by the World Bank [WB] and International Finance Corporation [IFC] (2009) informed the decision to set shop in the country. Other aspects such as legal issues, control the firm intends to remain with in its market operations and communication and distance challenges were also considered (WB & IFC, 2009; Darling & Seristö, 2004).
To set up successful operations in the market the company first made a strategic plan on the marketing operations it intends to use (Darling & Seristö, 2004). These include adoption of its mission “focus on sustainability” on its foreign operations (Himin, 2007). Through such a mission the company has set up goals such as achieving a 10 percent market share on its second year of operations, obtain a five percent profit margin by the third year of operation and expand its operations to all the cities and main important rural markets by the fifth year of operation (Darling & Seristö, 2004).
To make such objectives realizable the company first intends to institute aggressive advertisement campaigns to promote its brand. The continuous advertisement campaigns are to run in both in the print and mass media starting one week before the launch of its products. To manage the media campaign the company intends to hire services of an advertising agency that will control the advertisements and prepare for the product launch. The advertisements are destined to demonstrate the superior quality of the company’s products over the ones that exist currently in the market as a way of establishing a considerable market share. Having evaluated various technologies such as the flat-plate and evacuated tube models over years in the Chinese market, Himin has gained adequate experience to develop high quality products for the Australian market (Himin, 2007).
Other promotion activities that the company intends to run are network based activities aimed at consolidating its customer base and loyalty. These would include discounted purchase and installation prices, providing maintenance guarantees for five years and providing timely customer support. Further to boost its corporate image among the population, the company intends to partner with the communities in which it will conduct business on aspects such as environmental conservation projects. Through these activities the company intends to develop a perception of not only being a people’s partner in cost reduction but also an ethical player.
For effective customer service the company intends to immediately set up a business website with round the clock live support. The website would also be used for marketing activities such as price displays and providing information to customers on such aspects as maintenance of solar water heater systems. In later stages the company’s career section on its website would serve as an important staff recruitment tool (Breaugh, 2008).
Other marketing considerations that the company has evaluated include setting up a warehouse in every territory by the fifth year of its operations in accordance with its marketing objectives (Darling & Seristö, 2004). Through this strategy the entity intends to make its products easily accessible for its customers. Initially however the company intends to run two warehouses, one serving the New South Wales territory which will be located in the capital territory and a second serving the Queensland region. Through these warehouses the company has intends to establish a wide distributor network that also will pilot the expansion program to other territories. Qualifications such as minimum capital requirements and period of existence in the region of distributorship are core characteristics that the company intends to use to vet the distributors that it will engage for its products.
These extensive marketing plans are what the company envisages would help differentiate its brand from existing brands. Marketing activities are thus projected to occupy a substantial portion (approximately 20 percent) of the planned expansion budget in the initial years of establishment. With a considerable market share being realised, the company will switch to less costly marketing approaches such as network marketing as a cost control mechanism to achieve the required profitability ratio by the third year of operations. Go to part 2 here.