Cochlear Limited Marketing Strategy: Analysis Of Market Entering Possibility In Singapore
Task: Provide a short note over the cochlear limited marketing strategy.
The task of expanding the customer base and business on a global basis is not a piece of cake for any institute. There should be extra time and effort which should be implied from the behalf of the management of the company. The expansion of the company is very crucial in increasing turnover and market share. In the global market, an organization has to travel a plethora of restrictions and challenges to achieve its major task of market expansion. A lot of studies and research have to be conducted to draft a better strategy otherwise the plan to expand would get sabotaged by the competitors. The culture and the specific market of the local country should be understood and studied by the management of the company so that the process should be conducted very effortlessly (Marketing91, 2000). The instance of Cochlear limited and its expansion policies are being considered in this report on Cochlear limited marketing strategy. The major focus is being given on the description of the challenges faced by the company as a whole is expanding the market in a different company as compared to the local operational market (Ahlstrom, 2010). Very detailed insight into the current position and the turnover of the company was analyzed by the board before moving on to commence the expansion activities. The position of the company before and after implying the expansion policies are effectively mentioned in the below-drafted report on Cochlear's limited marketing strategy. Various tools were used by the company to understand the existing weakness in the business processes and to concentrate on them to increase the efficiency and leakage of financial resources. The systematic implementation of the market analysis tools like the Boston matrix, SWOT analysis, etc. is done in this report on the Cochlear limited strategy market to ascertain the impact of the decisions made by the company on the global market (Rameshan, 2006).
In the local market of the Australian market, the organization of Cochlear limited is well known for delivering quality advice and hearing solutions to its clients. For around three decades, clients all over the world are being delivered quality services on behalf of the company. In the current scenario, the cochlear is considered to be a reliable brand and is dominating the global consulting market. It is the vast franchise network of the company which is making the business processes of the company possible all over the globe. From the period of its inception, the company has followed the strict policy of providing high-quality products to its customers. No comprise is being made on the factor of quality and the same approach has made them a reliable option for the vast number of customers. The surveys conducted by the company proves that the customers of Cochlear limited are well satisfied with the high quality and consistent service. Since the customer service is the company's strongest factor, various innovative steps were made by the management to utilize the most out of this cutting edge. Because of the continuous innovative steps and thorough research, the current system of the company possesses a very sophisticated and efficient customer information system that is well versed in providing customized service to the customers (Philip, 2014). The company has also made a commendable effort in providing the customers with innovative products and as a part of which they have delivered advanced devices which helps the deaf person to hear. A large amount of funds from the annual budget and effort is envisaged for further researches so that the delivery of the premium quality in the products should be ascertained. If there happens any dip in the quality of the product, the customers would change their loyalty and would opt for a substitute product. As the company has established itself as a reputable brand on the global platform, it has now shifted its policy towards attaining balanced and sustainable growth through innovative strategies (Gupta, 2014).
In the international platform, the Cochlear limited is deemed as the organization which has no specific base in any local market. It is by only the sophisticated approach and adopting practical wisdom that the cochlear company had sustained its dominant process (Cochlear, 2013). As per the statement provided by the CEO of the company, Chris Robert, the company has struggled on the international platform for around 30 years. The company has made the most of the data provided by the report of Access Economies which stated that 16.67 % of the Australian people are affected with hearing disabilities. The rate of people affected with the defects in hearing abilities is increasing at a very fast pace and it is expected that the affected people would sum up to 25% of the whole Australian population by the year 2050. The better market for the company is the local economy of Singapore which considers the factors of efficiency, quality, integrity, and globalization as one of its crucial principles. As per international bodies like WTO and IMF, the economy of Singapore provides for the highest ease of doing business which provides for a very prosperous environment for corporate organizations. The presence of high availability of infrastructures and very low corporate taxes would turn out very helpful for the companies if they possess in-depth knowledge of the economies. The operation in the economy of Singapore would also provide the company with a tactical position to move on with the expansion activities of the business in the countries of Asian Pacific regions. An in-depth analysis of both the external and internal operative environment of the company should be conducted to understand the effects and intentions behind the cochlear limited marketing strategy. For the better analysis of the operational environment of the cochlear limited, tools like PESTLE analysis and porter’s five force model, and value chain analysis is used in this report on cochlear limited marketing strategy (Utkarsh 2015). Both the effectiveness of the cochlear limited marketing strategy and the relevance of expanding the manufacturing process to Singapore is being discussed very elaborately in this report. The report would be helpful for the companies in providing recommendations regarding the implication of global marketing strategy.
PEST Analysis: The factors regarding the fields of politics, environment, social, and technical are being taken into account while using the PEST analysis. The Pest tool would provide the reader with insight over the external environment in which the cochlear limited company is operating.
Political: In this section, the various policies adopted by the governing bodies towards the corporate environment are evaluated. All the major interventions and policy changes of the government in the local economy are considered in this section. The sections of the manufacturing, health, infrastructure, availability of resources, etc. would get affected by the policies of the government and hence would make different impacts on different organizations. The laws existing in different countries should be understood by the management of the cochlear limited company since they would be different in every country and all the activities of the company should be in accordance with the local laws. To comply with this condition, the company may have to amend its traditional approach and ideology (Nelson and Smith, 2007). In the case f the political environment of Singapore, it is very favorable for the business of the cochlear limited company. By the implementation f the cochlear limited marketing strategy in the local economy of Singapore, the company could reap the maximum of the profit. Systematic collection of tax and its small rate in Singapore also roves to be a haven for the business of the company. Though strict medical laws and regulations may turn out to be a major challenge for the business of the company. The company should customize its products so that they should comply with the medical protocols of Singapore (Vandenabeele, 2006).
Economic: The local economy of Singapore is a very dynamic and viable one and provides great opportunities for external entrants and investors. The most commendable feature of the economy of Singapore is the high availability of the quality infrastructures which is very crucial for starting up immense manufacturing units. It is because of the less corruption along with high transparency in the business procedures and a large number of investors which fosters the business of cochlear limited in the soil of Singapore. Since the company has long experience of operating its business in the dynamic economies of the nation like France, Britain, Switzerland, and Germany commencing its business in Singapore would not be much of a challenge to the management of the cochlear limited company.
Social: It is the social elements of a specific area that would pose to be the foremost factor in drafting the cochlear limited marketing strategy. The population of Singapore is growing at a very fast pace and if analyzed the population thoroughly, it could be observed by the management team of cochlear limited that the products of the company have high potential in the local market. Since the growing population of Singapore has a high per capita income, the factor would be very positive for the cochlear limited. The medical technology is growing at an exponential rate in the country and it would provide a cutting edge for the company as compared to its competitors.
Technology: For the evolution of a technically advanced and sophisticated product that would satisfy the intended need of the customer, the operational environment should support the comprehensive development of the technology. It is by the innovative researches conducted by the company in the medical science that the cochlear limited company has been able to deliver its product to the population. The technical knowledge of the knowledge is now much vast to the extent that the products are very long-lasting and any sort of malfunction is to the minimal level (Cullen, 2013). The target of the company to achieve the maximum level of customer satisfaction only by the implementation of superior technology.
Porter’s five forces analysis
A total of five-factor have to be examined by the company as per the business specialist Michael E Porter. These five factors have the potential to change the course of the business on an upright course. This tool also considers the factors which come under the category of external influences. The major factor which determines the existence of the company in the economy is the level of competition existing in the market. It is the quality of the products delivered by the company that would determine the level of rivalry in the existing market. If the quality products are provided in the market at a relatively lower and cheaper price, then the company would attract much more fierce competition. Below are discussed the factors to be analyzed under the tool of Porter's five forces. Let us have a detailed look at it.
Level of rivalry existing in the existing market: The prevalence of this factor seems to be very high in the economy of Singapore. Since medical technology is evolving on a dynamic basis, the number of competitors is very high in the market. Hence the company is facing very fierce competition in the market (Patibandla, 2006). Though the present situation of Cochlear is very dominating in the medical instrument market, the high level of competition from its rival is posing to be a very great risk to its dominance. Companies like Starkey, Oticon Resound, Phonak, Advanced Bionics, Sonic, etc. are some mentionable competitors of Cochlear limited company. The researches on the hearing aid instruments are being done by the competitors very viciously and hence the quality parameter for the viable hearing is a challenge frequently by the parameters. The company needs to update its product models by installing the most modern technologies so that it could sustain its dominance on the global market. Hence by the evaluation of this parameter, it could be ascertained that the economy of Singapore is full of rivals for the cochlear company.
Bargaining Power of the Buyers: In the local economy, the suppliers of Singapore possess very high bargaining power because of the high availability of substitutes and high per capita income. To suffice the needs of the buyers in the market, the company has conducted a lot of research in the field of scientific technology. Only if the company officials have knowledge of the latest technology, the new models with the most modern features could be made available to the customers. Since there is no lack of substitutes for the products of the cochlear limited the suppliers hold very high bargaining power in the global market. The distributors of the company also hold a significant level of control over the market, and if the company fails to provide the required perks to the distributors on a timely basis, they would change their allegiance to the competing organizations (Cullen, 2013). The company should recruit the suppliers only after analyzing their efficiency and the quality of the products should never be compromised until reaches the hand of the customers. Hence after the detailed analysis of the cochlear limited marketing strategy, it could be stated that the bargaining power of the suppliers is much high in the local economy of Singapore.
Bargaining power of the buyers: If analyzed the cochlear limited marketing strategy, it could be observed that the bargaining power of the buyers in Singapore local economy is quite low compared to the normal parameter. It is one of the magnitude of the demand and supply that the bargaining power of the buyers is measured. The total demand for hearing aids all over the world is very high and though after the accelerated manufacturing process adopted by various companies only 10 % of the demand is fulfilled. Hence it is very evident that the demand for cochlear limited would have very high demand in the market. Only after a significant amount of time, the cochlear limited company could prepare itself to meet the demand existing all over the world. The current unavailability of the hearing aid is limiting the bargaining power of the buyers. Hence the market of the hearing aids still holds very large potential for the new entrants. The current market scenario for sure provides the cochlear limited company with a large and evident cutting edge.
The threat of new entrants: If taken into account the present situation of this report on cochlear limited marketing strategy, the magnitude of the risk of new entrants in the cochlear company’s operative market is considerably low. If a new company tried to enter into the market of the medical aids, first of all, it should possess sound financial stability since it requires an investment in very large magnitude. The financial requirement is the largest factor that posing to be a hindrance to the new entrants in the market. Not only in the inception but to sustain in the market the company has to conduct large research and development project which in itself demands a large amount of money. Customers are very cautious in the matter of selecting medical aids and would only try to select the products which have established itself as a reliable one in the market. No person would try to take the risk when it comes to the matter of his health and life. The current market for medical aid is being occupied by the companies which have gained a lot of goodwill and brand value. Though even the existing manufacturers have to conduct required augmentation and upgrade in the models so that the requirements of the customers should be met. Because of the high demand for finance and indulgence, the new entrants have to go through immense interferences. These factors would discourage new investors in the market. Thus the cochlear limited do not face any significant threat from the new entrants in the market.
The threat of substitute products: As mentioned in the previous section of this report on cochlear limited marketing strategy, the major motive of the company is to provide its customers with quality hearing aids. The major challenge for the products of cochlear limited companies is the external hearing aid products. Though the external hearing aid kits are not preferred by most of the customers since they are not a permanent and convenient solution for the hearing problems. Though the products of cochlear limited are not that much effective and could not alleviate the problem of deafness completely. However, the products of cochlear limited have proven itself to be the best choice to have opted against the hearing problems. Thus, the company does not need to focus on the substitute in the current scenario. Because of the less knowledge regarding the technology, the chance of the new entrants and substitutes is considerably low.
Strategic Positioning: To increase the engagement in the existing market, the companies make the maximum use of the strategic positioning by the companies. The first major step of the company in the process of marketing is deciding the targeted market and it is only after it that the intended image of the products could be decided. It is in this stage that the major decisions regarding advertising and marketing are taken by the director’s body. As per the major corporate scholars' Trout and Ries in the year 1969, the concept of strategic positioning pertains to filling a slot or staking out turf mechanism. This mechanism would help in making the intended image among the customers (Anonymous 2008). The major relation or the influence of the strategic positioning is with the genre of customers rather than the common notion that it is related to the products of the company. In the initial stage of the strategic positioning, the major competitive or related product existing in the market is determined (Piercy 2008). The unique feature of the introduced product is determined by comparing to its substitutes is done in the second stage of the process of strategic positioning. The basic motive of implying the process of strategic positioning to estimate the future position of products among the market. For this purpose, various hidden opportunities in the targeted market are revealed out so that the product should be placed among the customers in the intended position. The management is free to use any tool to imply strategic positioning effectively.
The major utilized by the management of the corporate for strategic positioning of the product all over the world is either BCG Matrix (Boston Consultation Group) or Swot analysis. The highest share of the market is being denoted by the parameter of Cash Cows and it is the BCG matrix which helps to trace out the low market share. The parameter which is used to denote the low market share in the operational environment is the Dogs. The companies along with the shareholders who possess the lion share of the targeted market are denoted by the term Stars.
Country Entry Analysis
Economist Model in Singapore: The local economy of Singapore is being tagged as a very dynamic and high-income company by the latest financial report published by the world bank. As per the financial report of 2014, the gross national income of the company could sum up to 55150 US dollars when calculated by the methodology of ATLAS. As compared to the global environment, the local economy of Singapore provides the investors with the highest ease of doing business. The global agencies mark the economy of Singapore as one of the most competitive markets for investors (World Bank, 2016). The policies delivered by the government of Singapore are very favorable for the trade and investors which has helped the companies a lot of profit.
Market Potential Index of Singapore: It is the global agency of EDGE which publishes the value of the market potential index of each economy every year. By using this indicator various companies could evaluate the potential and market attractiveness of the desired economy. The major beneficiaries of this indicator are the multinational companies and other organizations which operate on foreign soil. The index provides the market potential index for around 26 countries with viable economies. The numerical values of the market potential index could be utilized by the companies to plan their marketing strategies. The same parameter is being utilized by the cochlear company to draft its cochlear limited marketing strategy (Pennisi, 2013). If taken into account the data published by EDGE in the year of 2015, the rate of insolvencies could rise by the rate of 17 % (G 2015).
Country Entry Mode: While making a mark into the economy of a particular country, the companies could implement various types of entry modes. The most prominent form of entry modes utilized by the companies is the approach of acquisition, franchising with local agents, Joint – Ventures with experienced investors, exporting, etc. It should be after analyzing the demerits and merits of implying various country entry modes that the management should imply them in the approach.
- Less cost for exposure.
- Advantages of leverage brand in the entering market.
- Allow for entry into the market gradually.
- Presence of various restrictions via trade laws and tariffs.
- Less influence and control over the dynamics of the market.
- High probability of entering in an altercation with the suppliers.
- Could negate the unnecessary expenditure and taxes.
- Very small expenditure on acquiring the markets.
- Absence of control.
- Heavy dependency on laws and licensing procedures.
- The act of franchising may pose the risk of new entrants in the similar market.
- The companies would also get highly dependent on the franchisee.
- The alliance with the franchise may also lead to the occurrence of altercations.
- Would help in acquiring more control over the potential factors in the market.
- It provides higher financial stability.
- Could reap out most of the profits from the local market knowledge possessed by the franchise.
- Could hep in tackling the hindrances existing in the intended market.
- Augment the ability to control the market and the operational market.
- It requires a high magnitude of financial investment.
- It requires a high level of engagement and practical difficulties.
Exclusively Owned Subsidiary
- High level of influence over the business processes of the company.
- Avoid any leakage of the technical knowledge because of the external partner.
- May incur difficulties and time lag in conducting the daily activities of the company.
- Requires financial investment to acquire the overall ownership.
In the above section of this cochlear limited marketing strategy, various merits and demerits of the country entry mode are being discussed. If analyzed them on a thorough basis, it could be understood that the franchise type of the entry mode is best suitable for entering into the local market of Singapore. By this methodology, the process of exporting and simultaneously the control over the market could be made efficiently.
Level of Centralization
The level of monopoly or the centralization of the cochlear limited in the operational market is very high and hence the number of competitors is very low. The high level of centralization would provide the company with the ability to control the market. If any company attains a considerable level of control over the market, it would attain a very high profit from its business. By providing the customers with very high-quality products all over the period from its inception, the company has developed the image of a very reliable brand on the global platform. In the case of hearing aid, it is the product of cochlear limited which is being preferred by the customers all over the world.
International HR Practices
The major factor which has helped the cochlear limited companies in maintaining its top position in the market is its efficient human resources. The efficient human resources recruited in various departments like sales, marketing, research, etc. work in accordance with the common goal and have provided a high contribution to the company. The Human resource department has conducted various training programs for the employees of the cochlear limited so that the efficient and streamlined effort should be made for attaining the company goals.
Adapting according to the local Market
The management of the company has made a lot of effort to adapt to the market of whatever company they have entered. The thorough analysis of the factors in the market had helped the company in placing it towards the path of success. The expansion of the company has saturated and to sustain it in the market, the company should conduct the research processes continuously.
By making some inferences from the above-provided report on cochlear limited marketing strategy and responses from more than 25000 people it could be ascertained that the business of Cochlear limited is established well all over the world. The management of the company has followed the strict policy od providing the customers with quality products rather than just selling the products on a mass basis. Because of the high sale of quality products by the company, the cochlear limited has attained a significant level of dominance in the global medical aid market. When the company has made its mark into the soil of Singapore, it has focussed itself more on making reliable partnerships. The modifications in the health aid products were made by the cochlear limited by analyzing the problems faced by the customers (R. Griffin, 2015). In this report on cochlear limited marketing strategy, various tools and strategies have been discussed so that the company could be brought to the path of success. The Use of the Ansoff matrix and BCG matrix could be done by the cochlear limited for attaining smooth and efficient business processes. If the company wants itself to be one of the successful companies in the global platform, it should imply proper strategic planning in the business processes.From the analysis done in this report on cochlear limited marketing strategy, it could be understood that the local economy of Singapore provides a very good opportunity for the new investors. The rate of growth of the population in the country is very high and since the population holds a high rate of per capita income, the Cochlear company could reap a large amount of profit from Singapore.
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