Strategic Marketing Assignment: Initiation Of Take-Away Services By Costa do Sol In Portugal
Question
Task: You are a senior marketing consultant working for Ashanti Marketing Solutions (AMS) Limited. You have just been commissioned by a company that wants to enter a suitable country with a new product or service. The problem is that, they do not know the kind of product or service to offer within the country you will be recommending. Your task is to produce a report on strategic marketing assignment on their behalf answering the following questions:
1. Recommend a product or service and a country and provide a macro-environmental analysis (PESTEL) explaining the possible opportunities as well as threats your client could face within the market of your recommended country and provide possible solutions.
2. Critically assess three modes of market-entry that could be suitable to your client. Out the three options, make a recommendation with justification as to the most appropriate one.
3. Applying the concepts of market segmentation and targeting critically evaluate the potential target market of your client.
4. Applying Porter’s generic strategy, explain how your client could gain competitive advantage in the new market by adopting one of the generic strategies in your recommended market.
Answer
Introduction
Being a senior marketing consultant in Ashanti marketing solutions, a detailed report of a product and services accompanying effective entry into a new market will be processed. Here in this report, a Mozambique originated Costa do Sol restaurant intend to initiate take away services into the new international market of Portugal effectively have been analysed. For that, a strategic marketing evaluation is going to be presented in this report. The main objective of this report is to provide a macro environment analysis of the proposed new country that is Portugal, for understanding that market effectiveness and, along with that, to predict whether this new approach country will become an opportunity for the company or become a threat. The primary significance of this report is to highlight which market mode of entry will be most suitable for the restaurant who will be their target customers significantly.
Pestle Analysis
|
Factors |
Description |
Impact |
|
Political factor |
In the mixed economy, political factors are the most significant aspects because they strongly influence the operational business process. In Portugal political party's ideology, political stability is not so high. However, the country is highly supported and advanced in hospitality services that are why the rate of tourists coming to this country is very high (Shen, Puig and Paul, 2017). This is highly beneficial for the company to capture new customers. Though this country is politically unstable, the licence and other regulatory permit activities are very smooth to obtain. Hence based on this observation, this might be an opportunity for the restaurant Costa to do sol take away service for establishing a business here. |
High |
|
Economical factor |
The GDP rate of this country is gradually increasing, and this country's economic condition is quite strong (Dolnicar, Grün, and Leisch, 2018). That is a good sign for a company successful establishment. However, the tax rate and other service rate in this country are very high. This is not a good indication and can effectively cause difficulties for the business to initiate a taking service, thereby marinating the quality of the product very much superior effectively. These factors can become a massive threat to the company. |
Very high |
|
Social factor |
The diverse culture in this country Portugal has a lot to offer for the business in Portugal effectively and these country populations lifestyle busy schedule make them going out for foods from the restaurant and this going to be massive support for Costa do Sol restaurant if they decided to expand their business in Portugal (Dolnicar, Grün and Leisch, 2018). Furthermore, many holiday and vacation destinations attract a large bulk of tourists in this country every year that is a potential benefit for the company. Hence this could be an opportunity for the company to takeaway services effectively. |
Very high |
|
Technological factor |
Portugal is known to be a technologically developing country, and the food industry is very much digitised. There are operational services that are very accurate and efficient; the delivery process of this country is very tech savvy with on tracking system, using NFC technology for payment, Digitised infrastructure and many more(Lindsay, Rod and Ashill, 2017). However, the availability of experienced tech employees is very high, but their charges are very costly. Hence the overall technological factors of Portugal are a great opportunity for the company. |
Moderate |
|
Legal factor |
Establishing an entire product and services into a new market country is not an easy job to do, This comes with lots of legal rules, regulations, protocols, lengthy paperwork's and formalities, and this often delays the operational business process; however, on the other hand, this makes the business establish solid and also helps to gain legal supports effectively. Hence this is an opportunity for Costa do Sol. |
High |
|
Environmental factor |
The entire Portugal market industry is leading towards sustainable management. Along with that, they are approaching all possible solutions that can reduce the pollution level of the company, such as recycling, composting, reducing the number of wastes etc. This is a magnificent gesture and works as an opportunity for the company to establish a healthy and sustainable food takeaway service effectively. |
Moderate |
|
Cost leadership Strategy |
By opting for this strategy, the company is mainly dedicated to the cost-reducing reduction for the produces to increase the company's profit margin effectively. |
|
Differentiation leadership Strategy |
As per Perera (2017), the central concept of this type of strategy is that, in this case, the company focuses on making a difference in their products and services that creates uniqueness and provide extra benefits than other competitors effectively. |
|
Cost focus strategy |
In this approach, the company is mainly dedicated to developing effective services that will stand out among the crown while maintaining the cost of the process effectively. |
|
Differentiation Focus Strategy |
In this generic strategy approach, the company opts to enter the niche marketplace whole, ensuring that the uniqueness remains consistent. |
Figure1: Porters Generic Strategies
(Source:Perera, 2017)
|
Market Entry Modes |
Description |
|
Franchising |
Franchising is one most effective market modes of entry that have the potential to support the company to expand their business into a new market without having many risk possibilities in the establishment process effectively. In this market entry approach, the company will pay commission to use the brand name, business services and trademark of their takeaway process. In this, the entire gathered profit, as well as loss, will be divided with respective parties who are in this franchising process. |
|
Joint Venture |
As per Jafari and Othman Soleiman (2020), when entering into a new market country, hence in the case of Portugal, the culture social ethics, values and business process approach is different from the company's origin country that is Mozambique, and that is why having prior knowledge business expertise and process of the new market is highly required for better adjustment in the new market of Portugal effectively. |
|
Wholly own subsidiary |
In this mode of foreign market entry, the restaurant itself takes the entire ownership of the business entry in the market of Portugal. Therefore every regulatory activity will be required to fulfil by the company itself. |
Justification
Porters generic strategy
For the restaurant Costa do Sol in establishing new food takeaway in the country market of Portugal, the most suitable strategy that the company should opt for will be Differentiation leadership strategy as this will ensure that the organisation capture the market attention too early and achieve stability faster than anyone effectively.
Conclusion
From this strategic marketing report, it can be concluded that the restaurant Costa do Sol has a good indication for success in the new international market Portugal due to its high economic growth rate, economic stability, political influence, and technological advancement effectively. The diverse culture in this Portugal and tourist destination of the country has the potential advantage for the restaurant to establish business and gain success at a rapid rate effectively. This report successfully highlights that the majority of target customers will be the working professionals aged from 20 to 40 and all types of income people are welcome in this takeaway service. Overall, this country, Portugal, has a lot of opportunity factors to offer the restaurant, Costa Do Sol. This is the main reason they should choose this country for their new business services expansion effectively.
Reference List
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Dolnicar, S., Grün, B. and Leisch, F., (2018). Market segmentation analysis: Understanding it, doing it, and making it functional (p. 324). Springer Nature.https://library.oapen.org/bitstream/handle/20.500.12657/23073/1007085.pdf sequence=1
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Schellenberg, M., Harker, M.J. and Jafari, A., (2018). International market entry mode–a systematic literature review. Journal of Strategic Marketing, 26(7), pp.601-627.https://strathprints.strath.ac.uk/60429/1/Schellenberg_etal_JSM_2017_International_market_entry_mode_a_systematic.pdf
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