INTRODUCTION

Asia is not a continent renowned as a free entreprise economy. The government plays an
active role in the business sector, and surveys consistently on how to attract foreign
investors and at the same time protect the indigeneous producers. However, before setting
up buisness in any of the Asian countries, there are some factors that needs to be
considered. This assignement will focus on a comapny going to India and the factors
considered are fully discussed in the paragraphs below.

COMPANY BACKGROUND
WAX CHEMICALS INCORPORATION is one of the worlds leading chemical manufacturing company
for both home and industrial use with employees more than 350 in twelve offices located in London,
Dallas, Dubai, Nigeria, Brazil and Sydney. The company is part of the Collinson Group, which has
many associated companies across the globe in the field of manufacturing, insurance and marketing.
Wax Chemicals has extensive experience in development of chemicals for hygienic living at home
and preservative for sealed food as a result of constant research by their research and development
team. The company currently supply more than 300 blue chip clients in over 47 countries worldwide,
including Cadbury and Coca- cola.
Regardless of the company's global expansion and experience in cross border business. India is the
new emerging market where the company hope to extend it tentacles in few months and tap into
the opportunities available in India.
Companies choose different modes of entry to penetrate a market, including FDI, exporting,
licensing, and joint ventures. The choice of entry is determined by the host country such as foreign
direct investment regulations, antitrust laws, labour laws, political stability and even patent
protection. This paper provides the report on integrated and coordinated activities that needs to be
considered before setting up the business or expanding to India.
TASK ENVIRONMENTAL ANALYSIS
Before going global or setting up business in Asia, Wax Chemicals must first analyse their
internal environment. If a business is thinking about expanding globally, the company is
already doing something right to have reached this point just like in the case of Wax
Chemicals but not taken anything for granted because of frequent dynamism in the global
economy. However, that does not stop the importance of assessing its strengths and its
weaknesses to determine the approach that should be taken into India market. There are
several issues that should be addressed such as the organisational structure, how effective
is the present strategies and examine how well the company is prepared to approach the
global market such as the company financial state. SWOT can be used which would
determine the Strength, Weakness, Opportunities and Threats that lies within the company.
this is important, so that it can be quickly addressed in other not to affect the company
globally.
Strength and Weakness
Opportunities and Threats
INDUSTRIAL MARKET ANALYSIS
A market analysis studies the attractiveness and the dynamics of a special market within a
special industry. Industrial market analysis focus on understanding the behaviour of
existing operators or manufacturers in the industry or similar to it. Conduction of this
analysis for the product is crucial as it would contribute to the mode of entry and marketing
strategies to adopt during operation.








Rivalry Among Existing Competitors: In India there is handful of companies involved in
chemical industry. Moreover there are a lot of retailers in the market. There are Tata
chemicals, Himadri Chem, Panama Petro and many other small retailers. Also many small
middlemen import from China and sell it at a relatively low price in the market. This
indicates that competition in the industry is very high.
Bargaining Power of Suppliers: The bargaining power of suppliers is low as a result of well
established relationship with suppliers in the previous production country. Also, India is
close to the company suppliers from China, which makes it obvious and possible for the
company to negotiate even for reduction in price because of the close proximity to each
other. However, quality of the raw materials will remain thesame.
Bargaining Power of Buyers: In this particular indusrty in India, there is a huge war going on
between the middlemen and those importing directly from china. Presenting buyers with so
many alternatives. They can choose from numerous manufaturers, so bargaining of buyers
is very high.
Threats of New Entrants: Become a major player in the industry; the firm needs to invest a
lot of money, need to establish relation with suppliers, select suitablelocations for outlets.
These will require a lot patience and capital. So it is safe to say that thethreats of new
entrants are high if competitors want to do business for a long term.
Threats of Substitutes: The threats of substitute is low because they are not common
products, mostly for the manufacturing company. It is either the consumer purchase the
chemicals and use it for its purpose or not.
BROAD ENVIRONMENTAL ANALYSIS
Broad environment is the conditions, entities, events, and factors sorrounding an
organisation that influence its activities and choices and determine opportunities and risk. it
is also called the operating environment. This environment is always beyond organisational
control and it consist of several factors to consider if organisation desire to thrive. Those
factors includes:







Political-Legal Environment: There are no data about the political influence over the
industry. Though it is anticipated that the organizations are heavily supervised by the
government in order to make sure necessary safety measures are in place for the worker
because of the product nature. There are many departments involved in the process of
controlling and managing the corporations. The political situation look stable because of the
just concluded free and fair election and the political parties respect the agreements made
between the MNCs and the government which will ensures a healthy business environment.
Economic Environment: As India economy continues to grow from strength to strength, it
offers valuable opportunities for multinationals exploring inbound investments, and local
companies expanding overseas, productivity and wealth that influence purchasing power.
The gross domestic product (GDP) for the fist quota was 5.5%. The country economy was
listed among the emerging market alongside Brazil, Russia, India and China (BRIC). In flocks
of multinational company which has increase the income of the consumers. As a result of
this, company will experience a shift in demand for better.
Technological Environment: India is one of the technological hub in Asia and know how is
up to the company standard. The company technological devices can easily be run and
repaired by their engineers. Research and development team can easily work because
government regularities is less.
Ecological Environment: In India, there is a dedicated area for industries according to their
products. This is possible as a result of india land mass. However, manufacturing get to take
operate close to their resources, aware of the opportunities and threats and companies
with waste can travel far to dispose it.
Social Demographic Environment: This is the statistical study of human population, family
size, structure, education, and ethnics. This is very important for the company in other to
succeed. India as the second most populous nation in the world, opportunies abound and
threats is inevitable aswell. As a result of the huge population, demand is on the high side
and because Wax Chemicals specializes in manufacturing chemicals for companies like
cadbury and coca- cola, the more the buying company produce it will reflect on the
supplying company which is Wax chemicals.
There are diverse ethnics in India, but this will not affect Wax chemicals because majority
drink coca-cola and the cost is relatively low. Although, level of education in the major cities
is very high and they prefer special quality products. According to Maslow Hierachy of needs
in its second stage, these few elites are concern about safety. They want the impact of the
chemicals used as preservatives to be minimal because they are aware of the consequences.
Also, Indians are family oriented people and they purchase more of this product especially
during the festive seasons. However, there is geographical shift in population from rural
areas to the urban which is still favourable to the company because the urban areas are the
first target market.
Cultural Environment:




FORMULATION OF MARKETING STRATEGY
After the effectctive study of task, broad and industrial environment, organisations should
have full understanding about there target market and positioning of the product becomes
priority. However, a product can be well position by using Marketing Mix strategy.
Marketing mix is the set of controllable, tactical marketing tools that a company uses to
produce a desired response from its target market. It consists of everything that a company
can do to influence demand for its product. In addition, it helps marketing planning and
execution. It iss used by marketers to rope in as many customers as possible, so as to gain
maximum profits. This marketing mix comprises of four components which includes
Product, Price, Place and Promotion.
Product: In developing marketing strategies, what the customer want from the product, are
there any features that is missing out, are you including costly features that the customer
would not actually use, what is it to be called, how is it branded, how is it differentiated
versus your competitors, what is the most it can cost to provide, and still be sold sufficiently
profitably. All these factors will determine and contribute to the positioning of the product
offering
Price: The sole objective of any firm is to make profits, so setting the right price is crucial.
the price of the product has to be such that it ropes in maximum profits. Costs involved in
manufacturing the product distributin and promotional cost must be put into cosideration
before setting the price. Due to high competition in this industry in India, it is important to
put how much the customers are willing to pay including the competitors into
consideration. The product must not be over or under price and quality must match the
price.
Place: Convinient location where buyers look for the product or service, how can they
access the right distribution channels, is sales force needed or to attend trade fairs, what do
the competitors do and what can be learn from it that wil differentiate Wax chemicals. Since
India is quite high in technology, online sales will give the company a competitive
advantage. Where customers can easily place orders, view product line while the company
need not wasting money in opening more bricks stores.
Promotions: Promotion is any measure the company can take to increase awareness about
the product. It can be done indirectly through advertisement on television, internet or
directly through mails, phone calls. Often times it is inform of price reduction on products.
For example, buy one get another free.
For a new company starting operations abroad, effective and efficient marketing strategy
must be determined before deciding on there mode of entry, because investors want to
know forecasted profit percentage. They go by the principle of if much is invested, much is
expected. Therefore, accurate and befiting marketing strategy is vital to know there income
which would then reflect on the start-up capital.

MODE OF ENTRY
This is the method or approach to a particular country or target market to position a specific
market offering. There are different mode of entry which companies can use depending on
their product, the host country and strategies adopted. In the case of Wax Chemicals, the
mode of entry adopted is Direct Investment
Direct Investment
Direct investment is the development of foreign based assembly or manufacturing facilities.
This involves the company's financial involvement in the set up and operations. Wax
Chemicals, has decided to expand to India through this mode of entry because of the
market size, cheap labour, availability of 75% of resources, government incentives for
5years, freight savings which will help reduce cost of production as a result of easy
connectivity in Asia. Furthermore, this mode will promote the company image in India and
other Asia region because it will enhance job creation, foster better relationship with the
government because of the inflow of capital, customers and it will enable the products
adapts better to the environment.
In addition, Wax Chemicals get to have full control over its company, investments and
develop manufacturing and marketing policies to its advantage. However, it is capital
intensive but because of the Wax Chemicals track record, this seems not to be a problem.