COMPANY: TAISEI CORPORATION

NAME: AUDREY OHANUZUE

STUDENT NUMBER: 9527825

MODULE LEADER: ANDREW WILLOCK

MODULE TITLE: INTERNATIONAL DIMENSIONS OF MARKETING

A case of Taisei Corporation entering the UK market.

Contents
SECTION 1....................................................................................................................................3
1.1 COMPANY OVERVIEW........................................................................................3
1.2 MARKETING MIX...............................................................................................3
SECTION 2....................................................................................................................................4
1.2 MACRO-ANALYSIS...........................................................................................4
2.2 MICRO-ANALYSIS..............................................................................................5
2.3 WHY UK:.......................................................................................................6
SECTION 3....................................................................................................................................7
3.1 MARKET ENTRY STRATEGY....................................................................................7
SECTION 4....................................................................................................................................8
4.1 RECOMMENDATION & CONCLUSION..........................................................................8
REFERENCES..............................................................................................................................8
Section 1
1.1 Company Overview

Taisei Corporation is a Japanese company established in 1873, headquartered in Japan

specialising in Construction, Civil Engineering and Real Estates services. It currently operates
across Middle East, North Africa and Asia (MarketLine 2018), with an operating income of
140Bn JPY (Taisei Corporation, 2019).

1.2 Marketing Mix

According to Palmer (2004) Marketing mix is simply a conceptual model that defines the main
decision-making directors when modifying their offers to fit their new clients.

On product and place, the company offers multiple kinds of business and residential
accommodation including building extensions while also providing services in the medical and
transport sectors (MarketLine 2018).

Taisei has a strong reputation in Japan for its disaster resistant housing brand called PALCON,
notable to mention that they built the first electrical streetlight, the first real western style hotel
The Imperial Hotel amongst others in Japan. Externally, they were also involved in the
expansion of the Palms Island Dubai’s under tunnel and Bridges like the Mega bridge in
Thailand, new Doha International Airport in Qatar (www.taisei.com), with such robust market
value and experience it shouldn’t be a surprise that they do have their Technology on top notch.

On promotion and pricing, the company generates a lot of contents for advertising on their
YouTube platforms, industry websites, classic television commercials, billboard and by
supporting environmental projects but obviously their unique structures do speak for themselves.
Prices are depending on the nature of work, place and involvement.
Section 2
1.2 Macro-Analysis

PESTLE analysis is a method used to analyse a foreign market’s macro-environment, an

acronym for political, environmental, social, technology, economic and legal factors (Burt et al,
2006)

Political: The UK government has registered stability over a long period of time, according the
Guardian (2018) amid all the political dingdong the UK economy started 2018 as strong as ever.

Economic: The UK economy’s growth rate is on a rise, however uncertainty over the outcome of
BREXIT has deterred both business and industrial investments input in the economy to an
extent, however in construction this shifted the attention of builders and house owners away
from investing mostly in the capital London to other areas massively creating even more
opportunities (UK construction 2017). Here goes the recent attraction of the UK market to Taisei
corp. They are just uncertainties anyways and this has never held any business looking to expand
back.

Social: An average UK resident has a very reasonable standard of living and social welfare
covered, one of the best in the world. One major issue is the continuous growth of housing and
household debt compared to income tax (Anon 2014), a challenge that spurred from the above is
the hoarding of these newly built properties for future growth (MarketLine 2016) by home
owners however as negative as this sounds, it shades more light on the perceived value of
housing in this part of the world so much to wait for an unsure time for return on investment, the
government is tackling this with high council tax on the empty buildings.

Technology: The UK is popular for its strengths in science and technology (MarketLine 2016),
there is constant huge investment to this sector such as recorded expenditure on research and
development (R&D) increased by 1.6billion to £34.8 billion in 2017 (National statistics 2019),
however the IT section has a lot of foreign ties so the possible outcomes of Brexit is the lack of
IT skilled workers and how to sustain existing ones (McDonald 2016) (Flinders, K 2018).

Environment, The UK has a worldwide global impact on environment, they still battle air
pollution mostly in construction and noise pollution, the government however are fiercely
fighting to reduce this through policies (Shiers et al 2007).

Legal: Taisei Corporation run a very secure and transparent legal system. Investors have a never-
ending quest to invest in the UK and the UK legislation strongly favours their interest
(MarketLine 2016).
2.2 Micro-Analysis

The Micro-environment is an analysis of the internal factors which the company has full control.
This will be done using the Porters five forces analysis, it is a strategic management tool to and
understand underlying levers of profitability in a given industry.
Threats of new entrants (low): The construction industry is capital intensive and you expect
more threats from the existing big players than new companies, having said this it is important to
know that this industry would be discouraging for new entrants. The key players tend to
constantly bring innovations and ways for a lower price strategy maybe but more of new value
propositions for customers, Constant investment on research and employment of skilled labour is
advised.
Taisei can tackle this with improved construction with technology advancements like the
modular building and 3d printers, technology always gives you a competitive advantage.
Modular houses are one of the reasons why houses are cheaper relative to what a house owner
pays here in the UK and room sizes. 3D printers can be a boom for low income houses, you find
that they are less wasteful than regular manufacturing, secondly, they follow the patterned
program, save time, material, cost and labour. Gaining distribution is a challenge in this industry,
however this would be managed to a large extent if Taisei industry enters the UK market by
acquisition of a local construction firm with a functional distribution unit.
Powers of suppliers (high): Strong suppliers in the industry do have a bargaining power and
they use this to attain greater prices from companies. The prices of substitutes in this case can be
the acquisition of heavy- duty machines, technology and trained staff, this can be of high cost.
In an industry like this it isn’t a surprise that a supplier’s product is a large part of the firm’s
value added, however there are many suppliers in this area as it is a lucrative industry.
Power of Consumers (high): Every business is expected to be consumer driven. House owners
who are the target market in this concept the consumers are after a bigger space at a lower cost
and this is the very essence of Taisei corporation’s expansion into the UK however, consumers
are very demanding so promotional strategies for building a large base of customers is
paramount.
Rivalry among present competitors (high): The construction industry in the UK have
dominant firms like Kier Group plc with an operating profit of £134.4million in 2018 (IBIS
2018), ETC, With market share of 8.8%. There is also little product differentiation which is due
to the segment of construction. It is important to note that collaboration with competitors is
necessary to increase the company’s market size bearing in mind that your competition might not
always look like you!
Threat of substitute products: There are low threats of substitute products in my opinion in the
UK unlike Canada where they have bigger houses, expansion would be of little or no use.
Possible substitutes are the modular homes or a yacht maybe, an average Uk person is traditional
and a bit unwelcoming to new innovations compared to a Canadian according to HOFSTEDE
analysis.

2.3 Why UK:

The UK, part of the EU, is a bigger than Canada, though there are uncertainties surrounding the
BREXIT deal however as a single entity they have a strong and growing economy still with a
stable/healthy government environment.
With regards to the concentration on the Expansion aspect of construction, of the top 20 Of the
top 20 areas with the most expensive three-bedroom homes,17 were in London(ProQuest 2014)
bearing in mind that majority of the home owners would rather have more space than they
currently have. As a UK house owner and having visited Canada, it is known to me that most
houses in Canada are way bigger and spacious than the houses found in the UK. Based on
research, in 2016 the UK recorded a major growth as cost went from 0.4% to 0.8% in one month
alone, this creates need for Taisei corporation (AAP 2016).
Section 3
3.1 Market Entry Strategy
Marketing entry strategy is a brand’s plan for achieving marketing objectives (Lee 2015)
however to attain a maximum potential for profit and sustain the company, a good strategy
should customer driven and taken from market research that focuses on the correct service
combination.
Following a critical research, entry by acquisition is my recommendation, considering that
Knowledge of the local environment, access to the target market and an established brand with
existing work force as benefits. Acquisition is the purchase of one business enterprise by another,
according to Portal some test should be done like confirmation that entry cost wouldn’t exceed
expected profit, unique skill transfer needed for a competitive advantage in the new environment,
restructuring and so on (Katz et al. 1997). Necessary registration process and legal formalities
are paramount too.

Taisei with its financial stability and international expertise has a growing global economy to
bask on and part to play towards the growth of construction in the UK (MarketLine 2018)
nevertheless, entry market entry strategy has huddles like inconsistent of cultures and contrary
style of management amongst others (Cerulli 2010). This strategy enhances the company’s
strength and reduce time to settle, some things amongst many that should be in place are
promotion tactics like advertisement, public relation’s campaigns and exhibitions are my
recommendations.
Section 4
4.1 Recommendation & Conclusion

Construction work in the UK is categorized/segmented into different segments/series, new work

and repair/maintenance. On product, UK’s construction industry is very much diversified, there
are different segments and Taisei corporation can perfectly fit into every aspect of it. The product
concentration at this time is the Expansion referred to in the UK as major alterations of existing
homes, offices etc., which falls under the PNCW (private construction new work) (MarketLine
2016. it is advisable to expand one segment at a time considering it is a new environment as each
requires a hands-on team effort to put good results out to the customers with a repeat business
expectation. Without a good target marketing, the likelihood of a long-term success is low
(Business news 2019).

On pricing, it is important to note Price is the big P, it is the only one that affects the result and
no doubt the most important part of marketing. I recommend the use of technological advances
to deliver the services at less cost compared to the market offers, the company doesn’t
necessarily have to make less profit to achieve a low-cost service, the magic is in the promotion
sometimes. If a potential new house buyer understands that the same amount of space which
most times is the attraction in the UK, can be achieved in your present house at a cheaper cost
compared to paying for a new house, this should be the promotional strategy for this market.

In conclusion, the United Kingdom is an attraction environment and viable for Taisei to strive in
based on the Macro and micro analysis. There are many strategies that can be adopted and Taisei
as a company is stable and experienced enough to control their challenges. They do have strong
competitions but with the right strategies they would penetrate on time.

References

1 Brazier, S. (2015) 'Simon Brazier: Why the UK Economy is Back in Business'. Money
Marketing (Online Edition), 8
2 Cerulli Weighs 2010, Pros, Cons of M&A in AM'. Money Management Letter, 57
3 Flinders, K. (2018) 'Brexit with no Deal is Unthinkable for UK Technology, Lords
Committee Told'. Computer Weekly, 4-6
4 Lee Suhhyue 2015; volume 17 on The Effect of New brand’s Entry on the Price Strategy of
Incumbent Retailers. Asia marketing journal
5 Katz, J. and Simanek, A. (1997) 'Corporate Mergers and Aquisitions: One More Wave to..'.
Business Horizons 40 (1), 32
6 MarketLine Country Profile(2016): UK [online] available from
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8 McDonald, C. (2016) 'UK Technology Sector Presses Government Over Technology Skills
Gap'. Computer Weekly, 13-15
9 Shiers, D., Lavers, A., and Keeping, M. (2007) 'Indicators of the Impact of Environmental
Factors on UK Construction Law: Developments in the New Millennium'. Construction
Management & Economics 25 (7), 821-829
10 TAISEI CORPORATION. (2019). Profile | TAISEI CORPORATION. [online] Available at:
https://www.taisei.co.jp/english/profile/ [Accessed 8 Jul. 2019]. The Guardian (2018); UK
economy in 2018- steady growth tempered by Brexit politics, Economics view point
11 ProQuest(2014) 'House Prices: One London Home, Or 25 in Scotland'. Telegraph.Co.Uk;
London [online]Mar16,.available from
<https://search.proquest.com/docview/1507756674/abstract/3821EC152F314635PQ/1> [Jul
9, 2019]