Tencarva Machinery Company International Business Plan

It is also advised that the firm should enter the Venezuelan market because the country’s policies are appropriate and would greatly support the growth of a business. Introduction This report presents an international business plan for Tencarva Machinery Company’s entry into the Venezuelan market for pump equipment. The paper will present analyze Venezuela and illustrate how it is suitable as a foreign market for Tencarva Machinery Company. It will also reveal the traits of potential customers in the Venezuelan market. This way, it will demonstrate the level at which Venezuelans utilize social media and web networks when making purchasing decisions. Regarding operations, Venezuela will facilitate various activities for the firm and ensure that inputs are converted into the finished products.

Short-list and Profile Potential Partner Company Candidates • Waters Corporation: Waters Corporation has been in operation for manufacturing analytical pump-related instruments. The instruments are applied in increasing productivity and earning laboratory-based firms a greater return on investments in terms of research and development (Environmental XPRT, n. d. • Shimadzu Scientific Instruments (SSI): manufactures environmental monitoring equipment and analytical instruments. The primary benefit is that of credibility. Since ABB is well established in Venezuela, the collaboration will be the appeal to many individuals in the country (Environmental XPRT, n. d. Further, the alliance will expand the organization’s economy of scale in that funding requirements will be shared appropriately. The partnership will increase the company’s profits because it is expected that the new market in Venezuela will result in an increased market share and profit margin.

The selected entry mode would be a strategic alliance. It increases economies of scale, reduces the risk for the firm, and facilitates industry convergence. Strategic alliance fits Tencarva Machinery Company’s goals and objectives because it would enhance technology exchange which would be significant in producing state-of-the-art pumping equipment. There are various tangible and intangible benefits associated with the use of a strategic alliance for Tencarva when operating in Venezuela. Engaging in a strategic alliance will have organizational benefits to the organization. The strategic alliance would also work effectively by negotiating a deal which incorporates risk and benefit evaluation. The alliance would also be made to work by embracing a flexible mutual commitment (Albers et al. This form of commitment should be measured and shared with the other partner’s culture.

Notably, rules and regulations governing the firm in the United States vary significantly from the ones formulated in Venezuela. Hence, Tencarva Machinery Company should be considerate of the rules in the foreign country. Operational Roles and Activities of the Partner Certain operational roles and activities are required from the Tencarva Machinery Company’s partner(s) in Venezuela. The partner should accept management roles, to obtain the most suitable individuals, and allow the people to manage various tasks. Also, the partner should understand that the partner firm cannot be involved in each company decisions. This context depicts the other activity which requires that the partner should support the management and avoid engaging in activities which tend to oppose or undermine decision making of the entire firm.

The partner is also accountable for own decisions and actions (Hirst et al. The culture and geography will positively affect the company’s value-chain activities. In general, Venezuelans negotiate a lot. This means that to make sales, the sales, and marketing department have to sharpen their marketing skills (Boubakri & Saffar, 2015). Given that the foreign country is in a strategic central position, it is expected that the firm will increase its sales. Since Venezuela is viewed as an appropriate market for Tencarva Machinery Company, the culture will enable the firm to develop a global corporate mindset. It offers process solutions and products for pressure, temperature, and flow technologies (Environmental XPRT, n. d. The actual and potential size of the market The pump equipment market in Venezuela is a growing market (Environmental XPRT, n.

d. However, due to the nature of various companies, there is stiff competition. The organization needs to carry out a product portfolio management (Chandra, 2017). Learning about the company’s market position will set its optimal product mix which includes multiple product categories and market segments. Market and segment profitability To enhance the financial performance of the company, it will target numerous customer segments such as municipal agencies operating in the water and waste industry, chemical industries, pharmaceutical factories, and biotechnological factories (Chandra, 2017). Providing a broad range of products to these customer segments is likely to increase the company’s sales, thereby increasing its profits. The buyers of Tencarva Machinery Company’s products will be chemical industries, pharmaceutical factories, biotechnological factories, and municipal agencies.

The rationale for selecting the multi-channel distribution system is that in the long-term, it ensures tremendous increase of the sales (Armstrong et al. In addition, it will facilitate growth of a customer the base based on the alternative purchasing choices. Despite the potential benefits of the multi-channel distribution system, it should be handled appropriately. Poor management might undermine the operations of the channel and hinder achievement of the company’s short-term and long-terms goals and objectives. Characteristics of the Organization’s Potential Customers in the Country Marketing mix in the country Marketing mix refers to factors which can be controlled by a firm to influence consumers to buy its products. The decisions made in the product mix involve the features of the product, warranties, packaging, installation, and returns of the product to the customer.

Promotional practices In the Venezuelan market, the companies attach a lot of value to promotional practices. In this case, Tencarva Machinery Company will undertake various promotional practices. For instance, the organization can embrace advertising. People in Venezuela the prefer advertising. This means that pump equipment manufacturers price their products at very high costs. The other pricing strategy used by the firms is pricing for market penetration. This approach aims at attracting buyers by providing lower prices on the products. In addition, economy pricing is a common pricing approach for many firms in Venezuela (Armstrong et al. This involves minimizing the costs associated with production and marketing with the aim of keeping the product prices low. This form of branding strategy reduces the risk of brand failure, because the individuals that might resist the brand in the traditional branding strategy are the ones who take part in the branding process.

Assessing the use of Social Media and Web Marketing for e-marketing In the final step of developing your marketing strategy, you will assess your organization's use of web networks and social media for e-marketing, given the unique ways in which computers, smartphones, the Internet, and social media are used among the country's consumers. As you undertake this assessment, read more about management, strategies, tools, and practices in e-marketing. To complete this step, address the following components: In Venezuela, consumers have a high tendency to use social media and web forums to obtain information about certain products. Precisely, companies as who require pump equipment use the Internet to obtain details about the state-of-the-art pump equipment. d. This means that the company will communicate to a huge number of consumers through social media and web networks.

As compared to offline advertisement forums, the web networks and social media will enable the firm to reach its customers more efficiently and less expensively. The e-marketing approach will enable the clients to access the firm’s website quickly. Customers will also obtain feedback through the social media platforms rather than physically visiting the company premises (Wrenn & Manfield, 2014). The aspect of embracing social media e-marketing by emailing the clients on a regular basis with personalized offers assists in maintaining positive relationships. Year Market Share Estimates Projected Revenues Expected Revenue Growth Expected Inflation rate Revenues after adjusting for Inflation 1 13% $190,000 • 8% $205,200 2 14. 8% $392,768 During the first year in Venezuela, the market share for Tencarva Machinery is expected to be 13%. Afterwards, the market share is expected to grow to 14.

7%, and 23. The reason is to ensure that there exist natural and understandable orientations in different categories of the financial statement closing of all users of the available accounting data. The regulations put forth by the Treasury Department necessitate that the financial statements may incorporate cash flow statements or statements in changes of equity. The Treasury Department in Venezuela further describes various items which should be reported separately, and which can be combined (Francis et al. It also defines the way of expressing the reduction in value of active organization’s items and the liability to be indicated for a particular financial period. Potential Challenges on Accounting Standards Even though Venezuela has in the recent years adopted the International Financial Reporting Standards (IFRS) and eliminated the application of GAAP, Tencarva Machinery Company will encounter various challenges.

For instance, the firm can seek high interest-bearing assets (Buck, 2017). This will assist in compensating for the depreciating Venezuelan local currency. It would also consider minimizing the assets held in Venezuela. It is also required to find out the regulatory restrictions which are involved when buying foreign currency dominated assets. Required Investment and Projected Cash Flows Tencarva Machinery Company will incur various costs when relocating the firm’s value-chain activities to Venezuela. Planning regarding business will enable the firm to integrate its business plans with its financial projections (Parmenter, 2015). The firm will outline its internal business process objectives and incorporate capacity maximization, quality utilization, and process improvement measures. The customer perspective will be considered by placing the customers at the forefront of the organization’s activities.

In this way, the firm will ensure that it attends adequately to the concerns and inquiries put forth by the clients. The company will utilize the key performance indicators (KPIs) to enhance customer satisfaction, brand awareness, market share, and service rates. The performance of the suppliers needs to be controlled. The suppliers will be monitored to ensure that they provide quality items promptly and without breaching the supplier-company agreement (Maier et al. The suppliers can also be controlled by evaluating their transparency in how they present their contact information and their previous involvement in labor lawsuits and related court charges in Venezuela The distributors and partners can be monitored through an integrated management system (IMS). The IMS will incorporate all the company’s processes and systems in a single framework and enable it to perform as a single unit with unified goals.

The IMS facilitates monitoring and reporting of issues with various parties as it follows established procedures, processes, and regulations for the organization’s planning and implementation (Maier et al. Tencarva Machinery Company enhances supplier relationships by obtaining their support and understanding when entering into procurement contracts. Tai and Chuang (2014) state that the CSR policies on local society interests aim at conserving the environment and supporting the education of people who come from families with low-income. The CSR policies are also formulated to promote adherence to the community’s existing laws, social norms, and cultural values. CSR Recommendations Specific recommendations would be made to the firm’s CSR policies. Based on the aspect that the Venezuela’s societies embrace diversity, the firm’s policies should be changed to embrace diversity.

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