CASE B-6: AMWAY INDIA
Assignment Presented to
Dr. G. N. Braithwaite-Sturgeon as per the requirements of
International Marketing ADM4328 M
University of Ottawa
January 22nd 2013
BUSINESS CONTEXT & INITIAL SITUATION
Amway, a North American Multinational, subsidiary of Alticor Inc. has over the years become one of the leaders in the 90 billion dollar direct selling industry through its use of multi-level marketing and creation of networks of independent business owners and sales. Founded in 1959 by Jay Van Andel and Richard DeVos, the company grew and captivated interest on an international level, especially in developing countries due to its ability to
…show more content…
- Competitors such as other multinationals or corporations (Ex: Avon and Mary Kay) create threats for market share.
OPTIONS
Option #1: Planned Exit of the Indian Market & Exploration of Other Potential Markets.
Main Pros:
- If Amway were to implement a planned exit of the Indian market, it could sell off its current existing products while they still were able to execute business within the market and not experience any unexpected losses.
- Amway Corporation would not have to spend additional time, effort and money in legal litigations and negotiations.
- The corporation’s time could be focused on exploring other potential markets within neighbouring countries with fewer legal restrictions on the distribution of their products.
- If neighbouring countries are tapped, the existing investment in India’s manufacturing plants and machinery can still be used for fabrication of products for neighbouring countries.
Main Cons:
- Neighbouring countries could present little to no interest in adopting business practices from Amway Corporation, or could present little to no profit for the company due to the varying national economic situations.
- Loss of the 36 million dollar investment (including the 17 million state-of-the-art manufacturing facilities invested in India.
- Extremely large loss on potential profits in that particular
Company has no local competition and the company has an opportunity to establish itself as the market leader nicher for the product that is offering.
competition, both in attributes and in products. In order to supply an attribute that no
* The company would drop present dealers in their markets and not add new dealers.
Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.
As a brand-marketing manager for AMS, I have to deal with brand’s marketing communication plans, advertorial, sales promotion and market exploration. International business negotiation is also a part of my responsibility.
The threat of new entrants is measured by the level of entry barriers, brand reputation and customer loyalty, potential for existing competitors to expand, growth of buyer demand,
The biotech firm Amgen Inc. gives much attention and time to the planning process. Because the outcomes for a company like Amgen are often very unsure and many employees are quite sceptical about the use of such a planning, the main issue can be described as follows:
Discussion question 2: What has made Cardinal Health the biggest player in the US health care industry in general and the undisputed profitability leader in the drug distribution business in general?
Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:
Another alternative should be to create a plant in Europe so now they don’t have top ay all the taxes they have to pay so they can export their products, in that way they will be able to give better prices to their clients, and they will supposed to have a better service and more quality because they where the pioneers in those products.
High rivalry from family owned businesses, full line dairies, and large international companies. High threat due to loss of patent; product can be copied by competition and former employees
Avon is so much more dependent on its foreign operations than on its home operations for many reasons. First, Avon realized that the level of competitiveness in the United States market has grown vastly. Furthermore, there is almost no "remaining untapped market for cosmetics, fragrances, toiletries. To grow rapidly in the
If an industry is profitable, it will become a magnet to attract more competitors looking to do same business with us. If it is easy for these new entrants to enter the market, this poses a threat to the firms already competing in that market. Threat of new entrants is one of the forces that shape the competitive structure of an industry (Marc, 2014). A high threat of entry means new competitors are attracted by the profits of the industry and can enter the industry easily. New competitors entering the marketplace can make the market share and profitability of existing competitors more threaten cause the existing competitor to make some changes to existing product quality or price levels. A high threat of new entrance can make an industry more competitive and decrease profit potential for existing competitors whereas a low high threat of new entrance can make an industry less competitive and increases profit potential for the existing
Other environmental influences, such as competition, may fuel the company’s desire to create more and better products that could well determine their location and standing in the global market. Increase in the number of competitors for the same line of products may mean that there
* Environmental factors also include local and global competitors. With the advent of globalization. There has been a substantiate increase in these competitors