Monday, August 26, 2019

Memo to Paul Taylor - AM Equipment Term Paper Example | Topics and Well Written Essays - 1750 words

Memo to Paul Taylor - AM Equipment - Term Paper Example One of the major steps that AM should take is to prepare going global. This entails establishing of various managerial positions that will be responsible for overseeing effective distribution of the products in the new markets. In its efforts to enter the three foreign markets, AM should establish an export sales department. Based on the fact that the company is currently based in US, the export sales department will ensure linkage between the production facilities is US and the sales outlets in the three countries. Additionally, AM should employ skilled marketing managers who will be responsible for overseeing the company subsidiaries located in the foreign countries. One of the advantages of the export sales department and the hiring of experienced marketing managers is that new policies such as effective pricing, extensive promotion and creating strong customer awareness will be created. For instance, the company will emulate penetrative pricing policy (Joshi 47). Through this pol icy, AM will enter the new markets using low prices without compromising the quality of its products. This will ensure that it acquires large customer base. However, the company will need more financial resources to cater for the marketing managers wages. ... After preparing to go global, AM should find the right market that will provide ready market for its products and skilled human resources. One of the key factors to consider is the population of the foreign countries. Additionally, the company should take into consideration the competition, political stability and regulatory environment among other factors. Being one of the developing economies with large population, South Africa is a viable country that AM should enter. In the same way, Britain and Australia have strong economies and high customer’s purchasing power thus proving a market opportunity that will enhance the sales and the profitability of the company. It is also vital to note that in order to encourage investments, South Africa, Britain and Australia have flexible regulatory environment that is essential for foreign direct investments. For example, South Africa has entered into double taxation agreement with US. As a result, AM will not face a lot of taxation cha llenges that may hinder its operations in the country. Additionally, South Africa taxation for foreign companies stands at 35% which is not so high. One of the major aspect that make the three countries viable markets that AM should consider is that they experience political stability that is essential for foreign and local investments. Even though AM Equipment Incorporation will be exposed to stiff competition from the well established firm in the three countries, the company will undertake extensive advertisement and promotion thus effectively putting at bay its competitors. Based on the political and technological development in the three countries, AM will benefit from adequate availability of classical factors of production that includes labor, capital, land and

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