NEC produces a range of electronic devices and parts. The company has a small pl
ID: 1216091 • Letter: N
Question
NEC produces a range of electronic devices and parts. The company has a small plant in Adelaide. South Australia, reporting to its head office in Osaka, Japan. The Adelaide factory produces electronic switches for cars. As a marketing consultant, you have been asked to assist management in assessing the potential for the firm to export products to the Middle East from its Adelaide plant. Specifically, you are required to assess the potential export opportunity based on (a) the market conditions in the Middle East, (b) the potential to manufacture products there, (c) the risks (including financial) that this approach carries and possibility of using trade permits to export products given the trade barriers that currently exist. Sample response: Background to the meaning of competition Background to export marketing goals Re-state the problem Describe what NEC has to do Economic Political Social Competitive What is meant by outsourcing? Why would NEC outsource? What are the risks? What are the benefits? Why is it risky? What are the risks? How can we moderate the risks? Should we go to the Middle East? Why/not? How do trade restrictions affect NEC? What should the company do and why? What are the recommendations to management?Explanation / Answer
The competition in specific items like car switches is quite large, Many OEM companies do make great products and they try everything to get their market share.
The market in middle east is qutie complex, Middle east cannot be easily understood because there are countries where the market is free and accessible to all traders and there are markets like yemen and iraq which are quite distressed, Further it is not an easy market to go in and trade goods you always need connections with big traders there to market any product there.
Middle east potential to manufacture or start a company are very grim, Though it would be a great idea to have a manufacturing facility in Saudi arabia or Dubai, Today Emirates is considered as middle to trading world and it would be wonderful to have presence in the region. Some rich markets in middle east almost always help any foreign company and by the way there is no tax in middle east which puts a cherry on top of great ice cream.
There are no trade restrictions in middle east, Market can be ranked as free as Dubai is already trying to be one of the global financial center,
The real problems are the cost problems, Resources like fresh water can be expensive in Dubai as there is no natural source of water there, Electricity is still cheap, Taxes are non-existant, Great banking system etc. All these things are great for business. but the market is volume is very limited as most of the stuff in the middle east plainly gets imported.
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