Custom «International Marketing SWOT Analysis» Sample Essay
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According to the New Dawn’s Light’s expansion plan, the company aims to provide solar panels to Ethiopia. A SWOT analysis will help assess the viability and profitability of this endeavor (Marino).
New Dawn’s Light (NDL) is a global company with established manufacturing, marketing, and distribution channels in China. Its top managers are experienced and have the administrative skills required to oversee the development of a branch office in Ethiopia. Entering the Ethiopian market to promote and sell the company’s products requires the expertise that the company has already developed in its years of existence in the Chinese market.
The company’s broad capital base will enable it to build a factory in Ethiopia. As a result, it will not have to import solar panels from China. In doing this, NDL will be following the Ethiopian government’s regulations that restrict the number of imported goods in order to enhance the investment sector. The company’s marketing department has experience in penetrating the populous Chinese market. This experience will be useful when the marketing department will develop a marketing strategy for the Ethiopian market.
The company’s top management in the administration, production, and marketing departments lack any cultural and personal linguistic experience of conducting business in Ethiopia. Therefore, the company representatives appointed to head the Ethiopian branch office will have to research the local culture, traditions, and customs, and find solutions for dealing with the communication gap. Failure to do this will mean that the appointees will not be able run business effectively.
The Ethiopian government has demonstrated its positive attitude to global companies by offering support to foreign investors. It tends to enforce lean regulations and arrangements to attract foreign investments by promoting a free economy. Ethiopia has a score of 51.5 on the Index of Economic Freedom, which is a good indicator of the favorable conditions of Ethiopia’s free market economy. The developing free market economy has been attracting significant investments. Consequently, there is an increasing need for alternative sources of energy to sustain investments and economic growth. NDL will take the advantage of this government’s support and the rising need for alternative sources of energy to enter the Ethiopian market (The Heritage Foundation).
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Ethiopia’s solar market is still at an early development stage, with an estimated installed capacity of 5 MW. The off-grid areas, which constitute 80% of the country’s territory, will be the main target market for NDL. The production cost of solar panels has decreased by 80% since 2008, which will encourage most of the low-income Ethiopians to depend more on solar energy. Low production costs and a large Ethiopian population will provide the company with opportunities to generate high profits (UNDP).
30% of the Ethiopian population are poor, which means that the market has a relatively weak purchasing power ship (World Bank Group). While the NDL marketing team can draw an effective marketing strategy, the final purchasing decision depends on the local Ethiopian citizens.
The country is not yet a member of the World Trade Organization (U.S. State Department of State). Therefore, it restricts NDL’s channels of settling disputes to local rules and regulations under the Ethiopian Ministry of Trade. Additionally, it will be a limiting factor to the flexibility of NDL’s production and marketing strategies. The lack of a constitutional right for investors to own land means that while NDL plans to build a factory in Ethiopia, the company’s only choice will be to rent land.
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NDL’s SWOT analysis shows that the Ethiopian market is ready for the company’s solar power products. While there are obvious threats to the investment, the opportunities offered by the Ethiopian market combined with NDL’s internal company strengths prove that this will be a viable investment.
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