All the four chapters above have the purpose of discussing very important issues which every company, no matter its size, have to face and make the right decision. The first part of Chapter 1 presents generic theories mainly concerning major strategic issues - model of environmental analysis and courses of development for a company with regard to its markets and competitors. The rest of Chapter 1 reviews the theoretical base which can serve as an advice to Solid 55 on what decisions to make when considering important issues like foreign country-market analysis, market entry methods, success factors in export activities, etc.
Chapter 2 has the purpose of relating the actions of Solid 55 from the near past to the theoretical terms in Chapter 1 thus making it possible to observe the strategic routes the company has chosen to follow. This could give a sound base for making new strategic decisions in the present with results in the future. One conclusion that could be made from Chapter 2 is that Solid 55 has enough intangible resources to start planning internationalization and even realize some actual foreign sales. However, the tangible resource which are needed for the company to become a proactive and highly involved international player are still missing.
There isn't anything worse than the failure to fulfill an order coming from abroad for a company which is still inexperienced in the process of exporting. But higher capacity means bigger premises, more land and big investments. Solid 55's management decided to take the risk of financing a big project through a loan. The project that would double the production capacity includes the purchase of the land where the new premises will be build. This will give another competitive advantage to Solid 55 over its competitors - according to an unofficial source only one of the firm's rivals own the land on which to perform its activities.
No company's future development can be planned through only looking into its own past. Instead, companies should turn to the territories of their action fields that are barely or not at all discovered and be the first among other industry participants to explore them. It is very probable that they will become the ones who will set new standards and new rules for the rest to follow. Holding this in mind the managers of Solid 55 have been working on an unique product which is already on the market and is starting to give the competitors new and stronger "headaches". This a luxury security door with a locking mechanism controlled either by a magnetic card or a mobile phone (ALTD). It is now perceived by many customers as excessive and unreliable but it in fact is going to replace the traditional locking mechanisms simply because of using long digital codes unbreakable by "old fashionable" burglars. The uniqueness of the ALTD makes it an item that is suitable for foreign markets.
That is why Chapter 3 initiates an international marketing analysis for Sweden as a potential market for the ALTD. The main limitation of this analysis is the use of secondary data only which does not give picture of the competitive environment in the potential host country. However, it gives answers to some questions and in my opinion it might be a base for further primary research actions. The end of this chapter makes the assumption that Sweden is a potential market for the ALTD and because of Solid 55's short experience in international marketing, exporting and limited financial capabilities primary research could be performed in parallel to the first steps towards market penetration.
Chapter 4 has the purpose of presenting some main concepts concerning the possible ways through which SMEs might enter foreign markets. The discussion is related to the final part of Chapter 1 by clarifying the advantages and disadvantages of the methods which in my opinion are suitable for a company like Solid 55. The profile of the company as an exporter is related to the motivations and the capabilities it possesses. I have prepared a comparison table on the basis of all the factors mentioned above. It has the purpose of classifying the different methods into "feasible" and "not feasible".
The result showed that piggybacking and home-based own sales force are the ones that are both feasible and preferable. The main reasons for that was their relatively high levels of control (level of control in piggybacking is low but is higher than EMCs and trading houses) and high level of involvement in the process of internationalization. Another advantage of these methods in my opinion is that they could be performed simultaneously and independently of each other. Of course, there are disadvantages for both methods - for piggybacking this is usually the substantial bargaining power the "carrying" companies posses.
For the home-based own sales force the main disadvantage are the high traveling costs and long training times if Solid 55 decides to hire inexperienced personnel. Both methods have one and the same disadvantage which is related more to the nature of the ALTD. It requires high levels of servicing at the installing stage and also at thr after sales stage because of the specific technical components integrated in it. A possible solution to this problem is the preparation of an exhaustive user's manual or outsourcing the installation and after sales servicing to a local company. Of course, not all threats could be detected before starting to implement a certain strategy and that is why Solid 55 should be flexible and be ready to counteract to unpredicted events.
JOHNSON, G., SCHOLES K. (2002) Exploring Corporate Strategy - Text and Cases, 6th Edition, Financial Times Prentice Hall.
LYNCH, R., (2000) Corporate Strategy, 2nd edition, Pearson Education Limited, Essex
JAIN, S., (1990) International Marketing Management, 3rd edition, PWS KENT Publishing Company, USA.
MUHLBACHER, H., DAHRINGER L., LEIHS, H., (1999) International Marketing - A Global perspective, 2nd edition, Thomson Business Press, London.