MRC Rubber Company
MRC Rubber Company
Contents
TOC o “1-3” h z u HYPERLINK l “_Toc378165900” SWOT Analysis PAGEREF _Toc378165900 h 1
HYPERLINK l “_Toc378165901” Strengths PAGEREF _Toc378165901 h 1
HYPERLINK l “_Toc378165902” Weaknesses PAGEREF _Toc378165902 h 2
HYPERLINK l “_Toc378165903” Opportunities PAGEREF _Toc378165903 h 2
HYPERLINK l “_Toc378165904” Threats PAGEREF _Toc378165904 h 2
HYPERLINK l “_Toc378165905” PESTLE Analysis PAGEREF _Toc378165905 h 3
HYPERLINK l “_Toc378165906” Political Factors PAGEREF _Toc378165906 h 3
HYPERLINK l “_Toc378165907” Economic Factors PAGEREF _Toc378165907 h 3
HYPERLINK l “_Toc378165908” Social Factors PAGEREF _Toc378165908 h 4
HYPERLINK l “_Toc378165909” Technological Factors PAGEREF _Toc378165909 h 5
HYPERLINK l “_Toc378165910” Legal Factors PAGEREF _Toc378165910 h 5
HYPERLINK l “_Toc378165911” Environmental Factors PAGEREF _Toc378165911 h 6
HYPERLINK l “_Toc378165912” Strategy and Implementation Summary PAGEREF _Toc378165912 h 6
HYPERLINK l “_Toc378165913” Marketing PAGEREF _Toc378165913 h 6
HYPERLINK l “_Toc378165914” Marketing Communications PAGEREF _Toc378165914 h 7
HYPERLINK l “_Toc378165915” Sales Strategy PAGEREF _Toc378165915 h 8
HYPERLINK l “_Toc378165916” Distribution PAGEREF _Toc378165916 h 9
SWOT AnalysisMyanmar is a growing rubber industry player with expectations of production hitting over 95,000 metric tons, which reflects various operations features. With low rubber prices in the country, setting up MRC as a rubber company in the country would gain the benefits of value addition hence increased production (Khaing, 2012). In this SWOT analysis, the prevailing market attributes likely to support and affect productivity for the new production plant are highlighted.
StrengthsThe rubber industry in Burma is currently projected to enjoy an estimated annual growth of 10,000 metric tons, a reflection of 11.8 per cent. A strong production capacity is important in determination of the source of raw materials, which cuts down on the costs of operation as well as assurance of constant production around the year. Locating the business in the Mon State will facilitate production due to its massive interest in the crop. Alternatively, the position of the country as a typical developing nation leaves Burma having a readily available labor market at a low cost than in western countries, which implies that the production cost apportionable to labor is generally lower than in many other parts of the world.
Additionally, Burma has a ready market in the emerging Asian economies like china and India, with Japan also providing sufficient cushion against absorption issues. Equally, political transformation taking place in the country indicates emergence of a stable economy country ready to support business and investment than it did before.
WeaknessesComplete political reforms are not guaranteed as episodes of violence reported in the country hinder meaningful investment improvement. Political difficulties that led to trade sanctions against the country may not yet pave the way for the new order, despite support from China. Low prices for the crop means that, farmers may opt to venture in other types of production such as food crops for higher returns. Additionally, chronic poverty, poor infrastructure and lack of credit may discourage farmers to participate in meaningful production.
OpportunitiesGrowth in production in the recent years would need to be sustained by tapping on the current output to maximize production. Strong but slow recovery indications paint the country in good faith among trade partners, making international trade more promising. International community recognition of Burma’s efforts towards reconstruction presents a lucrative chance for the growth of business at the international level. The majority of the Burmese population is composed of an emerging middle class that holds promise to economic development and consumption.
ThreatsThe main threat of the industry is perhaps declining Chinese economic growth leading to reduced consumption of rubber products in its main market. However, other regional trade partners may step in place of china for instance Malaysia, Singapore, Indonesia, India and Thailand (Khaing, 2012). The threat of climate change places Burma in a risky agricultural setting, which may influence interests in food and cash crops (Boot, 2012). In addition, unstable economic performance poses a threat to production costs. Despite the relaxing of US and EU sanctions, the economy of Burma remains volatile for investor confidence (Roughneen, 2012).
PESTLE AnalysisPolitical FactorsThe country is experiencing dramatic changes in the political organization and processes, with recent democratic milestone of peaceful elections paving the way for a bright future. Increasing confidence from the international community has led to the easing of trade sanctions slapped on the country on grounds of government abuse of civilian rights. In terms of economic freedoms in the country, investors can for once in a decade and a half find assurances of a civilian regime eventually taking over from authoritarian extremists (Hoag, 2012). Despite the huge difference from a standard global business environment, Burma is making impressive steps towards public-private cooperation balance in development of the economy. Setting up MRC in the country will be based on the current trend of investment flow into the country, with some experts tipping Burma as a competitor to more seasoned business hubs in the region, including Indonesia and Thailand. Assurances of political and business cooperation for instance with the US implies that the Burmese administration will have to continually improve its involvement in development to attract such cooperation. Numerous changes in Burma civil rights have been registered in a very short time, including rise of parliament, freedom of expression and public participation (Shoemaker, 2012).
Economic Factors
As an observation by Shoemaker (2012) on Burma illustrates, the country has an impressive chance for improvement from the downtrodden economic infrastructure. Falling risk levels such as interest rates and inflation show that the country is destined for a brighter future ahead. Incentives currently advanced to investors in the country add investor confidence, which underscores the need for the MRC rubber production to set shop in Burma (DPS, 2006). International community assurances of assistance for the rebuilding of the country show the guaranteed growth setting. As an illustration, Japan wrote off a debt of 3.7 billion US dollars, enabling participation of Japanese infrastructure construction companies accessing opportunities to reconstruct the country. Telecommunication investment opportunity in the country is on an upward trend and the interest from investors in this sector shows the openness that technology flow in the country will support industrial processes. Availability of important resources for the growth of the economy such as oil and gas has attracted investment support steps towards industrialization. These and other impressive economic strides happening in Burma provide assurances of an upward trend in future growth, making it advisable for the rubber MRC project to take the opportunity while these impressive indicators prevail.
Social FactorsAs mentioned above, Myanmar’s features of a developing nation underscores the rising status into a middle level economy, with impressive population demographics supporting business in the country. An active labor market of about 18 million people with an interesting mix of skilled and semi-skilled labor markets available at relatively lower than in the regional economies create an opportunity for setting up MRC production plant. Population growth factors support the development trends in availability of market and labor in the country with current population estimates of about 57.5 million supporting annual growth rates of about 4 per cent (GPS, 2006; Myanmar, n.d.). Increase in government interest in social services such as social security, education and healthcare further support stability of the economy as an investment destination.
Technological Factors
The state of the technological advancement has not been supportive of business until the dramatic turnaround of the socioeconomic and political development began several months ago. Low automation and technological research in the economy has hampered meaningful investment in the country when compared to the other nations in the region. However, a deliberate move by the authorities to accommodate internal innovation and welcome external technology indicate an upward growth in development in the country. At the current information and communication technology rates in the global economy. Burma is poised to benefit from massive inflow of technology at a relatively lower cost than other nations achieved when the technologies were newly introduced in the market. With technology giants such as Japan, South Korea and the US having a keen interest in the country and region, Burma’s rise into technology productivity setting will not take as much time. Investment in the country in industrial projects will therefore find it easier by the day to set up operations that it was a few years back.
Legal FactorsIn terms of preparedness by the country to accommodate business interests witnessed over the last several months, Burma is actively involved in restructuring its legal framework. Several legislations have passed in the country’s parliament that is making tremendous contributions in the socioeconomic and political advancement in the country. As an illustration, the Foreign Direct Investment law was passed in September, paving way for synchronization of the country’s foreign investment policies with globalization setting (Mizzima News, 2012). Business registration bureaucracies in the country prove to hold back operations by businesses with international market interests and the indications sent by such laws sends the appropriate signals to investors since willingness to remove bottlenecks is high in parliament. Challenges to drastic changes in the business legal framework are expected, however, but an increased political participation will eventually settle out differences (Gweri, 2012).
Environmental FactorsThe integrity of the environment in Burma was severely damaged by the military regime, with virtually no legal framework taking care of environmental issues in the country. Few steps were made to control the environmental pollution activities since the British laws in force in 1962 were repealed by the junta (Gutter, 2001). The current difficulty in management of environmental mess created during the military rule could have been avoided if the appropriate legal framework was forthcoming (Rispoli and Strizzi, 2001). Since the political restructuring started in the country, several environmental consciousness enhancement laws and policies have taken place in the country. Natural location and resources that the country enjoys such as vegetation act as sinks for a significant quantity of pollutants, which shield it from extremes of climate change facing the global community (Myanmar, n.d.). Steps towards a responsible environmental regime indicate the appropriateness of the country for a rubber producing plant.
Strategy and Implementation SummaryMarketingAs an amorphous environment without definite competition strategy with regional rubber players, operations in Burma by MRC will need specialized marketing for success to be recorded. The initial step for the marketing functionality of the new rubber business will be characterization of the regional and global markets in order to approach marketing from an informed perspective. Rubber consumption is increasing in Japan, China and India, with supply competition arising from Thai and Indonesian companies. In order to penetrate through the market established by these players, the MRC project will venture in production of diversified products and concentrate on the segment with a high demand for marketing compatibility. To market tires, rubber gloves, rubber moldings and motor vehicle brake parts will require expansive marketing for each product line (Kim and Mauborgne, 2005).
Marketing of tires, brake and other rubber motor vehicle spare parts, in the growing motor vehicle markets in India, China, South America and in Africa will require physical marketing and distribution as well as online marketing. Rubber gloves marketing in all construction works in the country will require marketing functionality with the authorities to facilitate consumption of locally produced products. Rubber moldings will have an online marketing functionality due to the diversified market locally and on the international market. The opportunity of the social media as an emerging marketing platform will be exploited to access regional and international markets using an aggressive marketing campaign. Other online marketing options such as use of mailing lists will also form part of the marketing strategy to consider. A marketing outsourcing concept with rubber market experts such as HJ Ventures will be weighed to cut down on costs of marketing (HJ Ventures, 2012). Such a joint venture may facilitate in studying the market and providing marketing and production diversification insights.
Marketing CommunicationsBurma as an emerging market in next several months in the rubber industry will require MRC’s efficiency in relaying of products information for maximum productivity. In order to facilitate an effective marketing functionality, the 4Ps model will be employed in the MRC marketing strategy (NGFL, n.d.). Communication trends in the market imply that the relaying of marketing information will be internet intensive, by use of electronic messages on television, mobile applications, SMS, blogs and microblogs backed by the social media. Search engine optimization in the marketing communication strategy will be enhanced to ensure that the MRC products find the right market entry. An efficient data collection and monitoring of responses in order to inform marketing decisions will be a central theme in the communication strategy adopted. The integrated system will require harmonization of all relayed messages as well as reconciling it with the customer responses, which can be direct or indirect.
Integration of the relayed messages as well as customer cues in informing marketing and production patterns will be geared towards accuracy and efficiency in the operations of MRC, considering that the market has bigger players offering competition in the market. Marketing communication with respect to different rubber product will facilitate marketing segmentation of the respective performance with an aim of reducing mismatch in operations. MRC will give marketing the attention that it deserves by making sufficient investment in electronic and other marketing media. An efficient system will monitor advertising, sales promotion, public relations, direct marketing, personal selling and social media blogging (MSG, 2012a).
Sales Strategy
MRC will formulate a sales strategy that defines the market in accurate estimations, taking five considerations. Firstly, target markets for the different products identified in the products portfolio will be identified to complement marketing outlook. Newer markets will also form part of the deliberations since the Blue Ocean strategy also encourages creative sales packaging (Kim and Mauborgne, 2005). Secondly, the most readily available and best outreach that the MRC will afford to create sales outcomes will be specified and enriched. In addition, sales operations will require a very professional team with solutions to queries raised by the customers to facilitate establishment of customer loyalty and confidence. Alternatively, orders and inquiries will be effected immediately to avoid losing acquired ground. This implies that the sales and delivery teams will need to perform highly coordinated operations to take care of sales achieved. Finally, constant reviews and monitoring of the sales experience will be facilitated to ensure that the correct results are maintained throughout the sales processes (MSG, 2012b).
In terms of the appropriate review procedures, sales targets set and results achieved will keenly be followed to ensure growth in operations. Management of the details of sales experience will formulate important strategic approach by MRC, including initial cue decoding, creation of contact, information exchange and follow-ups, need identification, scheduled meetings, prospecting for sales, negotiations, sealing deals as well as after sales follow-up (Helbig, 2011). These details will ensure that the initial sales establishment support long-term objectives of the MRC.
DistributionAs mentioned above, the sales and marketing functionalities of the MRC will need close coordination with the delivery system in order to ensure that revenue from orders is not lost. Across the expansive regional and global market space, MRC will have definite supply system that corresponds with current capacity of logistics and network of supply and demand. In order for the company to convert demand into supply outcomes needed for growth, wholesale and retail considerations will be considered (Gaebler Ventures, 2012). Due to the new entry status in Burma, it may not be immediately possible for the company to make an efficient presence on its own.
Wholesale and retail functionalities may be possible at the plant outlet to be constructed and implemented immediately. Supply across country and across the region as well as the global market will require partnerships and joint ventures as mentioned above. Various joint venture opportunities will be effected immediately, supported by agreements on delivery. International orders will be coordinated through shipping companies such as DHL. Online ordering and shopping portal will be integrated with the joint venture with shipping partner of choice. The initial supply targets will first cover the local and regional markets before the larger global market.
References
Boot, W. (2012). “Environmental Crises Threaten Burma’s Economy.” Retrieved from http://www.irrawaddy.org/archives/12024
DPS. (2006). “Guide to Invest in Myanmar.” Retrieved from http://www.myanmar.ca/business/request_form.htm
Gaebler Ventures. (2012). “Selling a Rubber Products Wholesale and Manufacturers Business.” Retrieved from http://www.gaebler.com/Selling-a-Rubber-Products-Wholesale-and-Manufacturers-Business-7660.htm
Gutter, P. (2001). “Environment and Law in Burma.” Legal Issues on Burma Journal, 9:1-28
Gweri, R. (2012). “Myanmar: Planned Foreign Investment Law Delayed by Local Business Opposition.” Retrieved from http://blogs.ft.com/beyond-brics/2012/08/28/myanmar-planned-foreign-investment-law-delayed-by-local-business-opposition/#axzz2AkdfuWpL
Helbig, D. (2011). “5 Keys to Successful Sales Strategies.” Retrieved from http://smallbiztrends.com/2011/11/5-keys-successful-sales-strategies.html
HJ Ventures (2012). “Starting a Rubber Product Manufacturing Business.” Retrieved from http://www.hjventures.com/writing/Rubber-Business-Plan.html
Hoag, F. (2012). “Responsible Investment in Burma (Myanmar): An Experiment that Cannot Afford to Fail.” Retrieved from http://www.jdsupra.com/legalnews/responsible-investment-in-burma-myanmar-53891/
Khaing, A. K. (2012). “Burma’s Rubber Prices Low.” Retrieved from http://www.mizzima.com/business/7664-burmas-rubber-prices-low.html
Kim, W. C. & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant, Boston, MA: Harvard Business School Publishing
Mizzima News. (2012). “Burma’s Foreign Investment Law Approved by Parliament.” Retrieved from http://www.mizzima.com/business/7967-burmas-foreign-investment-law-approved-by-parliament.html
MSG (2012a). “Integrated Marketing Communications.” Retrieved from http://www.managementstudyguide.com/integrated-marketing-communications.htm
MSG (2012b). “Sales Management- An Overview.” Retrieved from http://www.managementstudyguide.com/sales-management.htm
Myanmar (n.d.) “Climate Change Management in Myanmar.” Retrieved from http://www.gwpsea.org/index.php?option=com_docman&task=doc_download&gid=54&Itemid=135
NGFL, (n.d.) “The 4Ps of Marketing- The Marketing Mix.” Retrieved from http://www.ngfl-cymru.org.uk/vtc/ngfl/bus_studies/gcse_m_smidman/unit3/4ps.htm
Rispoli, L. & Strizzi, N. (2001). “Asia’s Foreign Debt: an Evaluation and Strategic Overview.” Ivey Journal on Global Business, (May/June 2001)
Roughneen, S. (2012). “”Commodity Prices, Cronyism Threaten Burma’s Economy.” Retrieved from http://www.irrawaddy.org/archives/3928
Shoemaker, R. (2012). “”Burma: Open for Business?” Retrieved from http://thediplomat.com/2012/07/26/burma-open-for-buisness/
Leave a Reply
Want to join the discussion?Feel free to contribute!