FMA601 Foreign Market Analysis

Question 1

The growth of the global economy implies a relatively enlightened trade policy with overseas. Various factors have been contributed to the recent process of globalization. One of the most important factors which are attributed to globalization are-

Protectionism Policies

Various policies have been implemented to control global trade in an economy. Those imposed policies are nothing but popular as the protectionism policies in a country. Once the level of protectionism declines in international business, the process of globalization becomes faster (Milner, 2021) 

Economics Of Scale

Globalization is associated with the concept of economics of scale. A country could enjoy a comparative advantage or the economics of scale for one or few commodities and the country would like to focus only on those commodities of production (Triebs, et al., 2016). To enjoy the facilities like the economics of scale, globalization spreads rapidly.

Question 2

Tata Consultancy Services Limited (TCS), UAE is the most popular and reputed software firm in the United Arab Emirates. In the following section of this paper, the PESTAL analysis of this software firm is conducted.

Political Factors

Various political factors have been affected the performance of the selected software firm, TCS. To the analysis of those factors, the domestic political states of the company are most important. The organization has been belonging from India where it has a great market share in the domestic country. The organization is mainly focused on the North American and European Union markets which have been largely affected by the decision of Brexit (Clarke, et al., 2017). This company has recently been facing a selling pressure of their shares continuously due to the pressure of Brexit from Britain which is a major client of TCS.

Economic Factors

The revenue growth of this organization is very high, recently it crossed the range of 20 billion $ revenue which is equivalent to 20 times of the last 16 years.

Social Factors

Various social factors such as work and personal life balance, perfect financial stability, etc. increase the reputation of the organization whereas the hierarchy in the organization has been criticized as well.

Technological Factors

This organization is already popular for its enlightened technology and continuous technological supports and innovation which broaden its customer base and efficiency.

Legal Factors

The organization, TCS has been needed to compensate up to $420 million for the fraudulent case against CSC’s insurance source code which adversely affects the performance of the company (Guez, 2021).

Environmental Factors

Different environmental factors affected the performance of an organization. For TCS, the environmental strategies like financial inclusion network through banking revolution, micro-loans facilities, remittances, etc. make the business activities more concrete.

Question 3

Demographic Factors To The Uae Clothing Market Segmentation

Demographic segmentation is based on mainly the concept of population and its related concepts such as income, age distribution, gender, occupation, and education. The population growth rate in the UAE has been increased in recent years which ensures a greater market segmentation for the UAE clothing market.

The profitable targeted segment is based on the UAE's young population percentage to expand the clothing business widely.

Question 4

According to Michael Porter's five fosters theory which shapes the competition of an industry in the following such as competitive rivalry, the customer's bargaining power, the supplier's bargaining power, the threat of new entrants, and threats of substitutes.

The Threat Of New Entrants

With higher chances or possibilities of new entrants have been declined the market share of the existing firms thus competition rises.

Threats Of Substitutes

If there is a greater number of substitutes within the market, market elasticity will be higher and that reduces the market concentration of the individual firms.

Question 5 

Four Generics Strategies

Cost Leadership Strategy

Through this strategy, the business expansion occurs through cost minimization of the business.

Differentiation Strategy

In this strategy, a firm or organization tries to enhance profit by introducing differentiated products from its competitors.

Cost Focus Strategy

This strategy is nothing but the evolution of the Cost leadership strategy.

Differentiation Focus Strategy

This strategy is nothing but the evolution of the Differentiation Strategy.

References

Clarke, H., Goodwin, M., Goodwin, M. & Whiteley, P., 2017. Brexit. s.l.:Cambridge University Press.

Guez, O., 2021. Corporate social responsibility: a hybrid concept restraining legislation. s.l.:s.n.

Milner, H., 2021. Resisting protectionism: Global industries and the politics of international trade. s.l.:Princeton University Press.

Triebs, T., Saal, D., Arocena, P. & Kumbhakar, S., 2016. Estimating economies of scale and scope with flexible technology. Journal of Productivity Analysis, 45(2), pp. 173 - 186.

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