Assessment 2: Feasibility Study – Major Project (team)

You are employed by SunGrabber Pty. Ltd., an Australian alternative energy company based in south-east Queensland.  SunGrabber is a medium-sized organisation which engages in R&D and manufacturing .  You are employed in a research role specialising in the strategic planning and strategic marketing development.

Although the opportunities for the company look good domestically (given the enormous discussion over Australia’s current high level of carbon emissions and the pending introduction of an Emissions Trading Scheme), management have been discussing the possibilities of developing new markets overseas, in particular in South America, for the past six months.

You have just come from a meeting with senior management.  During the meeting, you have been advised that the company has decided to commission a feasibility study research project to examine the potential business opportunities available to SunGrabber in South America.  .  No country should be ignored during the initial research phase of the project, however the focus is to consider the best medium to long-term business proposition for SunGrabber.  One of the many questions that the feasibility study report will need to address is whether to export from Australia, or alternatively establish a manufacturing operation somewhere in South America.

Your team is to undertake preliminary market research to identify two particular countries and prepare a report to management that addresses the following requirements:

Your first step is to undertake a “Country Scan”.  This scan should address each of the following requirements:

1. Explain the levels of economic integration within South America and it’s potential business practice implications on SunGrabber.
2. Discuss the current political, economic, legal and cultural state of the country in question.
3. Discuss the implications for your organisation in terms of:
   1. potential benefits
      1. size of target market
      2. purchasing power of consumers

• future prospects

1. first-mover advantages (if any)

1. potential costs to the organisation
   1. value systems and norms
   2. necessity for bribes

• sophistication of economy

1. regulation of business practice

1. identified risks
   1. political changes
   2. economic mismanagement

• political interference

1. lack of adequate legal safeguards
2. ethnocentrism

1. potential ethical considerations
   1. violation of human rights
   2. product safety

• worker safety

Your second step is to undertake an “Industry Scan” which also considers ease of market entry into the industry.  In researching market entry requirements, you should include:

• Market entry recommendations
  • which foreign market
  • timing
  • scale of entry
• Mode of entry recommendations
  • exporting
  • turnkey project
  • licensing
  • franchising
  • joint venture
  • wholly-owned subsidiary
• An assessment of the type of foreign direct investment (FDI) that should be pursued
  • green-field investment
  • acquisition or merger
  • A comparison of host v/s home country costs, benefits and policies

Your third step is to undertake a “Market Scan” which also considers marketing strategies to establish SunGrabber products within each country.  In researching marketing strategies, you should also:

• Discuss potential marketing strategy options (marketing mix decisions)
  • product attributes
  • distribution strategy
  • communication strategy
  • pricing strategy
• Propose market segmentation and target marketing opportunities/options
• Discuss any reasons for varying the product mix based on:
  • national culture
  • economic development
  • product and technical standards
  • distribution channels
• Discuss opportunities for new product development in the proposed market
  • dispersion of research and development
  • integration of research and development with marketing and manufacturing
  • cross-functional teams
• Discuss the value of competing globally in the context of the proposed new venture
  • location economies
  • experience effects
  • leveraging skills within global network

The final step of your preliminary feasibility study is to make recommendations as to appropriate a “Business Strategies” for SunGrabber in each country.  With your business strategies, you should include:

• An examination of the most appropriate international business strategy to be adopted
  • international
  • multi-domestic
  • global
  • transnational
• Recommendations as to potential strategic alliance opportunities
  • advantages
  • disadvantages
  • partner selection
  • alliance structure
  • alliance management
• Recommendations with respect to local staffing policies/practices
  • ethnocentric
  • polycentric
  • geocentric
• An examination of the relationships of staffing policies to strategies
• reasons for premature return on expatriate manager
• Strategies to increase success of expatriate manager
  • selection
  • testing of psychological traits
  • training
  • repatriation
  • monetary compensation

 

Your team feasibility study typically should include:

 

Cover Page

Contents Page

Executive Summary

Section                 1:                            Opening Statement (Introduction)

2:                            Business Opportunity

3:                            Country Scan

4:                            Industry Scan

5:                            Market Scan

6:                            Business Strategies

7:                            Conclusions

8:                            Recommendations

 

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