Country Analysis
The proposal suggests launching the product of Company A, dog food, in Poland in Central Europe. Its location defines the country’s dynamic development and allows for access to the European Union market (“Doing business,” 2019). In addition to economic growth since joining the EU in 2004 and readjusting its legal structures, Poland’s benefits for businesses include the large population of 38 million people and the government’s support of social spending (“Doing business,” 2019). The currency is the Polish zloty, which is a quarter of the US dollar (“Pet food,” 2019). The choice of Poland is reasonable, as the food industry is one of the country’s leading sectors.
The principal conditions that should be considered include the cultural and social specificities of Poland complicated by the uneven distribution of its population. Polish customers are different from US buyers in need of personal contact, which implies the opening of local offices (“Doing business,” 2019). Another problem is that, despite the increasing number of English speakers, it is vital to speak Polish for business operations. However, Poland’s communication is as developed as in the United States and does not present a problem.
Financial difficulties refer to the difference in the American and Polish pricing schemes and lead to a possibility of legal issues corresponding to the policies of foreign businesses. The structure of companies in Poland is similar to US companies, but they have problems with access to financing and are accustomed to making decisions on pricing alone (“Doing business,” 2019). This fact defines their independence, which poses a threat to American businesses related to export costs. However, the US embassy in Poland assists companies in such matters (“Doing business,” 2019). As for the legal aspect, the Polish market is easy to access, but it has low production costs compared to the United States (“Doing business,” 2019). The correct strategy of the company will allow overcoming these issues.
Competitive Product Analysis
The food industry is one of the leading in Poland, and this fact explains previous attempts of American companies to enter the market. Hence, Company A will not be the first in the region, but the experience of its predecessors will allow minimizing risks. One of the most known companies in the Polish market of dog food is Tesco, which faced challenges resulting from financial scandals and competition from discounters (“Dog food,” 2020). However, the first factor does not apply to Company A, and it will need only to make a more attractive offer than one of the local sellers.
Another foreign company is Royal Canin, and, after the exit of Tesco from the market, it became a serious competitor. The company has proved to be more successful than Tesco due to its efficient market strategy. It represents an example of business operations of which correspond to the requirements of the country (“Dog food,” 2020). It allows concluding that Company A should consider the history of its entry into the Polish market to design a strategy that would distinguish its products.
As for pricing, Company A should establish a price that would be higher than the one of Polish companies but lower than that of Royal Canin. According to the statistics, prices for pet food gradually decrease, and this trend will make Royal Canin readjust its pricing policies in the future (“Pet food,” 2019). Nevertheless, this period will be enough for Company A to occupy a leading position in the market, and customers will perceive the two companies as equally useful. Thus, potential market barriers will be the presence of other strong business and local companies, which can be addressed through inclusion in Company A’s strategy.
Company Analysis
The manufacturing operations of Company A will take place in Poland. This decision is conditional upon lower production costs of the country (“Doing business,” 2019). It will allow the company to keep up with its competitors. The critical fiscal considerations, in this case, are income taxes, tariff rates, and trade barriers (“Doing business,” 2019). The charges are the same for all Polish residents, and tariff rates and trade barriers are established by the EU (“Doing business,” 2019). As for the market expansion, its profitability has been proved by the experience of other pet food companies, as presented above. Hence, Company A’s strategy will be profitable if it stays on the market for over a year, while establishing affordable and reasonable product prices.
After the analysis conducted above, it can be argued that in Poland, social entrepreneurship will be one of the beneficial ways for the company to develop. In modern theory, the idea of social entrepreneurship is considered a social innovation and one suggesting the activity of people who find themselves in difficult life situations. The policy of benefits and social security both from the state and from the side of the business has shown its inefficiency, making it possible to grow dependent moods and inactivity of users of a minimum set of services. Despite the development of the non-profit industry in Europe, the growth of social entrepreneurship as part of the private business will be more beneficial and socially significant.
For business people, who often invest in social programs, the technology of social entrepreneurship was not just ethically correct, but profitable, which is more understandable for an ordinary entrepreneur. Funds invested in charity using the principles of venture philanthropy and social entrepreneurship bring much more tangible results than the money spent on charity in an old-fashioned way. In the context of the sale of dog food, such an interaction with unprotected categories of the population can serve as a safe start for expanding international business. For example, a company at the initial stage of introducing a product into the foreign market may cooperate with animal shelters, veterinary companies, and animal welfare advocates.
Thus, social entrepreneurship can refer to both the private sector, as a subtype of business, and the third sector as a subtype of a non-profit organization. In international practice, it turned out that in the USA, the first option is more familiar. Nevertheless, in the European tradition, the second option is more prevalent among business people when the joint venture is referred to as the third or non-profit sector.
Proper management is an international division structure that allows controlling the company’s operations. Hence, the elements that should be considered before making the final proposal are the location of its offices and communication with the head office as well as between the branches to coordinate their work. The required political and legal regulations include the rules of the EU regarding the business operations of foreign companies and filing for the US export license (“Doing business,” 2019). Social and cultural structures will primarily affect the distribution of the company’s offices, as it will have to locate them according to the regions’ population. The strategy of the market entry will be the establishment of affordable yet competitive prices and the offer of a product different from the existing options with consideration of risks presented above.
Overall, the decision to launch the company’s branch in Poland is feasible as this market segment and the country’s economy are rapidly growing. The principal benefits of this decision are the opportunity to use the experience of companies like Tesco who failed similar projects to avoid their mistakes. In this way, the products of Company A manufactured and sold in Poland will increase its profits.
References
Dog food in Poland. (2020). Euromonitor International. Web.
Doing business in Poland. (2019). International Trade Administration. Web.
Pet food – Poland. (2019). Statista Market Forecast. Web.