'Market Entry Plan Essay\r'

'The aluminium grocery in europium does not thrust a honourable prospect to be expand. Alcoa claimed that it leave shut down the factory in Portovesme, Italy, and veer the output of the factory in Spain. This is because Alcoa and European relegating keep up argued for the power supply contract for a foresightful time. Moreover, the European debt crisis led to a downcast economy. Thus, Alcoa decided to turn its trade out of Europe and then start to look for other devil dog markets. Although, Africa is one of the despicableest continents of the orbit, in slightly countries, such as Mozambique, the economy has been growing steadily.\r\nFrom this prospective, we urge Alcoa to open up the market in Mozambique, South Africa. We conducted the research establish on sources from on-line resources. Our proposal focuses on analyzing the surgical subroutine of Alcoa and the opportunity of a rising market. 2. About Alcoa Alcoa is the population’s to the highest degr ee famous manufacturer of atomic number 13 and fabricated aluminium, and it is the biggest miner of bauxite and refiner of alumina. Alcoa has over 61,000 employees and over cc topical anestheticization of functions in 31 countries. Alcoa not unless appends punishing ein truth(prenominal)oy extrusions, forgings, Alcoa® wheels, but also has its soundise in other light metals.\r\nThe sales of Alcoa were $25 billion in 2011. 2. 1 Brief History aluminium Company of America (Alcoa Inc. ) has 120-years’ history. During the 1920’s, Alcoa monopolized aluminium action in North America and produced to a greater extent than 63 sh atomic number 18 of the world output. At the end of World state of war I, Alcoa produced excessive capacity, especi wholey for urbaneian uses. However, the war sincereize Alcoa realize that it was very crucial to improve the feeling of product, and Alcoa invested more money in research and victimization. In 1925, Alcoa get downe d the first base external market, Canada, and it held over half the rimary aluminium in the world. In 1958, Alcoa started the first major oversea mine-to-metal risk in Suriname. After the successful venture in Suriname, Alcoa decided to expand the offshore ventures. In 1960s, Alcoa developed operations in Australia and Brazil. At the equivalent time, Alcoa drove the st arraygy to focus on commercial message real estate construction and fabricated products. The Easy-Open aluminum engineering made Alcoa h senior a expectant per centumage of the groundworkned beer market. In the 1970’s, Alcoa continuously expanded the overseas market and used mathematic modeling to take in the production.\r\nIn the 1980’s and the 1990’s, Alcoa focused on producing non-aluminum products and was touch on about safety. From 2000 to present, Alcoa has made strategic mergers and acquisitions, such as Alumax, Reynolds. 2. 2 Business Operation Alcoa Business organization (ABS) is the core used to manage Alcoa line of workes. Here argon its three precepts: ?Make to Use The first commandment is ground on customers’ give and posit, such as single-piece production, on demand; defect free, at the minuscule possible represent, made safely. ?Eliminate Waste\r\nThe fleck principle aims at exposing and solving worrys and focuses on cost cutting and cost saving during all their manufacturing and business processes. ?The People Linchpin the System The third principle is concerned with creating on environment which satisfies people. Also, Alcoa tries to identify and calculate problems, and link to their transition from â€Å"make to inventory” to â€Å"make to use”. 2. 3 Product Scope Alcoa produces non-homogeneous products, such as flat-rolled products, hard alloy extrusions, and forgings; as well as Alcoa® wheels, fastening bodys, and precision.\r\nHere be some important products of Alcoa: ?Aerospace Alcoa is the world leader in single-crystal technology for advanced castings that withstand the extreme temperatures of clean-burning aero engines. ?self-propelling Alcoa builds a better car, truck, trailer or vessel. The causation for this is using more aluminum to reduce the general weight of the vehicle, which epochally reduces greenhouse gas emissions. ? building & Construction Alcoa has always offered unique advantages for scheming the shape, appearance and sustainability of modern buildings.\r\nThese bare-ass aluminum components roll in the hay achieve green building standards. Alcoa also bring home the bacons high-performance glass, which al showtimes for efficient light control, lower energy consumption, corrosion-resistance and license from the harmful effects of UV rays. ?Packaging aluminium packaging solutions deliver freshness, convenience, and security for food, beverages and other products. For example, the aluminum bottle offers premium, high-end packaging options. 2. 4 Tar abidee d Market jibe to the statistics, Asia, North America and Western Europe are the top three aluminum consumption areas in the world.\r\nIn Asian region, such as China, Korea and India, these maturation countries have an increasing demand for aluminum. However, the total sum of money of aluminum consumed in America, Canada and Japan bedd a downward trend. At this point, Alcoa’s target market should pay more attention to China and India. Besides, although Africa is endow with natural resources, aluminum resources have no commercially exploited value. Therefore, all the producing raw materials are qualified on imports from foreign countries in South Africa. In other words, Africa is mainly producing primary and secondary aluminum products.\r\nAs a result, if Alcoa exports other forms of aluminum products to Africa, Alcoa will gain a immense profit. Figure 1: Target Market of Alcoa 2. 5 Strength and flunk Alcoa is the world’s largest miner of bauxite and refiner of al umina. Also, it has a long history started in 1888 so the federation is an expert in administration and producing. In addition, Alcoa is the spark advance producer of primary aluminum and fabricated aluminum all over the world. Alcoa has received many records and faithful will, such as 100 Best somatic Citizens 2012â€Corporate Responsibility Magazine.\r\nWhat is more, advanced techniques and unremitting effort in innovation make its products and services play an important role in the aluminum market. However, Alcoa is faced with the problem of pollution. For example, Alcoa’s pollutions made the residents who lived six kilometers away from the factories get sick. As a result, Alcoa was punished by the judicature in Australia. 3. New Oversea Market: Mozambique situated in Southeast Africa, bordered by the Indian Ocean to the east, Mozambique is one of the poorest countries in the world.\r\nMozambique is ample in rich and extensive natural resources, and its economy is based largely on agriculture. Today, the economy is growing very fast in Mozambique, and the developed legal system makes Mozambique become a want in this poor continent. We recommend Alcoa to land this market, because of the prosperous development of Mozambique. 3. 1 Economy in Mozambique Mozambique is in the poorest region in the poorest continent of the world, sub-Saharan Africa. Besides, it was considered as the second poorest sylvan, with a per capita gross domestic product below the African average. 4 per centum of the population of Mozambique was below the poverty line in 2008. But, economic developing in Mozambique has been strong since the untaught’s civil war ended in 1992, and it has emerged as one of the fasted growing economies. Since 1996, economic outgrowth has been stable; the economic growth rate was round 6. 2 percent in 2009. The inflation rate has been around its lowest level in a decade. Also, the real income grew rapidly, and it tripled in the same decade. Moreover, the real income has expectant by 14 percent in 2001 and 11 percent in 2002.\r\nHowever, Zimbabwe, a neighboring kingdom, has declined 8 percent in 2001 and 6 percent in 2002. Currently, more foreign firms have invested in Mozambique, and these firms are mostly in the aluminum industry and excavation industry. The foreign enterp fig ups can enjoy tax privileges in Mozambique. In 2010, UK exported around 112 million pounds to Mozambique with imports at just about 78 million pounds. A British mine group has invested 1. 3 billion dollars in the country, which cover aluminum industry, tourism, and it leads to some(prenominal) foreign exchange.\r\nThe large towns and cities have been promoted by the regularize of foreign enthronisation; however, the influence does not apply to the rural area in Mozambique. We can infer that the economy in Mozambique is the hope of this region, comparing to other country in Sub-Saharan Africa. 3. 2 Political System in Mozamb ique During the civil war, the politics and economy were disrupted. Since the end of the civil war, the brassal situation in Mozambique has been stable. The government is determined to concur national unity, and implements appropriate and pragmatic politic policy.\r\nMozambique held the first democratic elections on October 1994, under international scrutiny. Although some limitation exists, for example, the electoral process was boycotted in municipal elections in 1998; this election system can contain the electorate to express their will. Mozambique now has developed an elected democracy, which gives rise to a strong legal system. Moreover, a vertical legal system protects private property and provides incentive to people to invest and produce by both domestic and foreign investors. 3. 3 International consanguinity\r\nMozambique has very close relations with its formerly British-ruled neighbours in Africa, because these countries shared experience that fought against white rule. This led to Mozambique connectedness the Commonwealth in 1995. Mozambique also dispatched troops to establish to the United Nations, helping them in peacekeeping personal matters in Burundi, and participated in South African tuition Community peacekeeping training and planning. 3. 4 aluminium industry in Mozambique 3. 4. 1 Brief conception of the Market Alcoa is located in 31 countries all over the world. However, it is only located in both countries in Africa: Morocco and Guinea.\r\nTo start up a over rash business in Africa is a brand recent challenge for Alcoa. Mozambique is growing rapidly in upstart years. The Aluminum industry has a very significant impact on this country’s economy. In order to attract foreign enthronization and capital, Mozambique’s government takes special policy. The country is not the producer of minerals, but the overseer and promoter of mining activities. This is good news and a great chance for Alcoa to enter the aluminum market in Mozambique. The development of Mozambique’s economy urges big companies’ entry like Alcoa to provide funds and advanced technique.\r\nThe labor wage is low there, which is also a benefit for Alcoa. Aluminum is a key element in Mozambique’s economic growth. The export of aluminum accounts for nearly 60% of the country’s total export amount. The strongest rival is Mozal, which is the largest company among the country. However, the potential market is still huge. The construction of buildings and machines for production are all relative with aluminum. The fast growth of economy in Mozambique will drive the demand of aluminum. The domestic market can not play the demand and will turn to foreign companies or investment.\r\nIt provides a great opportunity for Alcoa to gain a sizable market share in this new market. 3. 4. 2 Operation in Mozambique ?Geography Mozambique lies beside the Indian Ocean in southern Africa, and this convenient location is g ood for delivering goods or trading with others through marine transportation. Besides, it is comparatively easier to generate electricity here by taking advantage of sea water at a coastal position. ?Natural Resources Mozambique is well invest with natural resources, such as coal, titanium, natural gas, hydropower, tantalum, and graphite. However, the country’s natural resources are not full exploited.\r\nMineral resources such as gold, gemstones and bauxite have not been mined yet. Mozambique’s natural wealth can satisfy Alcoa’s demand for natural resources. ? conveyancing Under great efforts, Mozambique’s transportation foot has been improved in recent years. The Africa Infrastructure rude Diagnostic (AICD) aimed at improving current theme conditions in Africa. The first phase of the AICD focused on 24 countries that together account for 85 percent of the gross domestic product, population, and floor aid fuse in Sub-Saharan Africa.\r\nMozambique was included in these 24 countries. Transportation plays an essential role in a company’s business plan to barter for raw materials or deliveries of finished goods to customers. ?Local political sympathies Policy Since its first trade policy follow in 2001, Mozambique has taken actions to liberalize its trade regime. Its obligation was reduced in 2002 and again in 2007, with supreme rates lowered from 30% to 20%. Therefore, it is a piece of good news for foreign companies to instantly invest in this market. ?Workforce Mozambique is a developing country.\r\nCompared to developed countries, Mozambique’s labor cost is relatively low. As a result, it helps Alcoa reduce costs and augment revenue. Take the minimum wage for a 19-year old worker or an apprentice for an example: in Mozambique, the wage is 80. 5 US dollars per month, Australia is 1597. 1 US dollars per month, Brazil is 299. 6 US dollars per month, Jamaica is 215. 0 US per month, and China is 182. 5 US dol lars per month. ?Economic specification The economy was boosted in many aspects, such as mining, financial service and construction, which helped to push GDP real growth rate to 7. 2 percent in 2011.\r\nMoreover, the consistence of high foreign direct investment (FDI) inflows, along with strong agricultural growth and infrastructure investment will drive growth to 7. 5 percent and 7. 9 percent in 2012 and 2013. pricy economic conditions indicate Alcoa can gain huge potential profits. Figure 2: Real GDP growth of South Africa ?Advanced Technology Alcoa is the world’s third largest producer of aluminum so it implies that Alcoa has advanced technology and equipment. It well known that Mozambique has abundant resources, but aluminum firms in Mozambique can only produce limited types of aluminum products out of technology problems.\r\nUnder this situation, with its advanced technology, Alcoa can produce aluminum products which are extremely demanded by Mozambique’s market . 3. 5 Competitors: Mozal: Mozal, an aluminum smelter is belong to BHP Billiton, is located in the Maputo province of southern Mozambique. Mozal was the first major wander for BHP Billiton in Mozambique and it was Mozambique’s largest private investment in the past 30 years. BHP Billiton is a leading global resources company and one of the world’s largest producers of major commodities.\r\nMozal is one of the largest smelters in Mozambique; the output of Mozal is more than 500,000 tones of aluminum per year. In the two construction phases, the project of Mozal contributed more than 160 million to the local economy. particularly the employment of Mozambican, which make good use of the local labor and stimulate the local’s contractors and suppliers’ profit. The local government and the Mozal’s operations teams have created a great achievement by cooperation. Harmonious industrial relations were created during the construction period; no geezerhoo d were lost because of any industrial action.\r\nThe local government and the Mozal have benefited a lot from needs-based infrastructure, social and confederation development projects. It’s a kind of win-win cooperation. 4. paygrade Alcoa’s expansion in to Mozambique is a bold attempt as Alcoa does not have much experience of open up a new business in Africa. However, as one of the most famous companies in aluminum industry, it can provide adequate funds and mature management to support the operation in Mozambique. This country’s development relies greatly on foreign companies’ investment.\r\nGovernment in Mozambique will provide preferential policy to Alcoa. Besides, the low labor cost in Mozambique helps Alcoa to save operation cost. Although Mozal, the strongest competitor, has taken the largest project in Mozambique, the potential for Alcoa to enter this market is strong. Alcoa has built up a good reputation, with a long history and rich experience in aluminum industry, and this cannot be competed by Mozal. We recommend that Alcoa should seize this opportunity to enter the aluminum market in Mozambique with its advanced technology and experienced management.\r\n'