CaseStudy 4: Prosperity Painting Equipment
CaseStudy 4: Prosperity Painting Equipment
JamesVreeland is a global marketing director with Prosperity PaintingEquipment. The firm distributes painting tools for three automobile-developing companies. Zhang Chen, the company’s director, wants thebusiness to start operations related with distribution of paintingsupplies for the SAIC GM Wuling Motor Co. The intention is todistribute the global functioning of a large automobile producer withpainting equipment hence the reason why Vreeland was given the taskof presenting the firm’s investing associates that will segment theauto market in China. The strategy created has to persuade theinvestors to provide the needed resources for the growth ofProsperity Equipment.
ACompetitive Analysis for Prosperity Painting Equipment
Analysisof Automobile Business in China
Automobile manufactures in China had a total stake of 29.1% of China’s market, in 2007, making it the second largest internationally.
China’s achievement is as a result of the pricing in the Chinese market, precisely in the large-vehicle sector and it primarily appeals to Chinese customers.
The Chinese market is subjugated by established international brand, with a market share of 70.9% (Chang, 2013). Owning the highest automobiles manufacturers in China by combined ventures. Consequently, only 20 manufacture in large quantities among more than 100 car manufacturers.
The largest selling brand in China is the Chery its success is attributed by the Chinese company holding of the blueprints. It is operated-owned and eyeing the Western Europe and the U.S markets with a collaboration between Volkswagen and Shanghai Automobile which is strategizing to provide an automobile with a more striker price.
Another key player in the Chinese automobile industry is SATC GM Wuling Automobile firm (Chang, 2013). Its motors are small and target consumers who earn $200 -$600 per month. The products are not manufactured for the advanced markets.
Chinese Automobile ships: Estimates of Europe and the United States being inflated with inexpensive and famous Chinese vehicles may be untimely. Global joint projects in China apart from the Honda, have a minimal interest in trading automobiles away from China since they would suffer economic and political disadvantages. As an alternative, they are centering on tapping the developing Chinese Market.
TheSegmentation Base Appropriate for Prosperity Painting EquipmentIndustry
Ina country like China, for instance, Segments comprises of nationsthat have not yet matured and can offer enormous need. Segmentationhas to be large enough to guarantee investment and enhance thepotential of growing. The intensity of competition is at a lowerrate since it’s an intermediate-industry and it has the potentialof developing in a rapidly growing market. (Wale et.al. 2012).Through the act of employing global professional employees and withthe support from investors the Chinese automobile market will expandwith much experience. Therefore, stability is a criticalconsideration in the current world where commodities are in variouslife-cycles phases and where preferences are continuously varyingwith the dawn of the internet and online buying throughout theborders ranging from nations of all levels of development.
Anotheressential key consideration is the ability to communicate with thetarget market, defining the accessibility of the market is alsocritical. The segments should respond distinctively from othermarket divisions to developing strategies and easily noticeable fromthe rest. On the other hand, targeted consumers should be averageusers and heavy users in usage levels ranging from low-incomers andaverage-incomers.
VariousAutomobile-Manufacturing Segments Regarding to the Degree of Focus onthe Chinese Market, Joint-Venture Partnership, and Export Orientation
Automobile-producingsegment regarding the Chinese market: The automobile business inChina is the second largest globally (Gao et.al. 2014). Big namesand international brands mostly dominate Chinese market. The secretto success is relatively low cost. Making it necessary for thepainting equipment to enhance growth and generate more returns. Ahigh number of automobile manufacturers lacks great production, andtheir commodities are concentrated. They focus on covering severalChinese automobile markets as possible.
Automobilemanufacturing segment based on an emphasis on the joint-venturepartnership: their objective is not only dominating the Chinesemarket but also investing in other markets and expanding the share ofmarkets. Through the joint-ventures which are not fully controlled bythe government, it makes it more convenience for investors to enterthe Chinese market (Gao et.al. 2014). Additionally, they can takeadvantage of cheap labor and develop factory through partnering withthe Chinese. Consequently, they may offer an automobile with highstriker price, positioned upmarket and also manufacture in largequantities with global operations.
Automobile-manufacturingsegment based on focusing on the export orientation: they export manycars mainly for developing states. The competitiveness in the Chineseauto market has been vibrant and more dynamic with the invasion ofinternational and the local investors (Gao et.al. 2014). The cheapand famous vehicles are expected to stiffen competition forautomobile manufacturers in the U.S and Europe. The key concern isquality by ensuring there are safety and environmental standard. Moreso, they own plants in China which are mostly meant for marketsoutside of China.
TheTargeting Approach that is Appropriate for Prosperity
ProsperityPainting Equipment is an average-sized company that can be successfulglobally same way in the home-country, through advocating for theneeds of one segment. In its conception, it cannot manage to providesomething for everyone it can only focus on one market and invest itin a particular brand through a strong targeting plan. With the helpof Chinese partners, the investors can enter into the market withoutmuch struggle. (Wale et.al. 2012). More so, it can cover small firmsand low-incomer who have controlled and use cars at a higher rate astargeted clients, offering inexpensive prosperity painting equipment.Nonetheless, the company can advertise its brands among the localmarket as well as partner with investors who will segment theautomobile business in China.
Chang,S. (2013). Multinationalfirms in China: Entry strategies, competition, and firm performance.
Gao,P., Hensley, R., & Zielke, A. (2014). A road map to the futurefor the auto industry. MckinseyQuarterly,(4), 42-53.
Wale,K., Dvorak, B., Kaza, S., & Santhanam, N. (2012). Automotiveinnovation in China: The view from General Motors. MckinseyQuarterly,(1), 85-92.