METAFAB MANUFACTURING COMPANY
In today’s global village most businesses are growing internationally. Multinational Enterprises such as Nestle, Unilever, Matafab and the likes directly investment in foreign countries are very popular because most companies operate in different countries (Hill, 2008).This paper is an ev0aluation of Matafab’s present foreign market strategies. In the face of globalisation and an increasingly interconnected world, many firms attempt to expand their sales into foreign markets. International expansion provides new and potentially more profitable markets; helps increase the firm’s competitiveness; and facilitates access to new product ideas, manufacturing innovations and the latest technology. However, internationalisation is unlikely to be successful unless the firm prepares in advance and adopt the right foreign market strategies. According to Knight (2000), advanced planning has often been regarded as important to the success of new foreign ventures. Hence this paper sought to evaluate Matafab’s present foreign markets strategies and provide advice on the strategies to develop as well as justified the need for Matafab to draft a global strategy. Matafab decided to have foreign presence in 1997 triggered by the growing influence of workers in the ECOWAS region as well as the for seen strengthening of free trade amongst countries in the ECOWAS by the ECOWAS parliament will help the company’s products gain market acceptance. Matafab’s motive to export to foreign markets is more proactive than a reactive one. The decisions were influenced by; Profit goals: Matafab views foreign markets as means to make short-term profit at the initial stages of entry whilst keeping an eye on growth depending on feedback received from past efforts. Managerial urge: managerial urge is a motivation that reflects the desire, drive and enthusiasm of management towards global marketing activities. This provided good reasons for Sophia, the sales manager to join a trade mission to some countries in the ECOWAS region – a tour organised by the Ghana Chamber of Commerce. This trip convinced the marketing manager that there was ample buying power to make exporting profitable opportunity. This action of Matafab’s is a reflection of general entrepreneurial motivation of a desire for continuous growth and market expansion. Foreign market opportunities: it is evident that market opportunities act as stimuli only if the firm has or is capable of securing those resources necessary to respond to the opportunities. In general decision makers are likely to consider a rather limited number of foreign market opportunities in planning their foreign entry. Moreover, such decision makers are likely to explore first those overseas market opportunities perceived as having similarities with opportunities in their home market. It is against this that Matafab perceives markets of countries with ECOWAS to posses’ similar characteristics as that of Ghana hence their quest to take advantage of the opportunities. This perception was also magnified by the travel of their marketing manager to countries in the sub-region which offered her some knowledge of those markets which eventually propel them to enter those markets. Economies of scale: Becoming a participant in global marketing activities may enable the firm to increase its output and therefore climb more rapidly on the learning curve. Sales figures in all Matafab’s product lines had reached GHs 25 million in Ghana which to some extent, one can make a case for sales reaching it elastic limit in the country. Hence opportunities to grow further in Ghana are limited. With this in mind, visiting the old argument by Boston Consulting Group that clearly states that doubling of output can reduce production cost by up to 30 percent. Matafab’s decision to try foreign markets will increase production and can therefore reduce the cost of production as fixed cost can be spread over...
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