Market Entry Plan

Topics: Africa, Investment, South Africa Pages: 10 (2706 words) Published: April 19, 2013
Table of Content

1. Introduction2

2. About Alcoa2

2.1 Brief History2

2.2 Business Operation3

2.3 Product Scope3

2.4 Target Market4

2.5 Strength and Weakness4

3. New Oversea Market: Mozambique5

3.1 Economy in Mozambique5

3.2 Political System in Mozambique5

3.3 International Relationship5

3.4 Aluminum Industry in Mozambique6

3.4.1 Brief Introduction of the Market6

3.4.2 Operation in Mozambique7

3.5 Competitors8

4. Evaluation9



Opening up foreign markets is very important for the Aluminum Company of America (Alcoa Inc.), and more than 200 locations belong to Alcoa all around the world. The Aluminum market in Europe does not have a good prospect to be expanded. Alcoa claimed that it will shut down the factory in Portovesme, Italy, and reduce the output of the factory in Spain. This is because Alcoa and European commission have argued for the power supply contract for a long time. Moreover, the European debt crisis led to a depressed economy. Thus, Alcoa decided to turn its market out of Europe and then start to look for other oversea markets. Although, Africa is one of the poorest continents of the world, in some countries, such as Mozambique, the economy has been growing steadily. From this prospective, we recommend Alcoa to open up the market in Mozambique, South Africa. We conducted the research based on sources from on-line resources. Our proposal focuses on analyzing the operation of Alcoa and the opportunity of a new market.

2. About Alcoa
Alcoa is the world’s most famous producer of aluminum and fabricated aluminum, and it is the biggest miner of bauxite and refiner of alumina. Alcoa has over 61,000 employees and over 200 locations in 31 countries. Alcoa not only provides hard alloy extrusions, forgings, Alcoa® wheels, but also has its expertise in other light metals. The sales of Alcoa were $25 billion in 2011.

2.1 Brief History
Aluminum Company of America (Alcoa Inc.) has 120-years’ history. During the 1920’s, Alcoa monopolized aluminum production in North America and produced more than 63 percent of the world output. At the end of World War I, Alcoa produced excessive capacity, especially for civilian uses. However, the war made Alcoa realize that it was very important to improve the quality of product, and Alcoa invested more money in research and development. In 1925, Alcoa entered the first external market, Canada, and it held over half the primary aluminum in the world. In 1958, Alcoa started the first major overseas mine-to-metal venture 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 same time, Alcoa drove the strategy to focus on commercial real estate construction and fabricated products. The Easy-Open aluminum technology made Alcoa hold a large percentage of the canned beer market. In the 1970’s, Alcoa continuously expanded the overseas market and used mathematic modeling to control the production. In the 1980’s and the 1990’s, Alcoa focused on producing non-aluminum products and was concerned about safety. From 2000 to present, Alcoa has made strategic mergers and acquisitions, such as Alumax, Reynolds.
2.2 Business Operation
Alcoa Business System (ABS) is the core used to manage Alcoa businesses. Here are its three principles:

Make to Use

The first principle is based on customers’ will and demand, such as single-piece production, on demand; defect free, at the lowest possible cost, made safely.

Eliminate Waste

The second principle aims at exposing and solving problems 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....
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