Used Products Germany

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Expansion opportunities in Germany
Market research aimed at providing recommendations on strategic marketing decisions

Iryn Jimenez Amsterdam, January 2012

Expansion opportunities in Germany
Market research aimed at providing recommendations on strategic marketing decisions entering the German market

ISM Jimenez Student number: 518756 Class: 4IBL1 Amsterdam, 12 January 2012 Hogeschool van Amsterdam/ School of Economics and management (Amsterdam University of Applied Sciences)

Dissertation supervisor: Mr. S. Molenaars Second dissertation supervisor: Ms. Y. Gunning Dissertation company: Used Products Company supervisor: Mr. Berthold Bakker

Summary

Used Products B.V. is a Dutch franchise chain specialized in pawning, buying and selling second-hand products. Motivated to expand their business to Germany, the firm’s management team realized that their knowledge of the German market was insufficient to make well-founded decisions on further international expansion. The aim of this research was to identify expansion opportunities in the German market and to advise Used Products on the marketing strategy it should use to exploit these opportunities. Consequently, the following main question was answered: What opportunities does the German market offer that will enable Used Products to continue to expand its business? After the firm’s export potential was determined, this research focused on analyzing both the macro and micro environment and the firms most important competitors. Afterwards, an internal analysis was carried out to determine the firm’s strengths and weaknesses. Based on the results of both the internal and external analysis, recommendations were given on how to enter the German market.

The most important research findings included the following: the activities carried out by German pawnshops are strictly regulated by the government. Due to these regulations, the majority of pawnshops are specialized in pawning and buying gold, jewelry and/or vehicles. There is only one German chain with a similar concept as Used Products’. However, this competitor is mainly based in big cities and does not necessarily pose a threat. Other financial institutions, such as banks, do not pose a threat either, which is mainly because they are very strict when it comes to giving out loans.

The most important conclusions included the following: The German pawning and second-hand markets are growing and the image of both industries has improved. Germany counts 205 pawnshops. A large share of these pawnshops are located in Germany’s nine biggest cities. This leaves Used Products with plenty of expansion opportunities, especially when taking into account that Germany counts a total of 2,064 cities. Based on these research findings, the following recommendations were made: when entering the German market, Used Products should limit the products it accepts as collateral to gold, jewelry and/or vehicles as well. These products bring in the most money and will therefore lead to higher revenues. Since western and southern Germany are the wealthier parts of the country, it would also be better to focus on these regions first when entering the market. When it comes to buying used products from its customers, the firm should continue to accept a wide variety products, especially since this is something that will make the firm stand out from other pawnshops. Furthermore, the firm’s website should be more transparent in terms of interest rates and additional costs charged on loans and it should be translated in both German, Turkish and English. By doing this, it will be easier to reach people of immigrant backgrounds who often have lower incomes and are more likely to visit a pawnshop.

Index

Summary

1.

Introduction 1.1. Corporate history 1.2. Company activities 1.3. The company’s mission 1.4. The company’s vision 1.5. The company’s objectives 1.6. Revenue model 1.7. Financial background

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