Business Economics Assessment Assignment Sample

Introduction - A Potential Market Entry Strategy for Complementary Medicine Group into the Philippines

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Complementary Medicine Group is one of the largest service and goods provider in the complementary medicine industry of Australia. The company has been in operations for the last five years and has emerged as a leader in complementary medicines.

• Product/Service: The company provides therapeutic services as well as over counter pharmaceuticals in the country. Homoeopathy medicines are also provided by the company in the market.

• Promotion: the target market of the company are the individuals who are now shifting from the allopathy medicines for alternate and safe from side effects ways to cure their problems and diseases. The company uses the internet mainly as it marketing tool as it is the cheapest resource to reach the target audience and as well covers the wide spectrum. The company also uses the referral system as a promotional technique. The individuals who use the services or the products are provided with a discount when they refer the product of the service to other individuals when the person buys the products and the services (Hamilton & Webster, 2018).

• Price of Products and Services: the price of the product and the services will be set up keeping in mind the income level of the general population of the Philippines, which will be quite different than that is in Australia due to the differences in income.

• Place: the company mostly uses the online method to offers the products to the customers. But the services are rendered at the home of the customers. The online platforms offer great convenience for the company as well as the customers. The company has a great distribution channel and has several warehouses around the country which allows the smooth movement of products to the clients (Kozubikova et al., 2019).

PESTLE Analysis

• Political Environment: The Philippines is a democracy located in Asia, where the head of the government is the President. The government of the country has been stable for years and the elections are held reasonably. The military plays no role in the operations of the government. Corruption is one of the main issues of the country's politics for the years and with the expansion of the economy of the country the corruption goes up in the country and the bureaucrats are the people who benefited the most from the corruption as they abuse their powers. And concerning the ethics, the and ease of doing business the rank of Philippines is not very good. The world bank's ease of doing business rank of Philippines was 95 in 2020, which was 124 in the year-earlier, which is a great initiative but still a long distance to cover (Contractor et al., 2020).
• Economic Environment: The Australia and Philippines traded around $8 Billion in the year 2020, which is an almost 70% increase from the last decade. There are two trade agreements between the countries namely, ASEAN and AANZFTA, the agreements between the countries allow free and fair trade. The economy of the Philippines majorly depends on the manufacturing sector and the agriculture sector. The service is growing over the years but it is still lagging behind the other two sectors. The inflation in the country has been slightly stable and in 2021 it stands around 2.5% while in the years 2018-19 it was around 5%. The inflation rate of the country has also been very stable since the also decade and stays in the range of 2% to 3%. The GNI per capita of the nation is $4000 in 2020, makes it among the emerging market economies (Fabuš, 2017).
• Social Environment: With the continuous rise in the GNI per capita over the years the customers in the Philippines are spending more and more each year. Online shopping has been a hot trend in the nation as youngsters like to shop more in online stores. The majority of the population of the Philippines follows Christianity as the religion and its followed by Islam. It is fairly a mix-culture with local customs and a blend of western influence. There are two official languages in the country namely, Talagao and English. But in general, people likes to speak Talagoa, surely which has several dialects (Buckley et al., 2018).
• Technology: Around 70% of the population of the Philippines has access to the internet, which is a great number keeping in mind that the economy is an emerging market economy. The urban penetration of the internet is higher than the rural as around 85% of the urban population of the country has internet access. The government of the Philippines has stringent laws in place to take care of data security and its breach. The laws have been implemented recently due to the several instances of breach of data in the country. The automation in the country is quite low as compared to other emerging market economies (Sharma et al., 2020).

Trends in the PEST Analysis

• From the above PEST analysis, it can be said the major reasons for expanding the business in the Philippines are the low GNI and higher internet penetration.
  Low GNI: the low GNI per capita in the Philippines is one of the major reason for the expansion of the business as there are not enough Physicians in the country and every citizen does not have access even to the basic healthcare facilities. Complementary medicines have the potential to solve this problem in the country. The people can have access to the medicine and way cheaper than the allopathy. The cost is one of the major reasons the 40% of the population of the country does not have the capacity to receive good healthcare facilities (Nambisan et al., 2019).
• Higher Internet Penetration: The country has a higher internet population as most of its population constitutes of young people and they have a preference for online shopping. This can be a big advantage for the company as the company majorly rely on online platforms for the sale of its products. The higher better internet and connectivity infrastructure would help the company to operate even remotely from Australia for some of its operations, which can be a cost-effective strategy for the company (Bahoo et al., 2020).

Alternative Distribution Strategy

The company can use the following two distribution channels for the products are:

• Online Sales: The company specialised in online sales in the home country and as it wants to expand its business to the Philippines, the online sales strategy or the distribution channel can be the best method for the company to operate in the initial stage of the business. Since the urban internet penetration is quite high in the country it can be the most effective channel for the company (Kozubikova et al., 2019).
• Multi-Brand stores: the availability of the products at the multi-brand stores in the Philippines can also be a good strategy for the company. Since only the youngsters are not the only target group of the company in the Philippines, the partnership with the local supermarket chains can also be a better approach to get noticed by the aged target audience in the country (Fabuš, 2017).
  
  

Marketing Strategy

The company need to have an aggressive approach to marketing to capture a good market share in the Philippines, the following are the two ways that can help the company to acquire a higher market share from the initial phase of its establishment in the country:

• Social Media: the use of social media platforms is very widespread in the Philippines, and this can be the best way to market the products on social media platforms. Social media platforms are also a very new and effective way to market the products as they are done in an algorithm based manner. Due to it be based on the algorithm means that it can reach and show offers and deals to the customers repeatedly (Buckley et al., 2018).
• Loyalty Marketing: the complementary medicines have their different target market and it is increasing in recent times as people are very interested in these types of alternative medicines and therapeutic services due to the recent studies showing the side effects of allopathy medicines. And being with less or no side effects, it is also cheaper comparatively. The company can market its product through loyalty points or a referral system. This would also make the customer vase grow larger and also make the existing customer base highly loyal to the brand (Sharma et al., 2020).
  
  
  

Final Decision based on the Analysis

Through the PEST analysis of the Philippines, it can be said that the expansion of the business in the nation can be a good idea as the company through its products and services will solve a major problem in the nation. There is a need for a better and cost-effective healthcare system in the nation that has a per capita GNI 14 times smaller than Australia. There is also an availability of infrastructure in the nation, which is necessary for the company to set up the business there. But there are also some issues, like the bureaucratic hassles in the country with the widespread corruption in the nations. But overall it can be traded with the larger untapped opportunities in the Philippines.

References

• Bahoo, S., Alon, I., & Paltrinieri, A. (2020). Corruption in international business: A review and research agenda. International Business Review, 29(4), 101660.
• Buckley, P. J., Enderwick, P., & Cross, A. R. (Eds.). (2018). International business. Oxford University Press.
• Contractor, F. J., Dangol, R., Nuruzzaman, N., & Raghunath, S. (2020). How do country regulations and business environment impact foreign direct investment (FDI) inflows?. International Business Review, 29(2), 101640.
• Fabuš, M. (2017). Current development of a business environment in Slovakia and Czech Republic. Entrepreneurship and Sustainability Issues, 5(1), 127-137.
• Hamilton, L., & Webster, P. (2018). The international business environment. Oxford University Press.
• Kozubikova, L., Kotaskova, A., Dvorský, J., & Klju?nikov, A. (2019). The impact of political factors' perception on suitability of international business environment: the case of startups. Economics & Sociology.
• Nambisan, S., Zahra, S. A., & Luo, Y. (2019). Global platforms and ecosystems: Implications for international business theories. Journal of International Business Studies, 50(9), 1464-1486.
• Sharma, P., Leung, T. Y., Kingshott, R. P., Davcik, N. S., & Cardinali, S. (2020). Managing uncertainty during a global pandemic: An international business perspective. Journal of business research, 116, 188-192.