International Business - South Africa
Professor Zhang
MGT-278-A
May 12th, 2021
Edgewell Research Project Part II
· Market Environment (Soriano)
Based in Fairfield County, USA, Edgewell specializes in personal care such as shaving, grooming, sun care, feminine care, and skin care. With doing business that ranges from in our own home to international, companies such as Edgewell are always looking to expand and create a wider branch of outlets to sell its products.
With every business plan to expand to a different country, it comes with its advantages as well as setbacks that can mess with how things flow. While expanding to South Africa can be a great move for the company, Edgewell has to look deeper into it and make sure they can benefit from it instead of just losing from it. South Africa can offer many reasons on why expanding would be a win-win for both parties,
Edgewell would notice the current government's economic policy-making and management has been generally positive. South Africa's response to the Covid-19 outbreak has been a standout in the region. Government debt has increased to 82.8% of GDP in 2021, up from an already high level in 2020 (78.8%) and is expected to rise in 2022 (85.7%)
In 2019, South African households had an average disposable income of about 34,037 South African Rand. The South African cosmetic and personal care products market is expected to reach USD 6.16 billion during 2020-2025 at a CAGR of 9.9%. The South African cosmetics industry recorded good growth in 2018, buoyed by the increased focus on grooming and growing presence of regional brands. The South African economy is essentially based on private enterprise, but the state participates in many ways. There is a growing focus on improving living standards among South African consumers, driven by a surge in internet access, with the number of the country's internet users more than doubling during the review period. Social media is gaining more traction, with consumers’ inclination toward global fashion and beauty trends.
https://www.mordorintelligence.com/industry-reports/south-africa-cosmetics-and-personal-care-products-market-industry
The South African cosmetic and personal care products market is expected to reach USD 6.16 billion during 2020-2025 at a CAGR of 9.9%.
· The South African cosmetics industry recorded good growth in 2018, buoyed by the increased focus on grooming and growing presence of regional brands. The weakening of the local currency and rising economic uncertainty remain the major concerns for the local market
· There is a growing focus on improving living standards among South African consumers, driven by a surge in internet access, with the number of the country's internet users more than doubling during the review period. Social media is gaining more traction, with consumers’ inclination toward global fashion and beauty trends.
· Unilever Group has the maximum sales, accounting for roughly 13% of the market, followed by Procter & Gamble, Avon, and other major players.
· Entry Strategies (Soriano)
https://edgewell.com/brands/#wet-ones
Product is not available in South Africa - company has HQ locations in North America, Europe, Asia Pacific, & Latin America
Best market entry strategy could be exporting
Main competitor is Unilever
· Marketing Strategies
• South Africa internet penetration 2025 | Statista
In todays world, a big part of marketing and finding strategies revolves around technology. With the way every country in the world is moving, we have moved from word to mouth to everything being on a screen. When trying to find the market niches, we have to assess who is able to access the technology. Based on the internet penetration rate in South Africa, the rate is 56.3% in 2020 which indicates that over half the country has access to the internet. Add a global office in africa region, add value to company as well as get the name reconingition in that part of the continent. With Edgewell not even selling in South Africa at the moment,
· Production strategies
· Human resource strategy (DeFeo)
· Financial strategy (DeFeo)
RESEARCH PROJECT
Part 2: 40 points
Draft due on May 7 (11pm), if you want some feedbacks
Final report due on May 12 (11pm)
The second part of the research project will help you build critical knowledge and skills in managing different functional activities in a foreign country (Course Objectives 4-5).
Specifically, you will practice determining the appropriate entry and functional strategies Edgewell should adopt for one of its products (one that you pick) in the foreign country you have researched. Your work should cover the following:
I. Market environment (related to the product you select) in that country Comment by Donovan Lacey: Market
1. Identify the consumer habits and trends from one or two articles in google search
2. Identify the major competitive products (local and/or foreign)
3. Identify the market size and its projected future growth (or decline)
MarketLine Advantage database our library subscribes to has information about the market size and the major competitors.
II. Entry strategies Comment by Donovan Lacey: Entry Strategy
1. Check out the website of Edgewell to see if it is already selling the product in the country
2a. If Edgewell has not expanded the product to the country, which entry strategy would you recommend to market and/or produce the product in that country and why?
2b. If Edgewell has already expanded the product to the country, which entry strategy was used? Was it the right strategy and why?
III. Marketing strategies Comment by Donovan Lacey: Market Strategy
1a. If the product is already in the country, what adaptations in the marketing mix (target customers, product features, pricing, communication, and distribution) has Edgewell adopted and do they fit the business (macro, consumer and market) environments you have researched?
1b. If the product has not entered the country yet, what changes in the marketing mix does Edgewell need to make to suit the business environments of the country?
IV. Production strategies Comment by Donovan Lacey: Production strategy
1a. If the product is already in the country, where (which country or countries) is the product produced? What are the advantages of producing in that or those location(s)?
1b. If the product has not entered the country yet, where (which country or countries) should the
product be produced? What are the advantages of producing in that or those location(s)?
V. Human resources strategy Comment by Donovan Lacey: HR
Assuming you need to hire some local employees in the country to sell and/or produce the product, recommend a few HR practices suited to the business environments of the country with some justifications.
VI. Financial strategy Comment by Donovan Lacey: Finance
Assuming U.S. dollar will appreciate in the next six months, how should Edgewell reduce its translation and transaction exposures to this exchange rate change?
Report requirements
Each team is required to submit a written report of your research, analysis and recommendations (typed and double-spaced). Your report should begin with a one-page executive summary of the key findings and recommendations. The entire write-up should be no longer than 10 pages, including the executive summary, charts, tables, figures, exhibits and references (use the APA citation style). If you need more space for the executive summary, use single space. But don’t go over the one-page limit.
Suggestions
1. Review the related topics and their pp slides discussed in the class lectures.
2. Use section headings and page numbers
3. Proofread your writing for grammar, spelling, typo and wording as they will affect your report grade.