MBA paper

Running header: Competitive advantage of CSR Company in the global market 1

Competitive advantage of CSR Company in the global market 20

Competitive advantage of CSR Company in the global market

Name of the student

Institutional affiliation

2.1 Title of the project

Competitive advantages of export orientated railway products of CSR in global marketplace.

2.2 Objectives of the study

1. Identifying the key success factors in CSR’s product and service.

2. Explain the marketing strategy of CSR in developing countries by marketing theories.

3. Explore the opportunities for future development in global competition

2.3 Background of the study

2.3.1 Literature review

With the current trends of the global market, fresh strategies are required by business organizations to adjust and fit the dynamic business morphology ( Birkinshaw, 2004). The adjustment process should be geared towards enhancing the growth and development of the company centred on its strategic mission and plans within a defined framework. In institution of such business strategies for the growth of the business, the franchise must focus on the basic four facets of business growth and development (Marketing, n.d).

Broadening of the revenue base: Any business organisation keen on accelerating its growth must identify the growth indices of the company (Sadler, 2003). In widening the revenue base, it is required that the organisation shall embark on very intensive marketing strategy to improve sales of the product while keeping the costs of operation at relatively invariant levels (World watch, n.d). This shall involve business forecasting skills to be able to identify which pointers of growth should be strengthened in the organisation in order to broaden the revenue base. Sadler (2003) asserts that the goal of any business must be to increase the avenues of inletting revenue because this automatically increases the profitability of the organisation. This is also affirmed by Chalmin, in his dispositions, The Global Markets “…Business strategy must channel its focus on shielding the market it has already but more significantly, enhancing the revenue base.” (2008).

Competitive advantage: competitive advantage should be the next driving force of the business venture. To increase the revenue base, Sadler (2003) admits that wading off the competition from similar ventures must be pursued in earnest. The current business environment calls for customization of products in such a way that the venture gets an edge in terms of competition. Analysis of consumer behaviour is fundamental to staying ahead in the race towards getting an edge in the sale of products. Drucker & Joseph, in their theory of marketing and strategy (2008), has provided very basic institutes of cutting a niche of the market and getting ahead of the competitors in business. These, according to Feig (1999), includes the under listed:

Branding: how well the venture does its branding, dictates how competitive the business becomes in competing for a sizeable market share. Appealing brands shall obviously have a comparative advantage as compared to the “unappealing brands”

Distribution: being competitive means being ubiquitous (Feig, 1999). A company whose products seem to be readily available seems to be having a head start in the market. Easily accessed products become very “easy targets” of clients. Accessibility to the products plays a very cardinal role in the management of business competition (Feig, 1999).

Pricing: this, according to Feig (1999), forms the foundation of competing in both the local and external markets. A venture seeking to establish itself in the market must make an entry point through the use of “lucrative pricing (1999).” Lucrative pricing, is a business concept in which the seller is willing to lower the cost of products in order to attract a fair share of the market while retaining the value of the products in terms of quality and quantity. When applied appropriately, this is a sure tool for establishing a niche in the market and getting a vantage position as far as product competition is concerned.

Lowering operational costs: this is the third facet of business growth and development. It involves the shearing of any extrapolated expense that may seek to reduce the profit margins of the company (Gillespie et al, 2007). Operational costs have direct effects in managing all the aspects of the business. This phenomenon transcends all departments. With the current slump in the economies of the globe and relatively high inflation of major economies, the cost of doing business is incessantly trending upwards (Mc Daniel et al, 2005). Recurrent expenditures, cost of production (in case of manufacturing companies) is on a gradual, yet perfect, ascension. In such a scenario, the best business strategy is to seal all the loopholes of having a mini “capital flight” in the company. Proper austerity measures must be instituted to limit the operational costs at the lowest level (Gillespie et al, 2007).

Widening the product portfolio: businesses must continually seek for avenues to bring into the market newer products. Diversification has become a common concept in the current business structure. A case in study is Samsung Electronics Company that has embarked on intensive product diversification over the past decade (Haour,2004). The results are in the affirmative. Research of the market must be enhanced to seek for the products that the market needs (Gillespie et al, 2007).

For global companies, the marketing challenges have been whether to adopt the marketing and operational strategies that befit the local business locus or stick to the main rubric developed initially by the company. Any company seeking to get into a local market must make this analysis for itself depending on several variables (Keegan et al, 2005). If CSR Company, for instance, has a strategy of getting into the African market, would the operational and marketing strategy remain the same as those used in other international markets or there should be “adaptive” strategies where local techniques are applied depending on the market dynamics of the new market? Keegan proposes a varying strategy of doing business but maintaining the brand of the company (2005). Marketing strategies, according to Lavin (2011), must be as rational as can be. The dynamics of the business environment are quite unique to various market destinations. These dynamics invariantly change, they are not static, and this is why strategies must adopt very rational and practical frameworks to advance the goal and objectives of marketing (Kotler & Armstrong ,1991). Currently, the emerging trend in international marketing and branding is referred to as “glocal,” a cocktail of global strategies and the local marketing concepts (Lavin, 2011)

Effective business strategies encompass adept evaluation and assessment strategies (Kotler & Armstrong , 1991). Strategies adopted for the global market must be tethered alongside proper framework that would allow for these strategies to be reviewed (Sadler 2003). It is therefore very important to clearly define the “outcome indicators” and their indices of evaluation. Through this avenue, strategists are capable of “weighing” their decisions against the success indicators and adjust as need may demand.

Depending on the marketing research outcomes, a company seeking to enter into new markets must clearly define its marketing theories in executing its strategies (Drucker & Joseph, 2008). Whether it is game theory, signalling, innovation or market pioneering, the marketing design must be firmly based on objective data from market research (Chalmin, 2008). It is thus significant for an organization to generate the data through a statistical process in order to determine the appropriate theory to apply in the course of advancing the business growth and development (Birkinshaw, 2004)

2.4 Justification of the study

China South Locomotive & Rolling Stock Corporation Limited (CSR) seeks to establish itself as a global brand in the manufacture of locomotives and rolling stock products. The company has been involved in several projects globally especially in the design and production electric trains, refurbishing the passenger coaches and the assembly of rail transit equipment.

Other auxiliary business activities of the company include

· Manufacturing railway locomotive accessories

· Offering consultancy and technical services for rolling stock and for locomotive

· Importation and exportation of metal ware especially those usable in the railway industry

To stamp its authority in the business and cut its niche in the market, CSR Company has embarked on an extensive market research. The growth plan of the company is based on the need to enter into new markets especially in the developing countries where there seems to be emerging demands of its products. Even in this desire to enter the new markets, the company has had to fight off very stiff competition from some of the most established locomotive companies especially from the European block with very solid networks and strong financial background.

This study seeks to explore the strategies that CSR is likely to employ to assert its position as a global brand in the manufacture of locomotives and its affiliate products. The study is set to analyze the growth model that should be used to inspire growth in the company within its growth plans entailed in the strategic management and expansion plans. With the plans of going global in the business of locomotive manufacture and the supplies of rolling stock, CSR must study the dynamics of the decision; the company has to establish if it is in a strong position both financially and strategically to advance into other markets. The study focuses on the matrix of establishing its current position to initiate advancement into other foreign markets. In this respect, the research shall offer an objective and informed analysis of the strengths of the company in entering the new markets and relate it to the weaknesses expected. The analysis of opportunities and threats too shall be analysed in the SWOT analysis matrix to establish these concepts.

The SWOT analysis is expected to inform the decision to institute proper marketing strategies for the company other than evaluating the current status on whether there is a silver lining if it decides to devolve its operations to the other foreign markets. In the same capacity, this study shall focus on evaluating some of the major success factors in the product and services of CSR Company. The study shall dig out the past growth curves of the company using the available reference and analyze the factors that have greatly contributed to the success of the company basing its analysis of the four facets of measuring company growth and development.

CSR’s marketing strategies shall also be put into focus. This paper will focus on the choice of marketing strategy that CSR chooses to implement in the market and analyze the effectiveness of this strategy. This work will seek to know the nature of these studies, the relevance of the market strategy in use by the CSR. The work shall explicate how beneficial or detrimental the marketing strategic plans employed so far. In this respect, the study will be very significant in proposing several other recommendations in as far as marketing of the company products are concerned. This study shall be very much concerned with the critical role of assessing the models of marketing the company products. This analysis, of course, must be based on the business data generated over the past five or so years to be able to accurately establish the effective marketing methods.

Providently, this research shall act as a business intelligence tool for CSR to focus more on the business models that bring more revenue to the firm. The concept of gaining competitive advantage over other organizations is based on riveting resources and energy onto those products that bring in more revenue while instituting firm strategic options to uplift the departments considered to be experiencing slow growth. The concept shall be to view the growth curve of the company but limiting the growth patterns to the individual products to view the company product responsible for higher margins together and the ones that bring lesser returns, through this analysis, the research shall seek to advice accordingly on the course of action to strengthen further the performing sectors and decide on the fate of the non performing products, whether to abandon or strategize further on the same. This shall be addressed by the work

2.5 Application and significance to practice

The significance of this research study to CSR Company shall be very instrumental in forming a base onto which the strategic decisions of the company shall be set on. Having elaborately covered the cornerstones of growth and development of CSR Company, it is expected that all strategic decisions that shall be generated by this work will form an intelligible platform and justification of decisions made in the management of the company for the sole aim of profit maximization.

Taking into account the expansion plans that CSR company has, especially their desire to enter into the markets of the developing world, the recommendations from this discourse would be very fundamental in assisting the management to decide whether to proceed with the expansion or not, and if the procession is agreed upon, what are some of the practical experiences that the company shall expect so that the management is prepared to deal with them even as they come. This is a practical framework how significant this research is. That notwithstanding, the value of the implementation of any statistical based recommendation is quantified and qualified by the accuracy of the data used in the analysis of the situation, this research work is keen on analysing these company data and adduce relevant information that shall be used in the process of decision asking at the management level. This calls for the subjection of the statistic to intense analysis

Staying in the lead in terms of business market domination is a dream for most of the global companies. In the contemporary business society, the conclusion of this work will lead to the generation of new concepts of staying in front of the competitors in the market. CSR railway faces very stiff completion from the China North Locomotive and Rolling industry and needs to fight for its share of the market. Currently, the state owned corporation is ranked as the second largest in terms of asset base and market capitalization. The desire to be a leading brand tops the strategic plans of CSR but the American companies, together with the local China North Locomotive and Rolling Industry have put up spirited efforts to maintain their dominance in the market. With this research, the CSR Company shall be endowed with the tools to edge out its competitors after the analysis of its business environment.

Several global economies are currently working on the expansion of their infrastructural capacity to transport both goods and the citizens faster and in bulk; the investment committed by such countries implies that there is adequate amount of market for CSR railway to tap into. China alone, is said to have committed 66% of its GDP into the railway industry, a considerably market that CSR would capture depending on its business acumen.

Projected market growth

With the current needs in trading in volumes and linkage of nations, the railway seems to be the most convenient transport mode. The projected growth of this sector reveals glaring market opportunities for CSR to exploit. With the adoption of proper strategies of operation, it is projected that the company can realize a marginal growth of 6.2% per year basing the inference on the current growth report which stands at 1.8% per year.

An analysis of the road and transit industry carried out by the world watch institute projects immense growth in the industry. The report asserts that several rail systems are either under construction or are in the planning stages, this means that business environment is “ripe” for CSR railways and its competitors. The report quantifies that 200 rail lines are in the current planning stages across the globe, Europe alone, has designs of extending its network to slightly above 7, 000 miles with 170 systems. Globally, the industry is projected to have $ 8 billion for business by 2015. In this respect, CSR must lay down proper business model to cut a share into the kitty. This must be based on very intelligible strategy and intelligent forecasting to enhance their capacity in landing the existing business deals.

CSR and the local market

Business analysts agree that CSR and CNR are able to meet their growth projections if they fully focus on the local market alone – Chinese railway. But this is not a considerable market segment that the company yearns to occupy. CSR Railway is capable of meeting its revenue target but not the market domination that the company seeks to have, in this respect the focus must move beyond the local Chinese market onto the other markets and expand its operations.

3.0 Research methodology

The research methodology of the study shall take into consideration the sensitivity of the data involved in the project and so shall use intelligible research methods to gather as much data as can be. The relevance of the data shall be verified before the collection for processing to avoid skewed information

3.1 Research design

The study shall employ the use of quantitative research design in analysis of the data collected. The study is a combination of exploratory and explanatory research design based on the company documents and other legal references indicating the financial position of the company and its growth indices. The use of qualitative data shall also form a considerable design in the research especially in the analysis of the market mix of CSR railway and carrying out the SWOT analysis of the company with the desire to establish its expansion potential

The study shall also rely on secondary data observation as a model of collection of the relevant data to be used in the analysis of the company’s growth indices. This however, does not infer that the primary sources of data shall be ignored, the primary sources shall form the foundational source of information onto which the research shall base its findings. Other methods of data collection that shall be used in the research study include the under listed:

· Use of structured Questionnaires: Since the research study involves the analysis of sensitive company data, the basis of this data collection technique shall be to get as much data as possible from reliable sources in the company. As earlier said, the reliability of the data analysed is based on the validity and the consistency of the data got from the respondents. The study shall seek to get very reliable statistical data upon which it shall base its findings. This is justified because it is nearly impossible for the company management to give out the exact company data used in the strategic operations of the business

· Direct interviewing of the relevant company staff

Direct viewing would provide the research with first hand information that would later be used in the decision making process. In cases where the research shall need professional and technical clarification, this technique stands out as an efficient tool for the collection of data. In addition, any need for extra information regarding the company can be sorted if one interviews the company representatives with the relevant data

· Direct observation of relevant company data.

This would be the data collection method with the least significance in this analysis of the CSR railway company. This process involves the direct perusal of the relevant data and phenomena with the purpose of deriving relevant information from them. The study shall strive to get the details of the company management as the sole primary data source. Nevertheless, the research study is expecting that the management will not be willing to divulge all the relevant information owing to the sensitivity of the information. However, for verification purposes, the method provides a very convincing mode of data collection.

The reliability and the validity of the data collected from the field shall be guaranteed in order to get accurate results from the data analysis process. The dependability, transferability and the conformability of the data collected shall be ensured through a rigorous confirmation process and issuance of numerous questionnaires to ensure the validity of the results obtained.

Relevant sampling framework that takes into account the content of the information needed by the research study shall be used. Preferably, the study shall employ purposive sampling methods. However, in the quantitative model, the focus should be stratified sampling of the employees of the company with the focus on the staff hierarchy of the company. Since the study deals with management issues, it is the desire of this work to get responds from across the management divide. This ensures that the content validity of the study is achieved furthering the accuracy of the results of the research.

Data analysis and interpretation

Prominent in the analysis of the findings in the research study, will be the application of marketing mix techniques in the analysis of the data. In addition, the study will employ the use of SWOT model to establish the operational capacity of CSR Railway Company based on the four matrixes. The analysis of the environmental factors affecting the operation of the industry and its impacts on the growth and development of the company shall be subjected to an analysis

3.1Research ethics

Ethical consideration in the research study shall be upheld according to the legal provisions that protect the process of the research and study. Most prominently, the data collection framework shall be based on ethical provision as dictated by the legal precepts. These ethical considerations of the process shall include the under listed

3.1.1 Confidentiality

The foundation of any research process is anchored on the assurance of confidentiality to the respondents. This research study involves the divergence of very protected company data. The protection of the respondent shall be guaranteed through the policy of non disclosure of identity. The questionnaires shall only be for the research purpose and not any other use.

3.2.2 Informed consent of the respondent

Upholding the rights of the respondent in the research process is the work of the researcher. A respondent must give his or her opinion on the research with his full consent. This study, like any other research study, shall uphold this principle of informing the respondents. In addition, all the questionnaires must be clearly disbursed after seeking the consent of the respondent.

3.2.3 Debriefing and additional information

Expectations of the researcher must be communicated to the respondents before the beginning of the research. The debriefing process in the study shall help demarcate boundaries onto which the research study is based. This study shall be invoke this principle of research and clearly use it to remain within the guidelines created by ethical rules in the research process. The significance of the briefing as an ethical consideration in undertaking a research study is based on keeping the respondent aware of the occurrents in the research process

4. Proposed work plan

1. Presentation of the research proposal to the lecturer for approval to continue with the research. The presentation timeline for approval is after 2 weeks effective from 2nd, April. 2014. This would give the research study the green light to proceed with the authority of the supervisor and the lecturer

2. Planning on the research process, data collection methods are analysed after the analysis of the sampling procedures depending on the type of research expected. The timeline for the activity is 4 days. This is effective from the date of the approval of the research proposal by the professor. The planning helps in the budgeting for the whole cost of doing the data collection process

2. Designation of the questionnaires and other data collection tools. An event that shall take a total of seven days from 15th of April, 2014. This shall also coincide with the meeting of the data collection clerks who would be administering the questionnaires to the respondents. Briefing of the clerks shall also be going on and shall take five days cumulatively

3. Actual data collection: this process will see the gathering of the data necessary for the research to proceed. The initial stage begins with seeking for appointments of the various staff both in the management cadre or the other supporting staff to seek for the relevant information required for the research. The second phase is the actual collection of the data needed in the research study

References

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