Globalisation or going global at the moment echoes throughout the land. But very often it is used as flowery phrase: some use it to express their fear of a more and more internationalised and fast changing world, others use it to find excuses why they do not
perform good any more. But the truth behind it is deeper as one could think. Let us have a look at the following quotation: “National champions are a phase-out model”
(Neelie Kroes, European Commissioner for Competition). This phrase stands for itself. Large companies usually have to go international or they can not participate in worldwide emerging or developing markets and can not compete in the long term. If a company is a national niche player it does not have to go international compulsory but if it wants to grow more than it is possible at its home market it has to choose new target markets.
This assignment deals with this more and more important topic of going international and especially with the target market selection using the example of SMA Solar Technology AG (SMA) way of entering the United States solar market.
Table of Contents
1. Introduction
2. Target market selection – a general strategic approach
2.1 Central criteria for the market selection
2.1.1 Market attractiveness
2.1.2 Market risks
2.1.3 Market entry barriers
2.2 Methods of target market selection
2.2.1 Single-level-methods of target market selection
2.2.2 Multi-level-methods of target market selection
3. Procedure of target market selection by SMA AG
3.1 The company – facts and figures as of 2005
3.2 SMAs general domestic market standing in 2005
3.2.1 The company's market position based on a SWOT analysis
3.2.2 Corporate and product readiness for targeted markets
3.3 General forecast of the industry sector globally
3.4 SMAs target market strategy and risk assessment going global
3.4.1 Determination of the company's key success factors abroad
3.4.2 STEP competitive environment analysis for target markets
3.4.3 Strategy implementation by a tailor-made marketing mix
3.5 Critical evaluation of SMA's international strategy as of today
4. Results and Conclusions
Objectives and Topics
This assignment investigates the strategic procedure and methodologies for selecting target markets within the internationalization process, specifically applying these frameworks to the case of SMA Solar Technology AG as it expands into the United States solar market.
- Strategic frameworks for international market selection
- Methodological analysis of market attractiveness and risk assessment
- Case study of SMA Solar Technology AG's domestic market standing
- Evaluation of the U.S. solar market using SWOT and STEP analysis
- Implementation of international marketing mix strategies
Excerpt from the book
2.1.1 Market attractiveness
Kutschker and Schmid mention that the market attractiveness describes in general the benefit potentials of a certain market (2005, p. 928). They categorise market attractiveness in different sub-criteria which are listed below:
- Market volume, growth and structure
- price structure,
- cost situation,
- procurement situation and
- infrastructure.
It is not possible to call a market attractive in general because each company has different demands and targets which determine whether the market is attractive or not.
Therefore it is necessary not only to use one criterion but to combine different ones to analyse the overall attractiveness in a multidimensional way (Kutschker and Schmid 2005, p. 929). After analysing the attractiveness a company has a first hint whether it could enter the market with a good return on its investment or not. But a good attractiveness alone does not mean a good opportunity at all because there are also risks which could jeopardise the market entry. Having said this, we want to have a short look at different risks at foreign markets.
Summary of Chapters
1. Introduction: This chapter defines the scope of the assignment, focusing on the importance of systematic target market selection for global expansion and outlining the research methodology.
2. Target market selection – a general strategic approach: This section provides a theoretical framework for market selection, detailing central criteria like attractiveness, risks, and entry barriers, alongside various analytical methods.
3. Procedure of target market selection by SMA AG: This chapter conducts an in-depth practical analysis of SMA AG, evaluating the company's internal strengths and external environmental factors when entering the U.S. market.
4. Results and Conclusions: This chapter synthesizes the theoretical and practical findings, confirming that a systematic approach is essential for successful internationalization and provides a positive recommendation for SMA's continued investment in the U.S.
Keywords
Target Market Selection, SMA Solar Technology AG, Internationalization, Market Attractiveness, Market Risks, Market Entry Barriers, SWOT Analysis, STEP Analysis, Photovoltaic Industry, Marketing Mix, U.S. Solar Market, Strategic Management, Global Strategy, Investment Decision, Renewable Energy
Frequently Asked Questions
What is the core focus of this assignment?
The assignment focuses on the procedures and methodologies companies use to select international target markets and assess associated risks, demonstrated through the real-world example of SMA AG.
What are the primary thematic areas covered?
The core themes include strategic market selection frameworks, internal and external corporate analysis (SWOT/STEP), and the implementation of specific marketing strategies for international entry.
What is the main objective of this study?
The objective is to provide a comprehensive overview of actual market selection methods and to illustrate these practices by analyzing how SMA AG prepares for and executes its entry into the U.S. solar market.
Which scientific methods are utilized in this work?
The research combines a literature-based theoretical analysis of international management concepts with a practical case study based on industry sources, governmental economic data, and corporate reporting from SMA AG.
What topics are discussed in the main part?
The main part covers the theoretical criteria for selecting markets (attractiveness, risk, barriers), the application of these criteria to SMA AG's business model, and a detailed SWOT and STEP analysis regarding the U.S. market environment.
Which keywords characterize this paper?
Key terms include Target Market Selection, Strategic Management, Photovoltaic Industry, SMA AG, Internationalization, and SWOT/STEP Analysis.
How does the SWOT analysis reflect SMA's current situation in the case study?
The SWOT analysis highlights SMA's technological leadership and strong product portfolio as strengths, while identifying dependency on German subsidies and the challenges of the U.S. financial crisis as significant risks and weaknesses.
What is the conclusion regarding SMA's international strategy?
The authors conclude that SMA's systematic approach and commitment to the U.S. market are well-founded, recommending continued investment despite the risks associated with global economic fluctuations and competitive pressures.
- Arbeit zitieren
- Michael Kemmer (Autor:in), Torsten Ehnert (Autor:in), 2010, Procedure and methods of target market selection and risk assessment on the example of SMA AG, München, GRIN Verlag, https://www.grin.com/document/197107
