ContentsI.Introduction (2)II.Discussion (2)1 Why is the company comsidering entering internationalmarkets (2)2 Secondary sources of information (3)3 The key opportunities and threats (4)4 The process of Spain market assessment (5)5 The modes of market (10)6 Why select this mode (11)III.Conclusion (11)IV.References (11)Report on PK ElectricsI.IntroductionPK Electrics was set up in 1987 in Ningbo, Zhejiang province, China. The company products cables, sockets, switches and light fittings and currently operating three factories all based in Zhejiang province. Over the years the organisation has developed a good reputation for quality and customer service. But over the last two years the rate of growth has begun to decline with sales rising 5% and profits by 2% last year. The management team are aware of big changes in international trading that have occurred over the last 10-15 years with the Chinese economy becoming more market-based and the more recent impact of China joining the World Trade Organisation in December 2001.II.Discussion1 Why is the company comsidering entering international markets•Market saturation•Market-related factors•Production-related factors•Personnel-related factors•Risk-related factors•Cost-related factors•Product life cycleIn the case, PK Electrics is part of market saturation. With rising economic growthand the rising disposable incomes, especially of the urban population PK Electrics has seen demand for its products grow as people seek improvements to their homes and living standards.2 Secondary sources of informationPK Electrics enter Spain market. But the company need to consult information about Spain market. The company could consult from the following professional organization:♦The World Trade OrganisationPK Electrics could get commercial information about Spain:•Goods schedules and tariff data•Services schedules and MFN exemptions•Trade Policy Reviews of Spain•Dispute cases involving Spain•DDA negotiating documents from or mentioning Spain(WORLD TRADE ORGANISATION, 06/18/2011)♦The World BankPK Electrics could get commercial information about Spain:•Income level•Economic policy and external debt•Infrastructure•Labor & social protection•Private sector – merchandise trade(THE WORLD BANK, 06/18/2011)3 The key opportunities and threatsPK Electrics has to understand PEST if it enter Spain market.♦Political:•Spain is a higher score signifies a less violent and politically more stable society.•the government introduced austerity reforms aimed at reducing the fiscal deficit to sustainable levels that reduced government employees' salaries,froze pension funds, and suspended public works.♦Economic:•interest rate stands at 1.00 percent•Spain Gross Domestic Product is worth 1460 billion dollars or 2.35% of the world economy, according to the World Bank. From 1960 until 2009,Spain's average Gross Domestic Product was 402.19 billion dollars reachingan historical high of 1604.24 billion dollars in December of 2008 and arecord low of 12.07 billion dollars in December of 1960.♦Sociocultural:•There are few elderlyies and they have small pensions in Sapin.•In daily consumption, Spanish larger demand.♦Technological:•Spain has defines its scientific and technological priorities focusing on not only its domestic needs but also the Community's ones.•Spain's technology enters the information age.(TRADING ECONOMIC, 06/19/2011)Then, PK Electrics may meet opportunity and threaten.♦Opportunity:•In daily consumption, Spanish larger demand. PK Electrics product all kinds of electrical items. The company can meet Spanish larger demand.•Spain is a higher score signifies a less violent and politically more stable society. It could offer PK Electrics a stable market.♦Threaten:•In the Spain, there are a lot of such PK Electrics. There are many competitors.•Spainish life habits have different from Chinese. PK Electrics spend much time on marketing research.4 The process of Spain market assessmentThis is PK Electrics the process of Spain market assessment:(Source: Mulbacher et al, International Marketing1999 International Thomson Business Press, London.)Stage 1: Corporate policyThe organisation had focused predominantly on the trade market. The management team are aware of big changes in international trading that have occurred over the last 10-15 years with the Chinese economy becoming more market-based and the more recent impact of China joining the World Trade Organisation in December 2001. They have recently met with Trade delegations from several different countries and are now looking outside China for new markets to enhance their growth and business performance.Stage 2: Market assessment criteriaThe measure of the market with customers and national policy related. Market criterias:•Income level•GDP•Population•Poverty headcount ratio at national poverty lineStage 3: Potential country marketsIn the beginning, there are two countries market: Spain and South Africa. In the Question 3, Spain PEST have been analysed. Next, South Africa PEST analysis:♦Political:The political arena has a huge influence upon the regulation of health care, the money available, the priorities for disease management. The market is not stable. PK Electrics consider issues such as:•ecological/environmental issues•current legislation home market•future legislation•SADC/international legislation•regulatory bodies and processes♦Economic:Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. PK Electrics need to look at:•home economy situation•home economy trends•overseas economies and trends•general taxation issues•taxation specific to product/services•market and trade cycles♦Sociocultural:The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:•lifestyle trends•demographics•consumer attitudes and opinions•media views•law changes affecting social factors•brand, company, technology image♦Technological:Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:•competing technology development•research funding•associated/dependent technologies•replacement technology/solutions•maturity of technology•manufacturing maturity and capacity(Wiki dot, 06/19/2011)Market criterias:•Income level: High income(Spain), Upper middle income(South Africa)•GDP: $1,460,250,360,148 in 2009(Spain), $285,365,879,676 in 2009(South Africa)•Population: 45,957,671 in 2009(Spain), 49,320,150 in 2009(South Africa)(THE WORLD BANK, 06/19/2011)Stage 4: Conditions (not) fulfilledThrough market criterias and PEST analyse, Spain’s conditions are fulfilled because Spain could offer a stable market. South Africa could not.Stage 5: Local products and Stop assessmentsAt first, stop South Africa assessments. The company must know local products. Local products has FAGOR, BERONOR, MATHIUS, ect.Stage 6: Success factors♦TechnologyThe company want to take in Spain market, and it have the strong technical support.♦Customer CareCustomers are god. The organisation have to develop a good reputation for customer service. This way of the enterprise for a long time.♦PromotionBecause the company is a foreign enterprise, it must increase the strength of promotion. Although initial cost greatly, it could bring long-term interests to the company.Stage 7: Distinctive competenciesPK’s products are selectively distributed using specialist electrical retailers, department stores and more recently DIY outlets.5 The modes of market(SQA, August 2005, International Marketing: An Introduction)PK Electrics should entry the mode is direct exports.6 Why select this mode♦Total controlDirect export of its products offers a company greater control over the entire export transaction and entitles them to greater benefits.♦Direct contact with customersDirect export could face to face customers. PK Electrics can better understand the needs of customers.♦ A sales representative plays the role of the manufacturer's representativeHe works on a commission basis. He uses the product manual and samples of the product, which he presents to the prospective buyers and entices them to purchase it. However, unlike an agent, who is entitled to take decisions on behalf of his company, a representative has no authority, and he takes no risk or responsibility of the product.III.C onclusionPK Electrics entry Spain market, which could increase profit.IV.References“Spain and the WTO”, (11/30/2009), (WORLD TRADE ORGANIZATION), Available: /english/thewto_e/countries_e/spain_e.htm(Accessed: 06/18/2011).“Data of Spain”, (12/31/2009), (THE WORLD BANK), Available: /country/Spain (Accessed: 06/18/2011).“SPAIN GROSS DOMESTIC PRODUCT”, (12/31/2010), (THE WORLD BANK), Available: /spain/gdp (Accessed: 06/19/2011).“PEST Analysis”, (05/12/2007 at 20:19), (Wiki dot), Available: /pest-analysis (Accessed: 06/19/2011).“Data of South Africa”, (12/31/2009), (THE WORLD BANK), Available: /country/Spain (Accessed: 06/19/2011).Scottish Qualifications Authority (August 2005), International Marketing: An Introduction, China Modern Economic Publishing House, Beijing.。