View from The Blueridge

Executive Summary

A tablet computer is a portable computer with a touch screen LCD and a virtual keyboard. Because of its resemblance to a mobile phone, this device is sometimes known as a mobile computer. However, the device has all of the basic computer functions, including as internet connectivity, an office suite, and entertainment options. With the aforementioned product, Supernova ltd., a German company, plans to join the Australian market. Consumers in Australia are eager to try new and creative goods, therefore there is a lot of potential for the product to succeed.

The primary goal of the research is to determine how much demand for this product exists in Australia, as well as to learn about customer acceptance of new and creative goods. The research will look at Porter’s Five Forces in connection to the electronic computer industry in Australia, in addition to assessing consumer requirements and wants. The research will also highlight the cultural differences between the two countries, based on Hofstede’s cultural dimension model.

The primary conclusion of the study is that tablet computers are in high demand in Australia, with some forecasting groups projecting that sales would skyrocket in the next years.

Table of Contents

• Threat of new Entrants
  • Economies of Scale
  • Brand Loyalty
  • Capital Requirement
  • Analysis
• Threat of substitutes products
  • Switching Cost
  • Buyer Loyalty
  • Analysis
• Bargaining power of buyers
  • Number of customers in the market
  • Availability of Substitutes
  • Analysis
• Bargaining Power of Suppliers
  • Degree of supplier concentration
  • Availability of substitute inputs
  • Analysis
• Existing Rivalry
  • Industry growth rate
  • Demand for product
  • Analysis
• Recommendations
• Hofstede’s cultural dimension
  • Cultural dimensions of Australia and Germany
  • Difference between two cultures
  • Recommendation
• Conclusion
• Reference

Threat of New Entrants

Companies that are currently not competing in a particular sector but have the potential to participate if they chose to do so are referred to as new entrants.

Economies of Scale

Economies of scale refer to the reduction in unit cost of manufacturing when a business expands its production capacity. Cost reduction via mass manufacturing is one of the causes. b) A discount was obtained by purchasing in quantity. b) Spreading fixed manufacturing costs across a larger volume of output. d) The same cost of advertising for a high volume of manufacturing. 1 As a result, Supernova Limited may opt for large-scale manufacturing to get a cost advantage, but they can do a pilot test or test marketing before making a choice.

Brand Loyalty

When customers are more attracted towards the goods of the industry’s established companies, they are displaying brand loyalty. 2By utilizing powerful advertising, excellent product quality, and offering after-sales support, businesses may build brand loyalty. According to a recent research, Australians do not pay a premium for brand names, preferring instead to choose cheaper brands that provide excellent value for their money. As a result, Supernova Limited must sustain client loyalty by keeping a consistent pricing level while also meeting consumer requirements.

1.  Gareth Jones and Charles Hill, Strategic Management Theory: An Integrated Approach (US: Cengage Learning, 2009), 44.
2. William M. Pride and O.C. Ferrell, Marketing (US: Cengage Learning, 2011), 400.

Capital Requirement

Capital requirement is the amount needed for the cost of production and considering the fact that the firm is a new entrant in the market, the total cost will also include the whole set up of the company to start its operation. The entire set up will include manufacturing in the factory, raw materials, labor charges and all other variable cost. Since the company does not have any restrictions in the financial segment they can undertake all the required operations.

Analysis

Since the company does not have any restriction in the financial segment they can go for large scale production but a small pilot test must be conducted in order to analyze its acceptance in the market. Now the most important factor is that Australians are not at all brand loyal they always move towards cheaper brands, therefore in this situation supernova ltd. must follow a penetration pricing strategy to get the initial market share. With the given favorable conditions and sound financial stability threat of new entrants in the market is high.

Threat of Substitutes Products

Substitute goods are distinguished by the availability of products from the same category that fulfill the same function as the original. ³There is no direct substitutes of electronic tablets in Australia. But there are substitutes which are having small differences in the features of the product. The substitutes which have been identified are I-pad by Apple, smart phones, mini Laptops by different companies such as Samsung, Lenovo and other market players and electronic reader by Amazon’s Kindle.

3. Daniel Roy, Strategic Foresight and Porter’s Five Forces: Towards a synthesis (Munich: GRIN Verlag, 2011

Switching Cost

Switching cost is the cost which is borne by customers in the form of time, energy and money.⁴ In other words the cost one has to bear when somebody switches from using a product of the established company to the product of another company in the market. The customers get locked to the existing company when the switching cost is high. In this case electronic tablets and the other substitutes, the price difference is small. And with the availability of big brands in the substitute segment it will merely cost the customers any loss of time or energy.

Buyer Loyalty

Buyer’s loyalty is the measurement of how a buyer is faithful towards a brand.⁵Given that Australians preferred to move towards the low priced products with high product value, they can easily accept or try new forms of electronic tablets such as smart phones or I-pads. Their enthusiasm for trying new gadgets will always be high as they are considered technical savvy.

Analysis

With the intention of Australian consumers it can be easily stated that it will be easy for them to switch from one product to other substitute forms such as smart phones, I-pads or mini laptops. The additional factor is that the price difference between the substitute and existing product is also less. Therefore it can be concluded that the threat of substitutes is high.

4. Gareth R. Jones and Charles W. L. Hill, Essentials of Strategic Management (US:

5. Cengage Learning, 2011), 48.

6. Bill Carey and Chantal Howel- Carey, Make Money As a Buyer’s Agent: Double Your Commissions by Working With Real Estate Buyers (US: John Wiley and Sons, 2007), 173.

Bargaining Power of Buyers

The capacity of customers to negotiate and lower the price of a commodity or raise the cost of a business by demanding higher quality goods and services is referred to as bargaining power of the buyer.⁶ Bargaining power depends on how quickly the buyer identifies other sources.⁷ Now the main target customers for this product in Australia will be technical savvy persons and business managers. The lighter version with low cost can be targeted to student groups as well. Apart from these segments there can also be an alternative customer base which can be higher income group. They will purchase it for their satisfaction and to showcase the status in the society.

Number of Customers in the Market

This section is about the demand for the product in domestic market. In a study recently conducted by ‘tel-syte’ it has been observed that there is a huge demand for tablet pc’s in Australian domestic market. There were almost double numbers of tablets sold in Australia in 2011 compared to the preceding year. Marketers have also predicted that the sales volume will increase in the years to come.

Availability of Substitutes

Availability of substitutes in this context refers to the availability of substitute consumers. The product is mainly intended for retail customers. But apart from retail customers there are business clients. Therefore rigorous marketing in the in business to business segment will certainly give a competitive advantage to Supernova Ltd. Institutional clients can also be approached for the generating trade.

7. Gareth R. Jones and Charles W. L. Hill, Strategic Management Theory: An Integrated Approach (US: Cengage Learning, 2009), 64.

8. Businessmate. What are Michael Porter’s 5 forces. http://www.businessmate.org/Article.php?ArtikelId=9.

Analysis

Australians are very much reactive to the price change of a product. Similarly they are inclined towards the value of a product. They believe in having low cost and high product values. Therefore it can be clearly affirmed that with the availability of fewer competitors in the market the bargaining power of the consumers are medium.

Bargaining Power of Suppliers

Other companies that supply raw materials, services, and occasionally even personnel to the host company are known as suppliers. Bargaining power refers to a supplier’s capacity to raise the price of raw materials or lower the quality of products and services by providing poor quality materials at a cheap price.⁸ The primary raw materials for the electronic tablets includes LCD screens, touch screen film, fan-less motherboard, flash memory, battery and other technical requirements include wires, capacitors, connectors, resistor, switches etc. The suppliers of such material in Australian market include Lacie, Mesostate LCD industries ltd, techbuy Australia and 3M Australia among many others. Apart from the domestic suppliers there are also availability of raw materials through online purchase from websites like alibaba, global source, techbuy and deals direct to consider a few.

Degree of Supplier Concentration

The number of suppliers of raw materials for manufacturing an electronic tablet computer is relatively large. The exact number of suppliers cannot be calculated but it there are several numbers. They are not exactly from the same location but scattered in different parts of Australia such as New South Wales, Sydney, Adelaide, Victoria and Canberra.

Availability of Substitute Inputs

Availability of substitute input refers to the presence of other raw materials by which an electronic tablet computer can be manufactured. But in this case such application is not possible.

9. Mike W. Peng, Global Strategy (US: Cengage Learning, 2008), 41.

Analysis

Considering the fact that there is availability of a large number of suppliers of raw material for the manufacturing of electronic tablets, the bargaining powers of the suppliers are relatively low.

Existing Rivalry

This force reflects the competition within the industry.⁹ Rivalry among industry is about the intensity of competition among the organizations of the electronic tablet computer industry. The competitors also manufacture the same kind of product to sell in the market. Competitors within this industry are Samsung, Apple, HTC, Dell, Asus, Toshiba, Acer, Pandigital etc.

Industry Growth Rate

According to a marketing research firm in Australia there were more than 1.4 million tablets sold all over the country. They are predicting that within 2012 the sales volume will touch 2 million and the most encouraging data provided by them is that within 2016 there will be 5 million tablets sold i.e. half of the population of Australia will be using tablet pc. The industry growth rate is calculated to a mammoth 330% per annum.

Demand for Product

The nation is seen as a potential market for tablet computer manufacturers. With the industry’s strong growth rate, it’s clear that there’s a lot of demand for the goods in Australia. Tablet computers have been hailed as a game-changing device in the electronics industry. The tablet PC market in Australia is projected to expand exponentially with growing adoption of the product, according to ‘Australia tablet PC and market forecast opportunities, 2016’. Most significantly, it succeeds admirably in bridging the gap between a smartphone and a laptop computer. Another reason for success is that Australia has a high number of internet users, and this program is well supported by a tablet and a computer.

10. Porters Five Forces. Rivalry among existing firms in the industry. http://www.portersfiveforces.org/rivalry-among-existing-firms-in-the-industry/

Analysis

There are several tablet producers in Australia, as well as alternative goods like as smart phones and small computers. As a result, it is obvious that there is fierce rivalry within the sector.

Recommendations

After conducting the analysis of porters five forces in the Australian market the following are the findings:-

• Threat of new entrants in the market is high.
• Threat of substitute products is also on the higher side.
• The bargaining powers of the customers are medium.
• The bargaining powers of the suppliers are low.
• The competition among the industry is also high.

Based on the above findings the following recommendation can be drawn:-

• The company must enter the Australian market with penetration pricing strategy, considering the fact that Australian consumers prefer brands that offer low price but gives good value of the product. They must also use product differentiation in the form of some extra flash memory or a preloaded useful application like YouTube downloader, face- book, twitter and online share trading software.
• The second recommendation is that the company before going for a large scale production must go for a small scale venture by conducting a pilot test of test marketing. This will give them an idea of the acceptance of the product.
• The company must develop its advertising campaign keeping in mind the Australian culture and some catchy taglines which may help in grabbing customer attention.
• Higher-income groups, businesspeople, technology-savvy individuals, and a lighter version for students should all be prioritized.

In order to have more insights of the electronic tablet industry and also to have an internal assessment a SWOT analysis is also conducted to know the Strengths, Weakness, opportunities and threats of the company. The analysis is shown below:-

Hofstede’s Cultural Dimension

Cultural Dimensions of Australia and Germany

Greet Hofstede has proposed a systematic process for distinguishing the national cultures of different countries with respect to the organizational culture. The theory is known as cultural dimension theory. The theory is a bit complex but still it is widely used.¹⁰ The dimensions identified by Greet Hofstede in his theory include Power distance index, Individualism vs. collectivism, uncertainty avoidance index, quality vs. quantity of life and time orientation.¹¹  

                                                         (Source: Author’s Creation)

11. Ralph Johann, Cross-Cultural Management: The Case of the DaimlerChrysler Merger. (Munich: GRIN Verlag, 2008), 5.

 12. Businessmate. What are Geert Hofstede’s 5 Cultural Dimensions. http://www.businessmate.org/Article.php?ArtikelId=4.

Graphically it is shown below:-

                            (Source: http://geert-hofstede.com/australia.html)

Difference Between Two Cultures

It can be easily identified that the cultural difference based on Hofstede cultural dimension between Australia and Germany is very less or negligible, apart from the fact that there is a small amount of difference between the two countries in dimension of uncertainty avoidance index. The Australians are more practical thinkers than the Germans.

 Recommendation

With the exception of the uncertainty avoidance rating, there is virtually little variation in culture between the two nations. In Australia there is a need of both generalist as well as experts. This factor can be overcome by the use of proper planning.

Conclusion

The research has been conducted to know about the Australian consumers, suppliers, their culture and also their take on the new innovative technologies and products such as electronic tablet computers. The research tools which are used in the process include Porter’s five forces and Hofstede’s cultural dimension model. After going through all the research processes the following are the findings:-

13. Geert Hofstede. What about Australia. http://geert-hofstede.com/australia.html.

• In Australian electronic tablet industry there is a healthy competition among the market players. There is also availability of substitute products in the form of smart phones and mini laptops which also gives a stiff competition. Customers’ negotiating power is restricted since they only have a few options to choose from. While on the other hand the bargaining power of suppliers is low because there is many suppliers of raw-materials are already present in the industry. Apart from this the threat of a new entrant in this market is also on the higher side, as the industry offers favorable conditions. Therefore it is highly recommended that companies must have tight entry barriers.
• By analyzing the cultures dimensions of two countries, it has been observed that there is a small cultural difference in the country in the form of uncertainty avoidance. Australians are very much practical in this scenario than the Germans.    

 After doing all the analysis of the given factors it can be stated that Supernova Ltd. can easily enter the Australian market with their product. But there are some preventive measures that need to be adopted such as to observe cautiously the price fluctuations in the industry and accordingly adjust the price. With the advantage of having negligible cultural differences of two countries the business may become well established in Australia.

Reference

• Businessmate. What are Geert Hofstede’s 5 Cultural Dimensions. http://www.businessmate.org/Article.php?ArtikelId=4.
• Carey, Bill. And Chantal H. Carey. Make Money As a Buyer’s Agent: Double Your Commissions by Working With Real Estate Buyers. US: John Wiley and Sons, 2007.
• Ferrell. O. C. and William M. Pride. Marketing. US: Cengage Learning, 2011.
• Geert Hofstede. What about Australia. http://geert-hofstede.com/australia.html.
• Geert Hofstede. What about Germany. http://geert-hofstede.com/germany.html.
• Johann, Ralph. Cross-Cultural Management: The Case of the DaimlerChrysler Merger. Munich: GRIN Verlag, 2008.
• Jones, Gareth R. and Charles W. L. Hill. Essentials of Strategic Management. US: Cengage Learning, 2011.
• Jones, Gareth. And Charles Hill. Strategic Management Theory: An Integrated Approach. US: Cengage Learning, 2009.
• Peng, Mike W. Global Strategy. US: Cengage Learning, 2008.
• Porters Five Forces. Rivalry among existing firms in the industry. http://www.portersfiveforces.org/rivalry-among-existing-firms-in-the-industry/.
• Businessmate. What are Michael Porter’s 5 forces. http://www.businessmate.org/Article.php?ArtikelId=9.
• Roy, Daniel. Strategic Foresight and Porter’s Five Forces: Towards a Synthesis. Munich: GRIN Verlag, 2011.

1. Introduction

The methodology part of the study tries to pinpoint the procedure or set of actions used at each stage of the investigation to arrive at the research’s results and conclusions. Kothari (2004) defines research methodology as “a way to systematically solve the research problem”. He further opines that research methodology may be comprehended as “a science of studying how research is done scientifically” (Kothari, 2004).

Thus the research methodology for the present study would include the data collection methods which would entail the description of the collection of primary as well as secondary data as well as the reason for doing so; the research design which refers to the inductive and deductive reasoning methods along with the qualitative and quantitative techniques for the purpose of the study. The instrument of data collection would also be derived in this section by the help of which the data has been collected – be it an interview, or a questionnaire or a focus group study. Again, the sample selection is the next activity to be undertaken since the data has to be collected from the respondents for further probing. Thus the sample has to be selected depending on various factors like nature of study, intended results, convenience, paucity of time and funds etc. Once the data has been collected the data is analysed with the help of various tools and techniques. Ideally, the step of data analysis consists of the ways in which the data would be put to test so as to derive the intended results. The tools of data analysis may be software or manual. In this case, SPSS would be used to analyse the data with the help of various tests predetermined by the researcher. Lastly, the ethical considerations that the researcher has to keep in mind while working with the sample population would be enumerated followed by a summary of the section.

2. Data Collection Methods

Primary Research

When a study is performed to reveal original data, it is known as primary research. To do this a new research plan has to be created which consists of collection of data, input of data and ultimately the production as well as analysis of the ensuing results.

Whereas “Original data performed by individual researchers or organizations to meet specific objectives is called primary data” (Schiffman & Kanuk, 2007).

The major advantage to primary research is that the data collected for the study is solely meant for that very study and thus much more precise and “reliable” as well (Das, 2005).

Primary data exhibit comprehensive information and an explanation of the terms mentioned. The method of collection and approximations, if there are any, are detailed in this case (DJS Research, 2005).

But the main drawback is that the procedure may be that it might prove to be highly time consuming and an expensive affair.

Secondary Research

Secondary Research is the research conducted on the basis of the “data that has been previously collected by some agency or person for some purpose and are merely compiled from that source for use in a different connection”. So, data collected by someone else when utilised by another person, is called secondary data as well. Primary data transforms into secondary data when the person who has collected the data uses the already collected data by him/her for some other reason other than for the reason it was originally collected (Roy Choudhury & Bhattacharya, 2006).

Secondary research is generally beneficial when the researcher has time constraint or financial constraints. The investigator is unable to directly collect the data and also when absolute accurateness is not mandatory.

In the case of the present study, the data collected by other researchers as well as the quantitative and also the qualitative approaches have to be overviewed so as to have added knowledge on the area.

In the context of the present study, secondary data will also serve the purpose to some extent – especially while assessing the available literature to reinforce that the present study is not a rather stand alone study on the subject that has yielded the results but available literature also focuses on and has reference to similar topics or has much to offer on the topic of the present study. It will also help them assess industry figures and the like.

3. Research Design

A research design refers to coming up with the most efficient plan of collecting the information needed for the research (Kumar, 2008). A research design also describes the specification of methods and processes for collecting the information needed. It is the framework for performing the study. Since the research objectives and questions have been formulated, so the research design is to be prepared subsequently (Gupta & Gupta, 2011).

Among the approaches taken in the course of the study, the reasoning based approaches will lend more credibility as to why the courses of action have been in a certain format.

Inductive Reasoning

Taylor, Sinha and Ghoshal (2006) have noted that inductive reasoning is “a process that begins with a specific case and draws from it a conclusion of wider or more general reference”.

Deductive Reasoning

Ghauri and Gronhaug (2002) define deductive reasoning as an approach wherein it is a logical process of deriving a conclusion from a known premise or something known as true.

Again, for the purpose of the study, a combination of quantitative as well as qualitative approaches has been taken. While the qualitative approach consists of scaling technique in terms of letting the respondents choose only one answer for the questions given within the questionnaire, the quantitative approaches, on the other hand, would comprise specific tools like correlation.

Correlation

Correlation, as noted by Wild and Diggines (2009), refers to methods that deal with simultaneous occurrences in variables.

4. The Instrument for Data Collection

The instrument of data collection chosen is a questionnaire.

Questionnaire

“Questionnaire, whether it is called a schedule, interview form, or measuring instrument, is a formalized set of questions for obtaining information from respondents.” (Malhotra, 2004). Normally, a questionnaire is a type of a package used for collection of data that may also comprise other things.

Interview

Interview is an instrument of data collection wherein the researcher interviews the respondent in person to gather the required information. Again, the success of this method depends on the merits of the interviewer since he or she may also note other non verbal reactions of the respondents. However, any bias should be avoided while making such judgments. Also, this is time consuming and costly for research.

In the context of the present study, a survey Questionnaire seems to be the best way to collect information. Since the present study entails gathering information on aspects that are highly qualitative in nature, so, Questionnaire has been used as an instrument. Focus group has been avoided due to paucity of time and other allied resources. On the other hand, the Questionnaire would enable the present study to hand over the same to the prospective respondents so that they can come up with their versions of answers for the questions at their convenient time.

The questionnaire open ended questions, i.e. the answers have to be given by the respondents in their own words. The Questionnaire has been devised in this manner since focus group interviews are not possible and neither is complete enumeration is feasible, so in order to better comprehend the various processes entailed in the study, it seems better to collect answers in the own language of the respondents. The open ended questions would serve to enlighten the study the particularities of the experiences as well as the difficulties faced by the respondents in the light of the context of the present study. Moreover, this may help to suffice the lack of focus group interviews and other in depth qualitative techniques associated with data collection. Also, since the study is related to motives of individuals, so it is best to go for open ended questions.

5. Sample Selection

Target population for the primary data comprised the general aspirants of the Air Force Officer Qualifying Test (AFOQT).

For secondary data both internal and external sources has been used. The secondary sources stem majorly from the reports, books available in libraries as well as in the market, journals and other publications that focus on same or similar topics as the present study is based.

The questionnaire would be mailed to the respondents electronically since the study focuses on Air Force Officer Qualifying Test (AFOQT), given that the respondents are in dispersed geographical locations, so the best format seems to be to use the same channel of information sharing. However, a low rate of response may be a drawback compared to personal communication. A total of 100 people were chosen to participate in the research, since the rate of response, as mentioned before, has been apprehended to be low, given that the questionnaire has been mailed to the responders electronically.

6. Data Analysis

Sampling Technique

Due to its inherent simplicity as well as the time constraints for the completion of the research, “Non Probability Judgmental Sampling Technique” would be used for the study.

Non-probability sampling is a sampling method that is not based on probability wherein the probability of selection of each sampling unit is not known (Aggarwal, 2010).

Measurement Tool to be Used

Aptitude Test

Aptitude tests provide a high level of predictive validity (Hardison, Sims & Wong, 2010). The authors have noted that the aptitude based models like AFOQT offer a high level of unbiased as well as effective way of mapping the life experiences of the candidates as well as measure scores that tally with how good or badly is a student likely to fare on the job for which the test is being taken (Hardison, Sims & Wong, 2010).

Predictive Validity

Elmes, Kantowitz and Roediger (2006) have noted that predictive validity relates one measure of behavior to another criterion measure. The connection between selection test results and future performance on the specified job given to the applicant, on the other hand, is known as predictive validity of a selection test (Hardison, Sims & Wong, 2010). Thus it is clear that the score taken on the basis of the performance of the candidate on the job is later correlated with that of the test score in order to find that the predictive validity of the test holds good or not.

7. Summary

The current research focuses on the Air Force Officer Qualifying Test (AFOQT) and those who want to take it. Thus the research methodology adopted for the research has been tailored to suit the specific requirements. While stress has been given on both quantitative and qualitative approaches, inductive reasoning has also been undertaken. A survey questionnaire has been devised to be sent to responders, comprising questions on gaining insights on Air Force Officer Qualifying Test and also the aspirants who want to become Air Force Officers in course of time.

References

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• Das, N. (2005). Statistical Methods. Calcutta: M. Das & Co.
• DJS Research Ltd. (2005), What is Primary Research?, retrieved on December 15, 2010, from http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=802
• Roy Choudhury, S. & Bhattacharya, D. (2006). Statistical Methods. Kolkata: U.N. Dhur & Sons
• Malhotra, N. (2004). Marketing Research – An Applied Orientation. Delhi: Pearson
• Aggarwal, B. (2010). Business Statistics. New Delhi: Ane Books
• Elmes, D., Kantowitz, B. & Reodiger, H. (2006). Research Methods in Psychology. CA: Wadsworth Cengage Learning
• Hardison, C., Sims, C. & Wong, E. (2010). The Air Force Officer Qualifying Test: Validity, Fairness, and Bias. CA: Rand Corporation
• Wild, J. & Diggines, C. (2009). Marketing Research. Cape Town: Juta & Co. Ltd.