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GLO-BUS: Regional Competitive Advantage Essay

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Updated: May 14th, 2021

Introduction

GLO-BUS is a company that experiences struggles in the drone market, and relevant changes to improve the company’s performance have to be introduced to overcome the competitors. This paper will define specific numerical modifications that have to be made in each region to gain a competitive advantage and become one of the market leaders.

North America

When addressing the situation in North America, the company can change its location in the positioning chart and become closer to the competitors D and H. Consequently, the enterprise has to maintain its reputation at the existent level (94) while it has to focus on B2C (Business-to-Consumer) advertising campaigns such as social media and interactive website. The current price-to-quality ratio (3.1/5.0) has to be improved while aiming at a benchmark of 4.0/5.0 and higher. Apart from using marketing as one of the instruments to increase customer satisfaction, it is essential to reduce the number of models.

In this instance, diminishing the number from five to four will make advertising efforts more effective while having a positive impact on market share and customer base. A combination of these factors will offer an opportunity to increase price levels and cause a positive shift in revenue per unit. Consequently, elevating prices up to $1,550 ($230 higher) will position the company close to competitors K, D, and H. As for retailers, the discount has to be decreased from 27% to 14.5%, and the marketing spending ($5,000) and warranty period (360 days) have to remain the same. The discount will be reasonable to decrease due to the enlarged market share associated with a combination of B2B (Business-to-Business) and B2C promotion strategies. As for marketing, the expenditure will remain the same, but its effectiveness can be enhanced with the help of content advertising, social media marketing, and interactive website.

Europe-Africa

Similarly to the situation in North America, the company has to focus on enhancing the price-to-quality ratio (4.2/5.0) in Europe-Africa. This goal can be reached with the help of different advertising methods such as content marketing and social media, as they are discovered as the most effective ones to increase the recognition in the B2C segment. Consequently, marketing expenditure will remain the same, but it can also be reduced to $4,000 if possible. However, to ensure its effectiveness, it may be necessary to decrease the number of provided models from five to four. This matter is expected to have an advantageous impact not only on advertising but also on sales volumes of these products and their price-to-quality ratio. As for pricing, as it was mentioned previously, the company tended to have a price that was below the average value. In this instance, the enterprise can consider slowly increasing it (from $1,320 to $1,500) after the manipulations and marketing activities mentioned above. It will upsurge the associated revenues, while a retailer discount of 14.5% will also reduce the states of expenditure and related costs. The warranty can stay the same, and a combination of these procedures will move the company closer to K.

Asia-Pacific

Speaking of Asia-Pacific, the price-to-quality ratio has to be increased to 5.0 while the marketing spending can be decreased to 4,000. These changes are vital, as they modify the location of the company while moving it closer to the competitor K. This ranking can be enhanced with the help of interactive and social media marketing campaigns. Thus, reducing the number of models from five to four can also be considered as an opportunity since it will help reach the desired customer satisfaction. Concerning the price, the major competitors have their value range from $1,420 to $1,550. Consequently, slowly increasing the price from $1,310 to $1,490 will be rational. Nonetheless, reducing retailer discount can be viewed as another approach to maximize the company’s revenues, and it can be reduced from 28% to 16%. The warranty period can stay unchanged.

Latin America

Speaking of Latin America, the company has to focus on the price-to-quality ratio while aiming at 4.5/5.0 in the ranking. This matter can be reached by enhancing the effectiveness of marketing campaigns and paying attention to the promotion methods such as social media. Simultaneously, reducing the number of models from five to three can be discovered as one of the ways to decrease average spending on advertising from $5,000 to $3,000. A combination of these aspects can be viewed as a logical reason for increasing the prices from $1,309 to $1,600. Nonetheless, this step can be implemented only after reaching the ranking of 4.5. Alternatively, these marketing strategies can be discovered as a rationale for reducing retailer discount, as the company’s positioning on the graph will be relocated closer to H and G. Consequently, its value may be reduced from 27% to 18%. Similar to the operations in other regions, the warranty period will stay the same (360 days).

Conclusion

In the end, realistically, the enterprise can become closer to the market leaders by enhancing its ranking with the help of marketing campaigns while focusing on both B2C and B2B segments. To change a position among competitors, the marketing budget can only be slightly reduced, as, otherwise, it will be impossible to modify the perception of consumers and become one of the market leaders with high-quality products. After improving the company’s image, it will be the potential to increase prices, as it will lead to the growth of the revenues. Nevertheless, decreasing retailer discount can be viewed as a priority and the most suitable method to improve financial performance since changes in prices may provoke the loss of the market share.

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IvyPanda. 2021. "GLO-BUS: Regional Competitive Advantage." May 14, 2021. https://ivypanda.com/essays/glo-bus-regional-competitive-advantage/.

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IvyPanda. (2021) 'GLO-BUS: Regional Competitive Advantage'. 14 May.

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