Step 1: Market Entry Strategy
An appropriate and effective market strategy is needed to guarantee that the company takes all the necessary steps to enter and succeed in the market. In the short run, a suitable option is to rely on social media. Li et al. (2021) demonstrate that this platform is popular and in demand today because modern customers spend significant time on social media.
HELD CBD can focus solely on Instagram, Twitter, and Facebook to successfully and effectively enter the Spanish market. As for a long-term strategy, the organization should invest in brand building. Currently, international and internal competition is fierce, indicating that the business should improve its quality and customer service to gain a competitive advantage over other firms. HELD CBD should keep promoting these values to help clients develop a positive image regarding the brand. These two approaches can increase the company’s probability of reaching the Spanish customer base efficiently.
Step 2: Regulatory Compliance
Even though Spain poses challenges for the company due to regional peculiarities, the local regulatory landscape yields a few recommendations. At present, HHC is legal in the country, and people can purchase buds, sprays, and hash with HHC (Burelo, 2023). In the short term, the business should focus on the specified products and keep in mind that edibles with HHC are not allowed in the state (Burelo, 2023).
Thus, regulatory compliance is ensured immediately if HELD CBD only enters the market with approved products. In addition, the company should keep abreast of any laws and policies that will be adopted to regulate this substance. This product is relatively young, and new regulatory actions can be taken at any time. That is why the business is expected to devote sufficient attention to ensuring regulatory compliance in the long run.
Step 3: Financial Planning
Table 1 – Financial Plan First Year
The first-year financial plan shows the company will incur a loss of €55,000. However, this negative outcome results from the initial investment being included in the calculation. The decision to find smart shops and station with them was made to save a lot of money, as it allowed for providing B2B services with the product. The following table outlines a five-year long-term plan that includes only expenses and revenues.
According to the budget above, the key target for HELD CBD is to continue increasing sales year over year to ensure sufficient cash inflows to offset rising expenses. Another goal is to provide its employees with rising salaries to attract a professional workforce. These steps will help the company increase income, and the plan demonstrates that the organization will start earning revenue in 2028, with 2027 marking the break-even point.
Step 4: Distribution and Sales
The company should take appropriate steps to ensure product availability in the market. According to the European Monitoring Center for Drugs and Drug Addiction (EMCDDA, 2023), European consumers tend to purchase HHC in person and via social media. That is why the organization is encouraged to invest in all these distribution channels to target many potential clients. After a specific period, HELD CBD can determine which channel is most popular and in demand in Spain. It would be reasonable to prefer this route if the company wants to increase its market share in the future.
Step 5: Marketing and Branding
In the short run, HELD CBD can rely on a few steps to introduce the brand and its products to Spain. First, it is reasonable to rely on social media campaigns because these platforms reach large numbers of potential customers (Li et al., 2021). A suitable option is to cooperate with Spanish bloggers and influencers. Second, a suitable strategy is to participate in local events and trade shows. In the long term, positive outcomes can be achieved by associating the brand with Spanish cultural values. For example, the company can time its product launches to coincide with local holidays and show respect for local customs and traditions.
Step 6: Risk Management
HELD CBD can be subject to various short-term risks and their consequences. Currency fluctuations are probable and can increase the cost of raw materials, decreasing revenues. The organization can engage in hedging activities and enter into futures contracts to protect itself from cost growth. Supply chain disruptions are less probable, but the COVID-19 pandemic demonstrated that one should not ignore the risk. That is why the company should diversify its suppliers and maintain safety stock to mitigate the problem.
In the long run, various risks and challenges simultaneously exist. Burelo (2023) indicates that HHC is legal, but no one can guarantee that this will remain the case. Thus, HELD CBD should organize influence and activist groups that will advocate for industry-friendly regulations and shape public opinion. The organization should additionally diversify its product offerings to mitigate this risk and minimize the impact of market saturation.
Step 7: Long-Term Sustainability
Initial success and market stability can be achieved if HELD CBD targets customers with high-quality products. The organization needs to gain a competitive advantage over other companies offering similar products. In particular, the business can benefit from a unique value proposition, as this step will demonstrate its respect for local customers.
In the long run, the firm should build a sustainable presence in Spain. This country has the Sustainable Development Goals for 2030, which highlight the nation’s values and targets. They emphasize good health and well-being, clean water, and partnerships (Boto-Álvarez & García-Fernández, 2020). These findings demonstrate that the company should collaborate with local stakeholders, diversify its product line, and expand its market presence to achieve the goals outlined above.
Step 8: Evaluation and Adaptation
This step is essential because it allows HELD CBD to mitigate problems if something goes wrong. In particular, the organization should continuously monitor its performance and customer feedback. Some of the suggestions and strategies above may lead to poor outcomes or even customer disappointment with the brand. That is why the organization should stay abreast of these processes and be ready to make short-term adjustments to mitigate negative consequences.
This approach is equally vital for the future, as the market can change, prompting the company to reconsider its position and activities. For instance, regulatory changes may require HELD CBD to discontinue some product lines or change its packaging (Burelo, 2023). Any of these steps would evidently impact the initial financial plans, and the company should know how to respond to these issues.
References
Boto-Álvarez, A., & García-Fernández, R. (2020). Implementation of the Sustainable Development Goals in Spain. Sustainability, 12(6), 2546.
Burelo, M. (2023). HHC or hexahydrocannabinol: Legal colocon? Cannactiva.
European Monitoring Center for Drugs and Drug Addiction (2023). EU drug market: Cannabis – Retail markets.
Li, F., Larimo, J., & Leonidou, L. C. (2021). Social media marketing strategy: Definition, conceptualization, taxonomy, validation, and future agenda. Journal of the Academy of Marketing Science, 49, 51-70.