Identifying an Irish Business and its potential growth in a new Global Market. Researching its visibility to succeed in this market, using research tools and techniques.
In a world that is becoming increasingly globalised, a business cannot understate the importance of adapting business practices to successfully enter a range of markets with minimal disruption to the daily running of the business. It is the core aim of the majority of businesses to enter defined global markets and to ultimately operate their business from them.
The purpose of this report is to understand that the ingenuity of doing business in a global market, it is not simply a matter of physically moving the enterprise over to the chosen destination, but more importantly integrating with the market and doing the research to ensure that you are a cultural fit to the chosen market.
There are a number of factors that will be discussed during this report that will hinder the success of development in a market:
- Cultural Norms
- Entry strategies
- Political unrest
Having identified the core elements that are likely to cause complications to the global strategy, it is imperative that corporations develop a strategy which can address these issues, ensuring a very successful integration of the company in the chosen global market.
Throughout the duration of this report we will be showcasing The Kilkenny Shop’s (TKS herein) entry into the defined global market that is the USA- and our chosen area, Boston Massachusetts. We will concentrate on the significant influences outlined above and observe how they effect a successful integration with the culture of the US.
There are many reasons why TKS has to look further abroad to expand its market share in the fine crystal good market (Tipperary Crystal), one of the major reasons that TKS has to look beyond the EU for a new market is due to the EU states staying true to their nationalities i.e. France first EU second. Once the need for a new market has been established it is imperative that the correct procedural steps are followed through so the business can benefit from the new markets.
Ireland has a small open economy, and as a result is heavily reliant on international trade, making it the 27th largest export economy in the world. During the last five years exports have increased at an annual rate of 3.35%. In 2016 Ireland had a positive trade balance in net exports. In terms of GDP per capita, it ranked third of 89 OECD countries Gasper, P (2014).
Since 1973 Ireland has enjoyed free trade agreements with the member states of the European Union and, via European Economic Agreements, with four EFTA member states. An EU joint transportation policy allows for free movement of goods and capital within member states. A common tariff is applied to imports coming from non-EU countries. Taxes and excise taxes are levied in the country of final destination, in Ireland the standard rate of Value Added Tax is 23%.
Commercial trade and investment relationships between Ireland and the USA are ranked as significant by international standards, with the US being the top export destination accounting for 26% of Irish Exports. Ireland’s membership in the EU and its geographical location at the edge of Europe and close proximity to the UK- an extensive market, make it a very lucrative base for their EU operations. Figures for 2016 show that Irish firms investments are significantly linked with the US – 400 companies currently operate in the US, investing $85.5b, and employing 80,000. (Mottl, J, 2017)
Another significant export destination for Ireland is the UK at 13%. In terms of imports into Ireland the UK is Ireland’s largest trading partner. Ireland is currently the sixth largest source of Foreign Direct Investment in the UK.
Increasing consumer confidence has been a continuing trend in Ireland over the last few years, hitting its highest level since the recession in the second quarter of 2017. The Nielsen Consumer Confidence Index, which is based on perceptions of local job prospects, personal finances and spending intentions, (Nielson, 2017) ‘showcases Irelands consumer optimism is 102 degrees of optimism while Europe’s Consumer Confidence ranking level lies below the baseline at 85’. This bodes well for a continuing increase in consumerism in the domestic market.
The Kilkenny Group has 13 stores in prominent locations in Ireland, as well as two award-winning in-store cafes and an online outlet that serves a global market. Despite a high level of consumer confidence in Ireland, the domestic market is now close to saturation. In order to grow, the company must look outside of the domestic market and, taking account of Europe’s current ‘pessimistic’ Consumer Confidence Level and the imminent department of the UK from the European Union, must look expand into markets outside of Europe.
In today’s marketplace no company or product is without potential competitors or substitutes. In terms of high-end crystal products, this is a very accurate statement. The competitors range from domestic competition coming from design studies based in Dublin, Dingle, and Waterford. Domestic retailers and competitors to Kilkenny include Debenhams, JHills Standard. Global competitors hail from Italy, China, Czech Republic, Germany, France, US with crystal glass produced by Baccarat, Daum, Lalique, Steubers, Tiffany, Swarovski.
The increase in online consumers has created a reduction in brand loyalty whereby what were once loyal customers to the TKS shopping experience can now purchase crystal glassware from international retailers. Crystal can be handcrafted or mass produced, which influence both the quality and price. The quality and price point of crystal will depend largely on whether it is handcrafted or mass produced. The market sector in which Kilkenny aims to sell its crystal ware differentiates itself from its competitors as a result of Kilkenny’s emphasis on quality, design, emotional attachment and competitive price-point.
Task 2- Conduct a detailed PESTLE analysis of the macro-environment of the country the company will be operating in.
The context that was described in relation to the environment of TKS chain, as previously discussed, offers us insight in the micro-environment of the Irish market. By observing the micro-environment we are able to characterise the economic and operational factors that continue to make this business venture such a successful model in Ireland. However, if we were to examine the external environment of the USA, the chosen area that The Kilkenny Shop will be operating in, it is essential to assess and specifically chose the area that will benefit our business to operate there.
There are six operational factors that The Kilkenny Shop must consider before entering any new market. The purpose of examining these factors is to give the company a wide perspective view of the macro environment, encouraging businesses to critically evaluate both positives and negatives of their chosen entry strategy into the environment and providing insight into different marketing strategies that suit the area you choose specifically (David et al, 2014). This is the PESTLE analysis, a tool fundamental to the successful entry of any business into a given market, and a PESTLE analysis is formed from the following factors:
- Political Factors
- Economic Factors
- Social Factors
- Technological Factors
- Legal Factors
- Environmental Factors
These are the measure of the government’s intervention with businesses, through legislation, tax regulations factors and laws. The USA operates as a highly developed mixed economy. The USA is divided into 50 states in the USA, and each state instigates its own legal and administrative jurisdiction within their bounds. They are not sovereign states and so still answer to the Federal Government in relation to decisions made in the Federal Government, most importantly in relation to tax laws. This is an essential consideration for our business model.
The political factors most essential for observation by the Kilkenny Shop include:
In recent months the President of the USA, Donald Trump’s statements on new tax reforms have reintroduced the USA to the public consciousness as a nation that is ready and willing to spend. This has been instigated through a series of proposed tax reforms aimed at stimulating economic growth and increasing the capacity for expenditure on goods and services. These proposed tax reforms include:
- Lowering the rate of ‘Corporate Tax’ from 35%-20% – This has been proposed as means of enticing American firms back to the USA, and it will encourage many international companies to follow their lead due to the large markets and lower taxes that the USA will offer.
- Changing the ‘Pass through Rate’ from its current rate of 40%-50% (depending on business profits) to allow businesses to be taxed under an individual code, which will lead to a reduced overall cost to businesses.
- Raising the bottom tax rate to 10-12% for lower income families – This will free up spending money for lower income families, thus enabling and encouraging a new segment of the consumer market to purchase discretionary goods and services.
The US tax system will be discussed in further depth later on in this analysis but these decisions, made by the federal government of the USA, are showcasing that the USA is not only emerging from recession, but is ready to make itself more corporate-friendly than ever. The Kilkenny Shop is primed to enter the USA at a point which, should these proposed reforms go ahead, will allow us to avail of tax incentives, including a lower rate of corporation tax and pass-through-tax and, perhaps more essentially, an increased target market likely to avail of our luxury goods.
Political impact of developing ideologies:
With the induction of the new US President and his slogan and his projection and ideology for Americas future- ‘Make America Great Again’, this leads to the question, is making America great again at the expense of foreign-owned business? We must acknowledge that Americans voted for this ideology and we must assume that they are in agreement with the statement that America must focus on their own future. Will this impact the Kilkenny Shops advances in to this market or will smaller businesses not be included in the outcome?
In the 2016 Election Hillary Clinton won the majority in the Massachusetts state, earning 60% of the vote out of a very high turnout of 79.5%, she was also aligned all 11 of the state electoral votes, making Massachusetts and Hawaii the only two states where Trump failed to carry a single county.
This should encourage the Kilkenny Shop to start business in this area as it encompasses a mentality of an area that is on the face of it more welcoming and open to change.
As discussed above it is difficult to assess the USA as a single entity due to the existence of the 50 states and constituencies but due to the federal laws in place, it is possible to evaluate the economic factors of America with a general overview. These factors are amongst the most essential for consideration in the PESTLE analysis for the Kilkenny Shop as they will enable us to pinpoint the existing economic conditions of this general target market (the USA) and also help us narrow this down to a more specific locale. The most imperative factors to comprehend when evaluating the economy of any country, but especially the USA, are:
Knowledge of Tax:
America has a higher rate of taxation than Ireland for small to medium business (SMEs), best exemplified by corporation tax in the USA residing at 35% whereas in Ireland the rate for trading incomes rests at 12.5%. About 75% of businesses in the USA do not have the means to call themselves corporations and thus they are labelled as ‘pass-through-entities’ who pay tax rates depending on two factors
1) Quantity of sales
2) Personal tax they are paying.
According to the National Federation of Independent Business (NFIB) the top rates that business owners pay can be as high as 39.6%, which, in addition to state and local taxes, can push the tax payment for a SME to nearly 50% of gross profits. With these taxation considerations many SMEs in the USA may not survive long, and this could rule out small-time competition of TKS; however it is essential for us to have a strong comprehension of all taxation systems in the US. This is imperative to understand when reviewing changes oncoming in this taxation system, as addressed above.
Spending Habits of the Populous:
The US is similar to Ireland in that it has suffered an enormous recession very recently. Although in late 2017 the US has emerged from this recession, the average American consumer is still hesitant to live beyond their means. In 2014 in the height of the recession over 40% of US citizens were living pay check to pay check, though this statistic has made it way down steadily from this date to an average of 18% living pay check to pay check.
When regarding the statistics indicated above regarding US citizens working full time, it gives us a general idea of the market we are hoping to enter. There is little point trying to sell to a market with no capital, but clearly the USA is a growing economy and once the growth has proven stable then it is up to enterprises such as TKS to capitalise on the economy’s growth. In 2012 according to US Government Stats the retail spending per capita was $ 13,443 and this grew to $17,213 per capita in 2017. These figures showcase a distinct growth in consumer spending habits and are widely regarded not to be an accurate portrayal of individual financial liquidity due to the speculation that many people, following the recession, are saving much of their capital
The USA has a population of approximately 323.1 million people and due to the sheer scale of this potential consumer market it is imperative to segment this number by a number of factors including age and social status break down the various age groups and social statuses when evaluating the social factors which will affect the success of TKS in entering this market.
We will take this opportunity to showcase the best possible location in the USA for the establishment of our first US-based Kilkenny Shop and our featured products, which is the Tipperary Crystal range. The Kilkenny Shop aims towards a more affluent clientele and so logically would be aimed at the 30+ rage range. This is not to say that the younger population wouldn’t find products of interest in this store but the majority of clients entering this shop would be over the age of 30, though potentially accompanied by younger children.
As mentioned above a significant percentage of Americans still live from pay-check to pay-check, which is imperative to bear in mind when entering this market, especially in relation to targeted marketing. It is also interesting to note that the highest percentage of people living from pay-check to pay-check is people that earn $55,000-$100,000, and a proportion of this is likely spent on such discretionary goods as are offered the TKS.
Below a population pyramid depicts the age and sex of the US population:
American Attitudes to Foreign Imported Goods (FIG):
Our chosen area is the wider Massachusetts area with headquarters being established in Boston. This wider area is home to 3.9 million people approximately (as indicated below) and Boston city contains just under 400,000 thousand people, 15.6% of which are of Irish descent. Since Irish initiatives such as the Wild Atlantic Way and The Gathering, people of Irish descent have been more drawn to Ireland and Irish products in general.
As we mentioned earlier in the report, Massachusetts is one of the only states that didn’t even partially embrace the ‘Make America Great Again’ campaign, this is a strong indicating factor that the Massachusetts area is open and willing to trade with other cultures. This teamed up with the largest percentages of Irish-Americans that returned home during The Gathering (42% American).
These are factors that relate to the existence of technology and development of technology. Although Kilkenny Shop isn’t a provider of technological goods, it relies heavily on the use of Technology for Marketing, product inventory etc. what we need to observe is the following:
What Technology is critical for day to day operations?
For The Kilkenny Shop to be a success in its day to day operations they need complete access to the Internet, full uninhibited use of the world wide web is more important than ever, not only for stock inventories and contact with suppliers etc. The Kilkenny shop has a large presence online; they have a website which keeps everyone involved in the company up to date on everything that goes on in the company:
Facebook: The Kilkenny Shop
This also helps them keep up to date with the customer satisfaction and reviews on different products and services. This social media trend is also a large part of the marketing campaign for businesses such as TKS; they rely on the word of mouth and customers coming particularly to their stores.
POS- Every business relies on these for transactions; The Kilkenny Shop would have to make sure that they are compatible with the US forms of payment.
What technology could curb cost?
There is great movement from cash to credit cards and mobile transactions, which could mean that the margin of error for supplies would be much smaller. This is especially prevalent in the USA where cards are used on a more frequent basis than in Ireland. It means less need for tenders and less error in the accounting for profits and loss.
These are the factors that highlight how the law affects the way both businesses behave and how customers behave. It outlines what can be sold in a particular place, how items can be transported and if any suitable warnings. Etc.
Despite the fact Ireland and America come from similar national values as you will see highlighted throughout this report, they have very different methods of dealing with legal factors including:
Employment Law: Employment law is the legal status of an employee’s employment, it dictates how employees should be treated, what wages they can receive, how can they be dismissed etc. In Ireland there is a stringent employment law that is enforced in all institution of employment from public to private limited companies. Please see appendices (A)
Consumer Protection: this is a law designed to protect consumers from fraudulent practices and faulty products. For the Kilkenny shop this means making sure that the products in a country adhere to all the specific quality assurances that are in place for the problems. Please see appendices (B)
The environmental factors for the Kilkenny Shop are an important external factor to consider as they represent the physical presence of this store. Though this shop has an online presence, and its products are currently available to view and purchase online, this would be the first chance for American shoppers to experience the physical presence of this business. It is therefore important to pay close mind to this attribute to ensure that our consumer market finds our store accessible. Also, as foreign-owned business considerations about land-marks is an imperative study to allow for successful integration.
Where you choose to start your business is extremely important in relation to its success. The most fundamental factors centre upon accessibility; the shop must be easily accessible through a number of routes be they road, rail and plane. This is for the purposes of both bringing the merchandise to the place of business and bringing consumers to the location. The US has incredible road transport systems, especially in the Massachusetts area allowing strong bus, train and road links for the transportation of goods and people. Massachusetts has an Airport three miles away from downtown Boston (Logan International Airport (BOS)), and an airport that deals solely with the transportation of goods (TF Green) in Southern-Massachusetts.
Unlike Ireland, a climate that is variable without extremes the US as a whole has extensive extremes when it comes to climate from raging forest fires in California in summer to ice winters in NY and Boston. These are factors we need to understand before entering this market as they are likely to affect our transport links and accessibility. In Boston, and the general area of Massachusetts the climate type is a humid continental with warm summers and cold and snowy winters.
For current weather around Massachusetts airports follow link:
Figure 3- Average Monthly weather chart-Boston Massachusetts- Statisa 2017
Figure 4- Boston climate graph- Stastisa 2017
These weather charts outline the predicable nature of the Boston and greater area weather patterns, the transport authorities are prepared each year for the snow or rainfall. This is important for a business that relies on deliveries from an airport and road transport.
Culture is “learned behavior; a way of life for one group of people living in a single, related, and independent community” (V. Terpstra, 2006)
Having decided to focus on one initial area for product/service launch in the USA the focus of the cultural characteristics of the local area will in Boston and Massachusetts in the USA, Acculturation won’t be an obstacle due to the following analysis model for elements of the culture both in Ireland and USA;
The English language is spoken in both USA and Ireland; therefore, many American multinational companies have their headquarters for the EMEA region based in Dublin and vice versa many Irish companies looking to expand their base in the USA. This is usually a major barrier to effective communication, it will mean a major stress has been alleviated of the team that goes across initially, and it also aids the communications with customers and potential staff that have to be hired.
According to Albert Mehrabian’s Communications Theory, 55% of what we say is through physiology- our facial expression and body language, these are the same for both USA citizens and Irish.
Christianity is another shared aspect between Irish and Americans which makes a smooth transition and seamless ways of operating in both countries as they nearly have unified annual holidays, weekends and cultural events.
Americans, in general, share the same values and attitudes as the Irish people. Freedom and democracy play a large part in the cultural identity and historcal character of the two countries. Being honest without hurting the other’s feeling is common when dealing with a daily basis. We can notice that Americans and Irish respect time when they attend meetings or go to work.
The United States and Ireland share the ideology of free market concept and capitalism, they always are connected due to the immigration and the Irish ancestry has kept the virtual bridges between two countries. In a closer consider the different infrastructure types; economic, social, financial and marketing, we can have a huge similar structure of these frameworks. However, there is less representation of these elements due to the size and population of Ireland.
Both countries have tiered system of higher education. Boston Massachusetts is home to many great higher level institutions including MIT and Harvard. The existence of these institutions and the weight of these institutions are carried across the board. The Irish mentality has always put a great focus on education and
The United States and Ireland share the same classification of social Institution concept as many families targeted in Boston and great Massachusetts are of Irish background and them to some extent still connected to their roots. This involves; social groups, social stratification, and social mobility.
Applying Hofstede model for the feasibility of the Kilkenny shop in the United States.
For Ireland, the harmony of power hierarchy is almost comparable, managers and employees are at convenience sharing ideas and exchanging knowledge in an informal way and communication channels are friendly and informal. In the United States, there is less tolerance and the ranking is higher due to the idea that everybody is unique.
In Irish business world, there is a sense of individualism. Companies promote individuals hard work and achievements. The individual employee gets rewarded based on her/his performance and what they can do as an individual, however, teamwork plays an essential role to hold the entity and the business division they work within where other measures for teamwork can be measured and rewarded. Americans have more tendencies towards individualism and employees are self-reliant and expected to manage their assignment and job task independently, thus, they don’t hesitate to approach their colleagues if there is a need for collaboration.
Both countries share similar score for Masculinity, “the winner takes all” and “can do” attitude is dominant in both societies. Competition is fierce to show superiority and being the best achiever. It is either “Strive for the best” or “like what you do”.
Too much Masculinity in the business and society can create more power distance and less individualism resulting in an interdependent community if the gap that masculinity creates is not treated and balanced.
Irelands scores less than United States. Irish people are more practical, and they base their judgments on facts rather than theories and emotions. They embrace creativity and imagination to solve issues they encounter. Americans are scoring higher in this parameter due to the historical events which had an impact on the American society driving them to put measures in place to avoid unexpected disastrous consequences. In our belief that current score doesn’t reflect the actual mitigation plans and economic crisis has left some traces on this issue.
With a low score, Ireland and the United States are more alike countries, and both are normative societies. Irish people value traditions and they have high moral, well-shaped personality and huge respect for their norms. They are very proud of their ancestors and history. Americans know what’s right and what’s wrong and they have good judgment mechanisms and most of them have a less pragmatic approach. Both countries are more focused on short-termism and achieving quick results in short time. American companies measure their wins on a quarterly basis and this trend is growing in Ireland since many American multinational and global enterprises operate in Ireland. People in both countries tend not to save for future unexpected events which are a norm and identifier for this dimension.
“Work hard, play hard” this is the motto Americans worship, and every hard work should be rewarded. This seems to be the current attitude within both societies as we are moving towards more stressful and complicated work environment. Incentives and celebrating the results bodies and souls need to be satisfied to keep them doing their job with scoring high results.
To design, develop and create a new high end “Phygital” experiential retail store presence in Boston. Specifically targeting our higher earning 30+ audience who are comfortable in both traditional retail or equally online, this store will encourage customers to either drop in, purchase & collect, click & collect before they visit or even drop in, purchase and have their order delivered to their home afterwards.
“Phygital” is when a traditional retail bricks and mortar store experience blends with an online experience. It is being argued within the industry that Phygital is a cutting edge, as it allows customers control over how they shop, research and compare, while they browse, while “Click ‘n Collect” as cited by Danny (Silverman, 2017), has the potential to become a $42 billion industry in the USA, with Kantar predicting $55 Billion by 2021 and Nielsen predicting $100 billion by 2025.
This store should provide a best in customer experience. For the successful implementation long-range plan would have to be developed so to encompass the expansion of the format into other major East Coast Cities in year 2, commencing with Manhattan, NYC, and into Chicago in year 3.
- Physical: The store will have a strong emphasis on quality & exclusivity with a high quality interior and a fully immersive engaging customer experience. This will encompass a high end external & internal presence, with a significant focus on Tipperary Crystal, both on display and associated with Tipperary Crystal features like Crystal Chandeliers & Bannister ends, mirroring and emphasising the full Chrystal range on display available to purchase for collection or delivery.
In keeping with the Kilkenny brand tagline of “promoting Irish design” and with a view to capturing the halo effect of Ireland for recent visitors, and also to encourage the dream of travelling “Home” someday, it will be designed by notable Irish-American designers. The design will aim to look and feel Irish, showcasing colours & natural resources; will encompass a living grass wall, water features, including a multi floor waterfall.
(Example Image 1: source, pinterest, https://i.pinimg.com/originals/60/c8/02/60c802f512810b771364becd67d132fa.jpg)
- Digital – Website: The Irish based website www.kilkennyshop.com will be cloned, and a site targeted at USA based shoppers created, to facilitate US tax rates, sales taxes, and to accept dollar payments seamlessly. This will be done by specifically targeting US based IP addresses, using software as a service provider like www.geolify.com, who utilise IP Geo tracking, and will allow for higher conversion of traffic on the site and lower acquisition costs. The entire range of Kilkenny shops catalogue will be available to purchase via the website. This will also allow targeted Digital campaigns across paid search, using traditional media agencies & with Google direct.
Utilising the existing TKS brand guidelines, to create a specific Facebook, Instagram, Twitter & Snapchat profiles for the business, promoting images of the store for a tangible local USA connection. The primary focus of commencing a social media strategy is to facilitate the building of the brand, however, indirectly, you can have opportunity to drive traffic to the website for a low acquisition cost.
Key for success is to appoint a full time resource to manage these pages, and publish availability times, and opening hours for full transparency and to ensure all posts, direct messages and complaints are dealt with within the published service level agreement. Why is this important? Kilkenny will be a new brand in the USA, opening up selling Irish premium products. The Irish brand is marketed by word of mouth on the basis of the warm Irish welcome. It will be imperative that the target customer group trust the brand, trust the products and trust the people representing the brand, if it is to succeed.
Social media can play a significant role in building up awareness and trust in the brand, if your social media strategy supports a customer centric set of key performance indicators, like minimal response times and 100% response rates etc.
Citing Jayson Demers on (Forbes, 2015), social media allows a brand:
A) Build up a trust base.
B) Be unique and different, a large corporate brand can stand out, if you let it, you don’t always have to just talk about yourself. This brand could cross promote Ireland, other Irish brands etc.
C) Show that they really care about their customer, and want to look after them.
D) Be responsive…not in a robotic way with standard template answers, but with personal unique answers.
F) Be authoritative. Important that if you are answering, it should be correct, and clear, or else customers will mistrust you and go elsewhere.
A formal store opening, with a significant media invite list, with local titles like the Boston Globe, IrishCentral.com, & the Boston Irish reporter invited alongside key Irish media like RTE, The Irish Independent and The Irish Times.
To maximise PR exposure and minimise budget spend and to capture the halo effect of Games of Thrones success in The USA the utilisation of one of their Irish stars, Liam Cunningham or Aidan Gillen, who could potentially be a long term ambassadors target, at a rate card saving of circa 80%, compared to similar well known US based stars.
Opportunity to cross promote any PR wins via all internal and via partner social channels for maximum exposure and to facilitate driving additional traffic to the website for both brand awareness and to deliver sales opportunity.
The initial marketing strategy will be to take a prudent approach in year one, utilising a mixture of targeted lower cost options and campaigns, leveraging Public Relations when possible.
Budget will be made available for a mixture of alternative campaigns to A.B test to ensure optimisation.
Example campaigns in year one:
- Boston based print media small add repeats.
- Local City based print publications with regular quarter/half page adverts.
- Leverage existing agreements with Irish Digital media, (with a likely occasional USA readership).
- Irish community based organisations sponsorships, where appropriate.
- Pilot a list purchase targeting the target audience in the Greater Boston area for an eDM campaign.
- Take out an advertorial in Cara Magazine in launch month, followed by a monthly small ad. Cara is the inflight magazine on Aer Lingus flights. Very cost effective and highly recommended as worth noting that this will have benefits to the wider Kilkenny business as it covers the entire Aer Lingus fleet, and not specifically targeting the USA. For example by artist of the light Rosin Fitzpatrick who advertises in Cara and who said “Passengers on Aer Lingus flights are a wonderful audience for me to reach, as I am an Irish artist exhibiting in New York and other parts of the US. I have also been very impressed with the professional service provided by the team at IMAGE publications.”
- Take an advert in month two in the Rhapsody Magazine, this is the exclusive luxury lifestyle magazines, only available to the High net worth, and target audience Business and First Class passengers travelling on United airlines throughout the USA, including to and from Ireland.
- Very tactical and targeted to our audience, low cost advertising campaigns using like Facebook, with set budgets and a clear Call to action onto the website.
To understand the exit strategy, it’s worth reverting back to the principle objective in entering the market in the first place, and that is to create a new distribution model in the USA to facilitate the export of Irish made produce, to a new, friendly market.
As part of the Long Range Plan for the business, it is envisaged that the strategy would be to exit the day to day operations of the business in year 5, by means of evolving to a Master Franchise model. Critically, this strategy will allow the business utilise the initial 5 years to build up a commercially workable model, and make it attractive to potential suitors. It will also allow the business an opportunity to exit leases and close the business at year five it the commercial model isn’t working as expected.
The master franchise will be marketed initially including the territory of the East Coast of the United states, to include the cities of Boston, New York and Chicago, with options on a further two cities.
The key milestone required to facilitate this:
A) For tax efficiency, all initial store investment will be fully capitalised over years one to five.
B) The USA business region will be independently valued, and will be sold at market value.
C) A Request for Proposal (RFP), advertising the sale of the master franchise will be published in key franchising media at year 4.5.
D) Master Franchise will be appointed at year 4.75, allowing for a 3 month induction.
Task 5- Recommend the local Business Norms that the company should be aware of when building relationships with the chosen market.
It is important, when doing business in another country, to have an awareness and understanding of the social and business norms that prevail in those countries. While American and Irish cultures may on the surface appear to have many similarities, there are also subtle differences to be mindful of when dealing with them in a business context.
In general, America has a no touch culture. Personal space is deemed to be very important. When people accidently bump into each other they immediately excuse themselves and apologise. You should respect a “bubble” of personal space of two feet. A firm handshake, a friendly smile and an informal introduction are considered appropriate in a corporate setting, irrespective of the other person’s seniority within the company, age or gender (Terpstra, R,2006). The display of emotions are widely discouraged as they viewed as being unprofessional. In a business context, trust and credibility are developed through suppression of emotions.
Americans feel it is important to tell it like it is, so they say what they mean, and mean what they say. Delivery is usually direct, clear and transparent. Americans expect other people to express themselves politely, but clearly, and it is assumed that they will ask directly if there is something that’s not known or understood. Sports terminology such as touch base, call the shots and ball-park figure are often brought into the business lexicon. Great care is taken to avoid sensitive topics such as politics or gun laws, and to avoid conflict. Differences of opinion are generally viewed as conflict.
While in Ireland 70% of communication is non-verbal in the US little attention is given to non-verbal cues and body language. Interruptions are considered impolite so they include natural pauses in their delivery in order to allow others to reply. They can often feel uncomfortable with long silences or pauses in conversation and may fill the existing space with small talk. Work and social life tend to be kept separate, therefore expect any small talk to be business related. At business meetings they prefer to get straight down to business.
Americans expect people they come into contact with to always have their happy face on. When an American asks how you are, it’s often a rhetorical question and not an invitation to discuss problems. Similarly, the suggestion to “let’s do lunch some time” when saying goodbye, is frequently an empty courtesy.
American people are happy not to have all the facts and can be comfortable with ambiguous situations. Often the desire for speed exceeds the need for precision. The American attitude of learning by trail-and-error is more accepted in the US than in any other country. This attitude allows them to take risks and make mistakes freely as making mistakes is not considered failure but an attempt at embracing a can-do attitude. Risk taking and having an entrepreneurial spirit are highly valued attributes.
Autonomy and initiative are encouraged. They are quick to adapt to change, viewing it as inevitable and as a normal part of progress. Individuals seeking self-improvement are motivated by receiving additional responsibility, though they will expect recognition for accomplishments. The American emphasis on individualism rather than collectivism encourages individual initiative and drive for achievement. Their cultural mantra is to always strive to be the best, the goal being to win at all times. In an organisational sense this means that managers expect employees to take initiative and be self-reliant. Excessive managerial oversight is perceived as micro-managing and equates with a lack of trust. In a business context, managing good relationships is a second to getting the job done.
Be prepared to be generous with your compliments. Americans relish public recognition for a job well done with this culture often demonstrated through Employee of the Month type awards. Criticism needs to be given delicately and with diplomacy. Avoid being overly negative or rude in your conversations. Too much bluntness appears unprofessional as do big emotional displays in a public setting, especially if you voice negative feelings like disappointment or anger.
Although typical work week is 40 hours, staff are expected to do what’s needed to get the job done. This often requires people to work unpaid overtime to meet deadlines. Individual task orientation means that tasks are completed on a sequential basis.
Business leaders will generally be directly involved in discussions about business opportunities, but tend to avoid the negotiations or haggling about the finer details of the business arrangement. Arguing over details is often viewed as embarrassing and instead the negotiations will be delegated to the legal teams representing both parties.
In general, written communication, whether by text or email, although impersonal, is preferable to verbal communication either in person or by phone.
Decisions are often taken using a consensus-based approach whereby the leader will usually make the decisions and all are expected to be supportive once the decision is made. Strategic decisions tend to be made with a shorter term outlook than in other countries.
Participation in Meetings
Regular meetings are an important part of business life in the US. Their meetings are generally well structured and following an agreed agenda with all participants expected to contribute. A list of action items is usually created, assigned to individuals and follow-up is expected.
“Time is Money” so in this respect punctuality is emphasised, as time is a highly valued commodity not be wasted. Small talk and bond building is considered wasteful and not encouraged at meetings, instead they prefer to get straight down to business.
Americans are generally uncomfortable with hierarchy and the class system. The lack of formality is also noticeable when it comes to names and titles. Calling everyone by their first name, regardless of seniority, is standard in most American companies. Interactions are relaxed, friendly, informal and occasionally spontaneous. Titles when used only denote job function rather than status or hierarchy. An individual’s age, position, rank and gender do not strongly influence how they interact with other colleagues.
Identifying how a business like TKS enters a defined market like the Boston Massachusetts (USA) is a very precise process that is managed by a series of complex internal and external forces that vary in relation to importance.
TKS and its chosen initial product of Tipperary Crystal would have to invest a lot of initial investment with both time and resources to make a success of the transition to the USA, and initially it could only be through failures and observation of how other similar models worked in the US that could create any true understanding of how to fully operate and how to obtain a successful charter strategy.
The factors that would make TKS initial dilemmas and reluctance to enter the US would be alleviated by these major forces:
- The US is a changing society and is holding more deeply onto the roots that US nationalist are trying to sever, this teamed up with Irelands strategies to bring people back to Ireland for holidays makes it a very valid reason that this would work, this is especially true in Boston where there is such a high ratio of Irish descendants (15.82%)
- Both US and Ireland focus on short term strategies, this is why you would be better starting off with a location that has Irish- American population., it is easier to build from small-time to big-time than vice-versa.
Overall between significant shifts in public opinion and lowering the tax rates so that business will want to come to approach the US for tender, TKS is the perfect Irish business to start business sin the US, it has similar values, language, perfect tax breaks that would make it initially economic, and similar cultures. It is the mixture of blending the culture and the work ethic together to make a very realistic leap in to the global market for TKS.
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