OPERATIONS

Operations



Operations

Operational concerns surrounding the introduction of the M-box in Czech Republic

For industrial products, there are several ways to ensure marketing efforts for the introduction of the M-box in Czech Republic. These include direct marketing, channeling through specialized trading company (distribution partner), and auction based market operation to local investors. With respect to the market characteristic of Czech Republic, the selection criteria of the distribution channel must take into account the current economic and political systems in the country, which derive the conditions for exporting the M-Box product and also the very structure of the circuit trade.

In a country with market economy liberalized to import regime, all the solutions can be tested for connecting to the local distribution network. In a protected market, engaging in local sales efforts is expensive and is difficult to achieve significant market segments (Wiersema, 2006). The solution continuously concerns to reach consumers through local distribution networks that lie in the establishment of a subsidiary, in the transfer of the license to manufacture, or creation of a joint industrial venture.

Engaging in Local Sales Efforts

In Czech Republic market with constrained distribution channels, engaging in local sales efforts is not profitable. With few exceptions, the creation of subsidiaries or branches, or the maintenance of employee representatives, whereas it is convenient to connect with those who know know how the country's trade (such as importers, distributors, exporters delegate specialized agents) require establishing a negotiation with multinational distribution established in the country (Wiersema, 2006). Other factors that will influence the selection of appropriate distribution channels include the characteristics of outlets, number, geographical spread and purchasing methods, the characteristics of the intermediaries, the venue and organization, and the distribution system of competing firms.

The demand for M-Box and peripherals has grown rapidly due in large part to the following: the explosion in digital information and content; the growing need for technology that enables people to gaming system content; and the rapidly growing demand for information technology in emerging markets of the world. Gaming system sales represent a major driver of this industry. Worldwide gaming system shipments are expected to grow at an average annualized rate of 8% in the five years through 2011, which will also promote growth in sales of associated gaming system peripherals (IBIS World, 2011). Growth in information across communications networks will promote sales of gaming system and peripheral equipment.

Undertaking Local Manufacturing Operations

Undertaking local manufacturing operations in Czech Republic is believed to have high barriers to entry. Incumbents may have built sizable operations. Economies of scale can provide firms with negotiating power in purchasing raw materials, and efficiency benefits in R&D, product development, manufacturing, marketing and distribution. Brand-owners and, to a lesser extent, original design manufacturers (ODMs), can spend significant amounts on R&D to provide competitive advantages (and, potentially, barriers to competitors). These companies may have also gained market knowledge, and representation and access to offshore and local markets. Brand names and reputations are not built overnight (Wiersema, 2006). Increasingly, purchasers of computer equipment are focusing on purchasing from well known, reputed and financially ...