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Comcast’s Expansion to Foreign Market
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Comcast’s Expansion to Foreign Market
In the corporate world of today, increase in sales in terms of enlarging the market is the vision of most of the companies. When a company opts to expand its overall market to the foreign countries, the outcome will affect the given company either positively or on the other hand, negatively. Before resorting to taking such risks, a company should first conduct a comprehensive study regarding the new market. It includes effectively analyzing trade policies regulating the market economy in the given country. From the given information as already mentioned above, this paper takes turn discussing more concerning Comcast Company’s plan of expanding its market to a foreign country.
Comcast Corporation that used to be referred to as Comcast Holdings is an American worldwide firm that majors in mass media communication. With its headquarters based in the U.S., it boasts as being the leading cable television and broadcasting business in regard to the revenues accrued annually. In this paper, we select South Africa as being the foreign country that Comcast wishes to expand its market into (Cathy et al., 2015).
South Africa’s global economic conditions:
The current global economic conditions have an overall positive effect in regard to the local macroeconomic indicators. Unlike other country’s that suffered a lot in maintaining their stability towards the end of the initial decade of millennium, South Africa stood strong. It is as a result of the discreet monetary and fiscal policies. It received a rating from the World Bank as an “upper middle-income country”. In Africa, it has the second largest economy after Nigeria. Towards the end of 2014, through the analysis done by World Bank, it registered a GDP of $350.1 billion. During the given period of time, its population stood at 54 million. In addition, its income per capita averaged to $6,483 as in the analysis of the World Economic Forum.
With the positive economic conditions, it has resulted to the country becoming politically stable. It also entails an efficient capitalized banking structure. In addition, the country also enjoys abundance of natural resources, improved modern date infrastructure and free circulation of money in the economy. In the country, both the export and sale s growth are also booming. It is therefore a clear indication that in the country, imports sales most likely also booms.
Evaluation of the Prospective Competitor’s:
25AM is one of the foremost media agencies in South Africa. There is much likelihood of its incorporation of stiff competition towards Comcast’s plans of expanding a new market into the country. The mass media communication company is a prospective competitor in terms of resources as well as to the overall users that views the programs. Monthly, it reports an average of 12 million users in terms of the number of viewers. The company is also efficient in terms of delivering up-to-date digital campaigns that are widely recognized by majority of the people. Through the given platform, the company is at a position to establish significant and cost effective affiliations between their various clienteles and with the audiences viewing their programs. The firm also enjoys the advantage of retaining viable team of workforce who strives towards meeting the company’s vision and mission statements.
Evaluation of Forecast Sales:
In south forecast sales has proven beyond reasonable doubts to be a major dynamic path in the broad view of South Africa’s retail market (Cathy et al., 2015). Even though it still has a consideration as being in the infancy stage still, the given sector still yields a substantive gain in terms of the overall profitability. Similarly, the forecast sector of economy is rapidly expanding regarding its value. For example, reports indicates trend in which the value sales have heightened by a percentage of between 20 to 21%.
It is also important to put into consideration the competitive advantage that given sector of economy enjoys. For example, there is a trend in which the given sector is consistently receiving new players in the market. Taking the internet firms for example, reports indicates trend in which Kalahari internet providing firm, opts to connect with Takealot internet providers. The two firms prospects to create a major merger. Generally, the forecast sales sector is rapidly increasing in terms of operations and profitability (Johannes et al., 2010).
Type of Economy in South Africa:
South Africa practices a mixed type of economy. It is a type of economy in which a portion of the economy is directed to the free market control. On the other hand, the other portion of the market is controlled and run by the government. Regardless of the other portion left to the free market, research indicates a trend in which the government still steps in providing regulation concerning trade policies as well as to the nature in which money is spent. It is a type of economy that would affect the expansion of Comcast in a positive manner. Reason being that since Comcast is a private investor; it would tend to be creating incentives of profitability that includes cutting of costs while at the same time becoming innovative in nature.
A closed economy on the other hand, refers to a type of economy that is self-sufficient. It involves restriction of no entry of imports as well as to no sending away of exports. It has a prospect of delivering to the people whatever that they need within the sovereignty of that particular country. It will affect the expansion program since the given company will not be able to invest in the given country in the first place.
A market economy is however the type in which pronouncements relating to investments as well as to production, solely relies on the efficiency and determination of supply and demand. In this type of economy, it would affect the expansion plan negatively. Reason being, it will be much difficult to gain a comprehensive demand regarding the already presence of local relative companies.
Current Credit Market Conditions:
After undergoing a recession that almost left about one million people jobless, South Africa is currently undergoing a booming credit conditions particularly to the consumers. To most of the consumers, they have taken into consideration the offering of unsecure loans by most of the lenders. Through this strategy, it has led to most of the retailing small business in the country to escalate in terms of profitability as well as to expansion. Nevertheless, one should be void of the fact that the unsecure credits conforms to a relatively high rates of systems (Theodore et al., 2013).
With the given ease of being able to secure loans, Comcast is at a good position to expand its services into the given country. Through the creation of positive relations, the company is at a position to obtain a certain amount of credit as long as it satisfies the provided regulations of the lending firms.
Role of Central Bank on the economy of SA:
Literally, the central bank of South Africa plays a vital role towards the economy of the country. For example, the reserve bank of South Africa plays a role of both maintaining as well as to promoting the increasing level of employment, production as well as to heightening of the real income. Through this, the reserve bank is at a position of improving both the currency and the cre4dit structures of the financial institutions. The reserve bank also plays a role of adequately adjusting the components of both the demand and supply of money. It involves the even circulation of money in the economy. Taking the price level for instance, any shortage of money circulation results to the overall inhibition of development in the country hence leading to a form of inflation. In order to avoid this, the reserve bank has the sole responsibility of ensuring that there is adequate flow of money in the economy (Johannes et al., 2010).
Evaluation of the Availability of Workforce:
In South Africa, there is the availability of large number scholars and graduates who still lacks employee opportunities. According to reports, the workforce who still lacks employment opportunities comes from a diverse sector of professions. If a company like Comcast wishes to expand its market into this given country, there is much likelihood of obtaining employees who are professionally trained. In addition, the given persons are also competent when it comes to interpersonal skills as well as to encompassing of both ethics and discrete
International production tends to be facing numerous challenges in South Africa hence becoming a major stumbling block to most of the investors. Examples include political instability, threat of capital controls, exchange rate risk as well as to the availability of government financing. The above factors have a great influence in the overall international production in the country. For instance, the country is still being faced by weakening rand that still trades as lows as 14R per dollar. On the other hand, it has proven to be so difficult for the government to provide financing solutions to the foreign investors. It thereby poses as a major challenge for the foreign investors.
Supply Chain Challenges in SA:
In procurement and Logistics, there are numerous challenges present if a foreign investor in the country, attempts to sell their given products to countries outside the market. The utmost problem mostly relies on the type of transportation being used. In the country, road transport is the most common method of transportation being used (Stephen et al., 2010). Any mass media company requires the use of roads in ferrying of the workers mostly the field reporters. However, it is not the case since the cost of using roads is generally costly. Poor skills as well as to low level of technology is another factor that affects the overall supply chain in the country. A comparison between South Africa and the countries belonging to BRICS portrays a trend in which SA has got large number of unskilled personnel.
Comparative advantages:
Regardless of challenges including political instability, health issues and shortage of infrastructure, South Africa is till known to be a country that attracts several investors. The comparative advantages of investing in this country include the availability of predictable as well as to stable organizations. It also takes into consideration the heightened freedom given to the press. In addition, investing in South Africa is much advantageous in regard to the availability of stable government that is governed by much a respected constitution. In summary, it is a country that is much easier to conduct business between foreigners as well as to the local consumers.
Recommendations:
From the given information as already mentioned above, I would highly recommend Comcast to expand its overall market in South Africa. First, the country boasts of having an able economy. It is evident in relation to the nature of diversity in terms of the much investment as evident in the industries (Johannes et al., 2010). Similarly, the country’s government has put into place various bills that endorse the learning of skills and trainings to most of the individuals. Through this, there is much likelihood of obtaining competent workforce in the market. The country also boasts of entailing a very aggressive labor costs. In addition, we should never forget the much developed infrastructure in the entire country. In conclusion, investing in South Africa by Comcast Mass Media Company is the best choice they will ever make.
References
Cathy Clark, Jed Emerson, Ben Thornley., (2015)., The Impact Investor: Lessons in Leadership and Strategyhttps://books.google.com/books?isbn=1118860810
Challenges of the engineering skills shortage: A perspective on the professional scene – SAAE International worskop – University of Pretoria – March 2008
Efficient Group ( Sub-source: World Development Indicator Database, Human Development Report, 2006)
Johannes W. Fedderke, eljko Bogeti., (2010). Infrastructure and Growth in South Africa: Direct and Indirect: https://books.google.com/books?id=lZvJ-uIYgzQC
Stephen P. Rule, Chris Sibanyoni., (2012). The Social Impact of Gambling in South Africa: An Initial Assessment, https://books.google.com/books?isbn=0796919712
Theodor Baums, Richard M. Buxbaum, Klaus J. Hopt., (2013) Institutional Investors and Corporate Governance https://books.google.com/books?isbn=3110136430
