Assessment Of Alpha Response Technological Company - Samples

Question: Discuss about the Assessment Of Alpha Response Technological Company. Answer: Introduction The following report is an assessment of Alpha Response Technological Company venturing the laptop market in Rwanda. Alpha response technological Company (ARTS) is a Taiwan based technology firm and is looking forward to launching it laptops in Rwanda. Rwanda is country located in Central East Africa. Rwanda like other developing countries is having progress in terms of technology and society. The Rwanda laptop market is dominated by Positivo BGH who will be the main competitors of ARTS Company. The report will assess Rwanda using PESTLE Analysis, discuss foreign investments, and apply 5 forces analysis to show opportunities in the Rwanda market. The report will also outline the incentives that are available when entering the Rwanda Special Economic Zone. PESTLE Analysis Factor Analysis Political Rwanda is politically stable after 1994 Genocide. Economic Economy is managed by National Bank of Rwanda. 90% of the population works in Agriculture sector. The country currency is Rwandan franc. Per capita GDP is $2090 Rwanda has a free market economy. Industrial sector contribute 14% of GDP while agriculture 32% Technological There is 4G internet connection ICT has been incorporated in the education system Environment The government has designated special economic zones for companies. Social culture Rwanda has a population of 11262564 people The population is young making 53% aged 16-64 of the total population. Rwanda is densely populated with 445 inhabitants/km Tertiary education enrollment is 8%. Literacy rate is at 71(those that can read and write) Education is provided by government through public school to secondary level. The society is still recovering from the 1994 genocide Legal environment Companies need to get licenses before starting to make laptops in Kigali Incentives in Rwandan Special Economic Zones The economic zones are regulated by Special Economic Zones Authority of Rwanda(SEZAR). SEZAR works to ensure that the operations of the Special Economic Zone are in line with the countrys infrastructure, social, and fiscal policies. The economic zone has several incentives that are aimed at attracting foreign investment to the country. The incentives to enter Rwandan Special Economic Zones are; first, the firm gets access to storage facilities. Second, the firm is able to get reliable utilities. These include water, sanitation and power. Third, the economic zone has offices that are accessible to firms operating tin the area and therefore there is no need to construct one. The zone also offers off site and onsite roads links to main roads and the airport. In addition, firms operating in Special Economic Zones are able to get reduced tariff and customer duties. Current Foreign investment in Rwanda Rwanda economy has experienced the a high economic growth of 8.8% GDP on have for the past 10 years. The economy has both stable exchange rate and inflation rate. The GDP growth has been rated the highest in Africa. Rwanda was rated as the most competitive place in East Africa to do business and third in Sub Saharan Region. The foreign investment rate is 25% of the GDP. Currently, the country has a good business environment is facilitated by Special economic zones. The country also has cheap labour. The government has set ICT parks are serves to equip the young generation with ICT skills. ARTS Motivation to enter Rwandan Market The ARTS motivations to enter the Rwandan market are; first, the Rwandan market has cheap manufacturing labour. This will enable the company lower it cost of production and hence be able to offer competitive prices in the market. Secondly, the Rwandan market has tax incentives and therefore enabling the business to operate in a more business friendly environment. Thirdly, there is only one major competitor who the company believes they can beat in the market. Positivo BGH is viewed as weak because they took ARTS designs. Lastly, the company considers producing in the Rwanda because there is western emotion still in the Rwandan society against western countries and therefore would like to buy more from locally produced laptops in the market. 5 Forces Analysis Forces Analysis Threats of new entrants There are no barriers to industry entry. The ARTS have faced with high treat of new strong competitors entering the market (Hill,Jones, and Schilling, 2014). Bargaining power of customers There are many customers in the Rwandan market and therefore customers have low bargaining power (Jameson, 2007). Threats of substitute Close substitutes of laptops are tablets and other smart phone devices. These products threat the prosperity of the laptop business. This is because they are more portable and affordable (Peppard, and Ward, 2016). Powers of suppliers ARTS Company has access to many suppliers around the world rendering it suppliers to have low power over the company. The company can dictate prices of it raw materials. The Rwandan labour unions are not in solidarity to bargain for high pay (Yunna, and Yisheng, 2014). Industry rivalry The main competitor in the market is Positivo BGH. The industry rivalry will be high (Grundy, 2006). Comparison between ARTS and Positivo Primary Product Lines ARTS Primary line GT80S Titan SLI 18.4in Core i7 Notebook Positivo BGH Primary Product line Serie FX 1000 Intel i7 6920HQ CPU Intel Core M-5Y10c NVIDIA GeForce GTX980M graphics in SLI Incorporated Intel HD Graphic 5300 32 GB DDR4 memory 4GB Super Raid 4 512GB Solid State Drive - 1TB hard drive 128GB 18.4in Full HD anti glare display Mini HDMI Killer Gigabit LAN WLAN 802.11 b/g/N Dynaudio 7.1 Audio Realtek ALC269Q Bluetooth 4.2 - 1* HDMI Mini HDMI 1* Mini Display Port - 5*USB 3.0 2* USB 3.0 1*USB Super Port Type -C Quantitative analysis Rwandan Market Western Market Price AUD 4999/ Franc 3000012.82 AUD 4999/ franc 3000012.82 Costs Raw materials AUD 2020 AUD 1840 Labour AUD 560 AUD 1540 Other expenses AUD 1420 AUD 1020 Gross profit AUD 999 AUD599 Recommendations From the analysis of this report, the Rwandan Market is favorable and has high returns compared to western market. The company will be able to get high returns in the market. Though the initial cost and raw material costs are high the labour is cheap. The company benefits from cheap labour. The company should therefore invest in the Rwandan market. Conclusion From the report, Rwandan business environment is favorable. The Pestle and 5 forces analysis shows that the market has an opportunity for growth. The government of Rwanda has incentives for foreign investment that makes it easy to operate in the country. There are few competitors and the ARTS product is superior to Positivo BGH. The company will also benefit from high returns in the Rwandan market. References Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university press. Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic Change, 15(5), pp.213-229. Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning. Jameson, F., 2007. Late Marxism (p. 214). Verso. Lee, H., Kim, M.S. and Park, Y., 2012. An analytic network process approach to operationalization of five forces model. Applied Mathematical Modelling, 36(4), pp.1783-1795. Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley Sons. Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in China: Applying Porters five forces and scenario model. Renewable and Sustainable Energy Reviews, 40, pp.798-805.