Question

Mitsubishi Corporation plans to enter the markets of Ghana with its new Sports Utility Vehicle (SUV)-- the
Mitsubishi Sogo Sosha Model. You are the Sales Manager of Mitsubishi Corporation for Middle East and African
Markets. Prepare a report for the Board of Directors detailing the feasibility of the proposed venture. Your report
should include the following:

1.1 An analysis of the situation in the aforesaid country by using appropriate tools. (15)
1.2 Industry and its characteristics in the country. (20)
1.3 Recommended strategies and explain why they are the best fit. (10)
1.4 Implementation plans. (15)

Answer 1

Answer -

1.1, 1.2 Introduction - The market

Ghana’s Automobile sector market is expected to register a CAGR of 6.06%, where the compound annual growth rate is a useful measure of growth over multiple periods. Ghana is considered as 3rd biggest economy country, in Africa ( west ). there is expected growth in the automotive sector industry as per the forecast done by the government, the country plans to increase imports on automotive parts and the components so, it can be used in " Made in Ghana" vehicles.

Whereas, the constitution plans to reduce its corporate tax to 20-25%, which will act as a building block for the automotive sector.

The manufacturing industry of Ghana gets plenty of assistance from the local government, which makes it part of 40 fastest-growing industrial productions in the whole world. By 2021 the industry accounts for at least 30% of GDP. As the vehicle population ratio is increasing there is a direct increase in the commercial and passenger vehicles.

The market is facing continuous growth, due to an increase in purchasing power capacity of people which is basically due to domestic vehicle production and assemble. This can be explained in easy terms i.e. increase in manufacturing, employment, industrialization, and export revenues there is a growth in the market. Nearly 59% of the new vehicle market is made up of passenger vehicles.

When we talk about the competitive landscape of the country Ghana, there are some of the major players which are Toyota, Mahindra & Mahindra, BMW. whereas in the manufacture of sports utility vehicles major player is an Indian company Mahindra and Mahindra, the company have invested very heavily. The company has occupied nearly 20% of the vehicles which are imported, like XUV and Xylo.

Answer 1.3

The marketing opportunities and strategies to enter such a diverse market are to be overlooked, again and again, to tap the segments in the market which will lead to a boost in sales as well as make our product last much longer there.

A major opportunity is our consumer in any market, and most of them belong to higher class therefore the automobile sector in Ghana gives large chance for the future years. Whereas the middle class is not tapped in the country till now. The major problems in the country are there is a lack of financial aid, which is acting as the main ingredient in the slow rise sector. many people have no access to loans, and lease which is needed to own an automobile in a quickly.

There are tremendous factors that affect or they limit the trade in the country. For years many governments around the world have used certain policies to support the expansion of domestic automotive sectors that were not feasible economically. This sector has been aided by subsidies, non-tariff and tariff barriers.

The strategies to enter such markets can gain insight from the examples set by other companies, for four wheeler cars, general motors had set up its assemble plant in Egypt with headquarters in South Africa, GM has a strong growth in many other African counties too. Whereas BMW had opened plants in Egypt, the company had one thing in mind that growing demand in the country is rising, the company retained full ownership of its operations in the south of Africa.

whereas there are various strategies which can be picked which are as follows:

• Direct Exporting
• Licensing.
• Franchising.
• Partnering.
• Joint Ventures.

But, to set up a plant, in a new market will be quite expensive, the method or strategy can be used by doing partnering or joint ventures. one such example is MARUTI SUZUKI in the Indian market. the best way to enter into the markets of Africa. our company can join the local company which has a good market share and brand name.

Answer 1.4 Implementation Plans

To Implement the plans in Ghana, the organizational objectives are to be set and fixed, which is followed by product developing strategies and other plans. the selection of the proper production strategy is to analyzed and used, to be followed by which type of production process is to be used and which infrastructure strategies will be used. Finally how to implement these strategies of production in a different country.