Russian market

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Most of the Foreign Firms Operating in the Russian market are achieving their goals in this market, because of the in the domestic field there is great consumption boom. For example if we take some of the Foreign Investors like PCL(Pneumatics Components Limited) since PCL entering in the Russian market and their sales in the field of Tire Gauge sector(Tyre Shop/Automotive Sector) reached from 2007 to 2009 are :

Russian Sales:

2007 - 0

2008 - £16k (Tyre shop/Automotive)

2009 - £15k (Tyre shop/Automotive)

PCL started the business in Russia in 2007 and studied the market. But, from 2008 it started supplying its tyre gauge product to the Russian market which earned the income of £16k in the tyre shop/automotive sector. Even in the financial crisis, 2009 the sales of PCL were £15k. By this mean that the One of the Top rated Companies like PCL is showing their potentiality in the Russian Market in spite of the sales in the year 2009 gone down to £1k even then it maintained it strength in natural gas and oil sector.

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SWOT Analysis:

SWOT enables an organisation to come up with the key issues in turn helps in planning and organising the market trends. Therefore, Air pressure companies like PCL (Pneumatics components Limited) have to look into several factors which might be the Internal as well as the External Factors (marketingteacher.com)

Internal Factors:

  • Strengths

  • Weakness

External Factors:

  • Opportunities

  • Threats

Internal Factors:

Strength: A big company like PCL will always look at its internal environment that by promoting sales in the Russian market. It see that who are the expertise in this market, who is having complete knowledge of the Russian Market so that PCL can produce a new and innovative products in the Russian Market according to the People's demand. PCL as a big business giant, it mainly concentrates on the big cities of Russia like MOSCOW where it can supply the Petrol station forecourt equipments must be preferably in the Russian Language or in English language. For this PCL has to look from the internal point of View. It has been estimated that Russia will be one of the net exporter of electricity to the neighbouring states central and eastern Europe power generation its estimated terawatt hours (TWh) in the year 2008 was 2,111 terawatt per hour, which has gone up to 2.9% increase during a year CEE power generation was an estimated 2,111 terawatt hours (TWh) in 2008, representing an increase of 2.9% over the previous year. This is also helpful for the PCL because it will provide the quality and quantity products with very reasonable energy supply which will helps the distributors as well as the customers. Which in turn helps the PCL to increase its sales and if the sales increase it automatically increases the profits.

Weakness:

In every Organisation how powerful is the organisation is or how reputed the organisation is it might some or the other weaker point as such this might be in Russian market for example, PCL might produce some undifferentiated products such as if PCL supply the Tyre Gauge Products which might be the taste of the Indian Customers, and it is not performing well in the Russian market than it weakens the sales of the PCL in the Russian Market. Same in the case of the if there is a lack of marketing Expertise in the Russian Market such as if the Manger who are expert and having the market knowledge but some other competitors might take this opportunity and copy the same product which also result in the duplication of the product which is the weaker point for the PCL and also for the Russians because they might buy the cheapest air technology produced by some other manufacturer which looks like the products which are being manufactured by the PCL . in Countries Like Russia PCL should take all necessary steps in order to make duplications of the product. (marketingteacher.com)

Opportunities:

Opportunities means that how the market is developing by time to time by taking certain factors in the mind such as how to enter in the market by Merger, Acquisition, strategic alliances, joint venture etc. if the Market is completely new than it means there is lots of opportunities for a new entrant to establish its position in the Market by improving profits.

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For PCL one of the great opportunity is that Russia has the large market with more than 150 Million People live there , and the people decides amongst themselves which is now the Market Economy previously it was the USSR the state decide. This is now the consumer decide which product they can buy which also helps the PCL to produce differentiate products and which will also helps the economy to grow at a faster rate. as PCL also produce different range of Air Gauge products so that the people have different choice almost themselves to choose. One more opportunity for the PCL which it can make use of the Countries Natural Resource like Oil, gas, coal this is because of this natural resource which helps the PCL to produce more products and moreover the Airguage products like Air compressors, Forecourt designs are used in the field of oil, fuel and gas sector. In this way PCL can expand their business opportunities. (Free-essays-free-essays.com)

Threats:

A threat might be in the form that a new competitor might enter into the Russian Market and it might find the same distributor as the PCL does and they try to establish their market trend in the Russia .in relation with the distribution channel in Russia the price of the Air Gauge products of the other company which made an entry in the Russian market might be Lower while compare to the PCL or the Price wars. The New entrant might have the various channel of distribution channel in the Russian market which might be a threat for the PCL.

There is a Norwegian Oil and Gas Company which already exists in the Russian Market from 1993 called Statoil. But it operates only in the few regions of Russia such as the Murmansk, Leningrad and Pskov regions, still not in the big regions like Moscow. But it is still a Threat for the PCL Because the Main aim of this Norwegian Oil and Gas Company is to become one of the leaders in the Petrol equipment products utility rooms and wants to be the leader in the Fuel Market in North West Russia.

This Norwegian Oil and Gas Company might result bit more threat for the PCL because it has also opened the convenience stores, Café Carwash, Service Garages and ATMs as well because PCL is also expertise in Carwash sector and convenience store as this company for Norway might creates threats to the PCL.

Norwegian company along the Universal Developed Projects Team wants to establish its hold in the Russian Market with the Air Technology Products mentioned below.

  • Entry and exit from petrol station grounds;
  • Fuel pumps;
  • Rear of the petrol station;
  • Forecourt with air compressor;
  • Convenience store retail area;
  • Points of sale;
  • Storage facilities;

(www.axxonsoft.com) & (marketingteacher.com)

The foreign Firm who do business in Russian Market might face plenty of challenges Like The officers are corrupt in all level of the management, Political violence has been increased in Russia since 2006, the crime rates has grown, carders and bet herders have been grown more advanced they are the experts in generating the most sophisticated tools for stealing the personal information basically from the western companies. Even the political economy of the Russia is also uncertain and can create more hurdles in the economy because the end of the Russian President Putin's term coming to an end. On the whole any international firm (especially western firm) should take into consideration that a well established companies like PCL should be aware that all these factors might cause trouble and might loose its reputation and goodwill in the Russian Market. Because PCL is almost successful in every country their Air Technology Products have both quantity and quality assured. But the Main threat for the PCL is that Political system of Russia is also not well established most of the officials are corrupt which might create problems not only to PCL but also to the other Western Companies. (Eli Jellenc & Kimberly Zenz., 2007)

Conclusion:

On the whole we can say that the SWOT analysis helps an organisation within the external factors as well as the internal factors so that it can made necessary changes in and around the Organisation (PCL). Therefore, all these factors cannot be avoidable who is making an entry or already entered one of the developed markets like RUSSIA.

References:

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Eli Jellenc & Kimberly Zenz. (2007). Global Threat Research Report: Russia. Available: http://www.verisign.com/static/042139.pdf. Last accessed 29 January 2010.

Intellect is providing security for the expanding network of Statoil petrol stations in Russia. (2009) Available: http://www.axxonsoft.com/case_studies/retail/statoil_com/. Last accessed 27 January 2010.

Kari Liuhto. (2007). A Future Role of Foreign Firms in the Russian strategic Industries. Available: http://www.europe2020.org/spip.php?article404&lang=en. Last accessed 20 January 2010

Russian opportunities. (2005). Available: http://www.free-essays-free-essays.com/dbase/2b/bmu370.shtml. Last accessed 30 January 2010.

SWOT Analysis: Lesson. (2010) Available: http://www.marketingteacher.com/Lessons/lesson_swot.htm. Last accessed 28 January 2010.