The company’s strategy is simple and that is to focus on customer service and operational excellence to strengthen their business. They have four crucial elements to support their strategy. First are their people, since they believe that people and human resources are of prime importance to any businesses success. Second is performance management, since they have set the “best in class” gold standards to achieve excellence in performance. Third is their technology and service infrastructure, since they aim to improve the infrastructure to reduce cost and time in order to focus more on customer satisfaction. Lastly, is efficient allocation of capital in order to make good use of growth opportunities. Their strategic priorities are to strengthen their existing core business and expand in potential markets (Wright, 2006).
Inchcape shall enter the automotiveindustry inChinawith the aim of producing on low costs and high profit margins. The corporate governance code of China poses a majorbarrier to the entry of the company in the Chinese market. The company can either enter a joint venture or most preferably, Inchcape can take over a state owned organization going into a loss which will allow the company to reap the benefits of operating in the largest automobile market of the world. This strategy will help them avoid import taxes, it helps them enjoy reduced transportation costs, they can use cheap labor and this way they can gain access to raw material as well. This way they can achieve competitive advantages and also that they will get support from the acquired company in increasing their market share. The benefits are many which include lowest costs that help incur economies of scale, to cater to the largest automobile market of the world and immense growth opportunities with the appropriate strategy to enter the market. The corporate governance code of China can pose hindrances yet the benefits are great if the mode of entry is appropriate (Wright, 2006).
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