follow the requirment
Section 2 – Assessment
The assessment example(s) below can be used by centres, or alternatively centres can develop their own assessment.
Assessment 1
Outcome covered 1 and 2
Assessment instructions
This is an open-book assessment your task is to prepare an extended response to each of the questions at the end of the case study (Huzhou Piano Co Ltd).
In preparing your response you should first read the case study, which provides background information about the organisation.
You are expected to show both your knowledge and understanding of the subject and be able to apply what you have learn to the case study.
Read the following case study carefully and answer the questions that follow.
Case study – Huzhou Piano Co Ltd
Huzhou Piano Company Ltd is a modern manufacturer, whose specialty is acoustic upright and grand pianos. The company was established in 2000 in Huzhou city, Zhejiang province, which is a centre for piano manufacturing and well-known as the piano town of China. With this advantaged location, the company has a read source of good quality piano materials and experienced workers.
The company has grown into a medium-sized piano manufacturer with annual production of over 4,000 upright pianos and over 300 grand pianos. It now has 130 employees.
As well as achieving both local and national Chinese quality certification, the company achieved International certification ISO 9001, and the production process strictly adheres to this international quality system.
The product range includes upright and grand pianos to meet the requirements of different users such as families, schools, bars, hotels and stages. Overall there are over 40 product types depending on model, colour and style of piano. Their products are sold through specialist music retailers and department stores, as well as direct to commercial organisations.
Huzhou Piano Company Ltd is well managed, with low overheads and operating costs. Unlike some of their competitors, it has only a modest advertising budget, which has allowed them to offer good value products at very competitive prices. The majority of their models are budget models which account for the largest segment of the market.
In the last 10 years, the company’s sales have grown substantially each year as a result of the rapidly growing popularity of plans in China. However in the past three years, sales growth has slowed. This is due to a number of factors, such as increased competition in the domestic market, a growing trend towards better quality imported pianos among higher income families; and increasing competition from digital pianos which are considerably cheaper than traditional pianos. It is expected that in the coming years the domestic market will get even more competitive and this will put greater pressure on profit margins.
Huzhou Piano Company Ltd has not actively promoted any of their piano range outside of China; however it has sold a small percentage of its piano production overseas – but only in response to direct enquiries. Their Chief Executive Officer believes that now is the right time to look at international markets as the US and European economies start to recover. He also believes that emerging markets, such as India and Brazil, could possibly follow the Chinese example and experience higher than average demand for pianos as their economies grow and living standards rise.
1
Explain and justify the reasons why Huzhou Piano Company Ltd is considering entering international markets.
2 Describe a minimum of two sources of information that Huzhou Piano Company
Ltd should access before deciding which international markets to enter.
3 (a) What are PESTEL factors and why are these important when considering opportunities and threats of entering international markets?
(b) Using three PESTEL factors, explain key opportunities and threats that Huzhou Piano Company Ltd should think about when considering entry into international markets.
4
Explain a process that Huzhou Piano Company Ltd could use to select which international markets) to enter.
5 Explain the different modes of international market entry available to Huzhou Piano Company Ltd, identifying the advantages and disadvantages of each method.
6
Explain which method of international market entry would be most appropriate for Huzhou Piano Company Ltd, clearly identifying the criteria you have used in making your choice.
