Expansion of operations and business is always a long-term goal for many organizations (Esteeves, 2008). The point of expansion arrives when the business is doing well and generating maximum profits. At his point, the business is at a point of growth and key strategies should be laid down to ensure successful transitions during the business’s expansion; business expansion management should be done critically to avoid any problems. The major goal that most organizations aim to achieve is the generation of more profits for their businesses via expansion. Reasons for expansion also include increasing revenue potential, entry to new markets, improvement of company reputation, and even diversification in some cases.
Comvita limited aims to expand activities across Europe; the company’s business operations in Europe currently represent a proportion on the lower side. Comvita’s expansion will inflict market dominance over various market niches if carefully and well done. The expansion would only be effective in maximizing profits if the company strives to satisfy their customers with the Production and delivery of quality goods and services to their customers; hence business expansion goes hand in hand with quality product delivery. Comvita Limited’s expansion, based on the initial key goals of the company to provide health solutions through the making of medicine products naturally, creates a defined organizational goal and hence a strategic move for expansion. All businesses that intend to prosper should consider global expansion; in the current world, technological evolution has allowed customers to choose from a wide range of their preferred products globally hence the need for expansion for the business. The expansion of Comvita limited should not be based on a global concept but rather in an imperative manner; this implies the importance that Comvita’s expansion displays for the entire organization. Several factors affect the expansion of Comvita Limited.
Financial strength
The positioning of the company’s bases across various global markets has created financial dominance due to the fast market growth. The 9% net contribution growth has been attributed to brand investment increasing by $5.65M in the period. Market center positioning for Comvita is one of the best strategies to sell its products.
Other strength
The company has been attributed to the creation of a unique product in the market; the existence of a unique product in the market is bound to attract various customers around the globe. The quality of the product also influences his.
Financial weakness
The company has generalized financial constraints when raising sufficient revenue; this implies that Comvita’s focus on New Zealand is bound to generate the most profits in the country, with the other market centers generating less. This poses a major weakness as there is no alignment in terms of overall returns.
Other weakness
Stiff competition has always posed a major hiccup with major multinational corporations. Comvita, in this place, faces major competition from honey-producing health product firms such as Davidson’s Apiaries Ltd.NZ Ltd and Honey New Zealand.
Opportunity and threat presented by the macro-economic context of France
France has been known to have a well-built economy based on the different functionalities presented by the different economic strategies and the globalization of major firms in the country. Globalization goals bring out the best in MNCs and their desire and target to expand. However, the threat associated with this is that the organization is bound to receive unmatched high tariffs as each organization in the country strives to add value and increase its revenue share.
Opportunity and threat presented by the cultural differences between New Zealand and France
France offers a better opportunity for the expansion of Comvita; as of 2019, France had an economic culture that was incorporated into spending 11.1% of its total GDP on healthcare, while New Zealand spends 9.7%. The opportunity to invest in Healthcare in France is availed. However, the threat associated is that even competitor health producing firms would be keen on the financial follow-up of the country and develop interests in expanding their operations in the country.
However, the factors do not necessarily determine the readiness of the company to expand operations. The company should have the products ready with an anticipating ready market. Financial readiness and competency readiness are the key drivers when it comes to implementing the expansion.
Analysis Infographic
PESTEL Analysis
The analysis below represents a detailed conceptualization of the different factors and how they would affect the entry and expansion of Comvita into the market; this implies that with
These factors prove to be favorable for the entry of the product; there is a likelihood of increased operations and profit generation from the company. The entry of the product and its expansion into the market guarantees extra funds for the company as it involves coming up with manageable resourceful inputs that are put to work and bringing out an output that involves the Production, and the output is therefore used by the company to maximize profit generation and provide quality services.
Recommendation
The expansion of Comvita into the country, if highly recommended as the above factors, would generate success for the company in the country and would align the organizational goals of Comvita with the maximization of profits. The company is bound to pose a stiff competitive advantage over the other companies due to the Production and delivery of quality products and services.
References
Callaghan, P. (2013). Wool to Weta: Transforming New Zealand’s culture and economy. Auckland University Press.
Esteves, A. M. (2008). Mining and social development: Refocusing community investment using multi-criteria decision analysis. Resources Policy, 33(1), 39-47.
Good, S. F. S. SO FAR—SO GOOD.
https://cdn.comvita.com/new-zealand/investor/2021-annual-report.pdf
https://www.ipl.org/essay/Comvita-Competitive-Advantage-P36GAC536J4DR
Lysaght, M. J., Jaklenec, A., & Deweerd, E. (2008). Great expectations: private sector activity in tissue engineering, regenerative medicine, and stem cell therapeutics. Tissue Engineering Part A, 14(2), 305-315.
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