Executive Summary
The purpose of this assignment is to examine how organizations respond to these challenges, issues, or trends in SDGs in the domestic and international markets. The company that was selected for the assignment is Nura Company in Australia. One of the key trends the company is facing is how it can ensure sustainable consumption and production patterns through organic electronics. With this focus, the company needs to expand to China by establishing main office at Shanghai city. This analysis found that China has a growing market for consumer electronics. However, the focus on eco-friendly consumer electronics is still lagging behind. Nura Company is technologically and financially fit to venture in this market. Therefore, the report recommends that the company should invest in the country.
Table of Contents
2.0. Current Situation Analysis (Domestic Market) 2
2.1. Market Customer Situation. 2
3.0. Destination Market Analysis (International Market) 7
3.2.2. Points of Difference. 10
3.3. Market Customer Situation. 10
3.4. Market Situation in China. 11
3.5. Opportunity Identified. 12
3.6. Market Attractiveness. 12
4.0. Adaptation vs Standardisation. 13
4.1. Revised Marketing Mix. 13
5.0. Conclusion and Recommendation. 16
1.0. Introduction
Sustainable Development Goals serve as blueprints that allow countries and organizations to achieve a better future for all. The goals address some of the major challenges that people face such as inequality, poverty, climate change, peace and justice, and environmental gradation. The purpose of this assignment is to examine how organizations respond to these challenges, issues, or trends in SDGs in the domestic and international markets. In this case, the company chosen for this analysis will be Nura Company, which is an electronic company located in Australia (Levitzke, 2020). The company has been facing one of the key sustainability trends arising from the UN SDGs to ensure sustainable consumption and production patterns. For this, the company has been focusing on producing organic electronics that are eco-friendly and biodegradable to increase awareness of sustainable development. Despite the focus, Nura Company is also seeking to expand its production to foreign countries (Nura Company Insights, 2021). This assignment will determine the best location that the company can expand to.
2.0. Current Situation Analysis (Australia)
2.1. Market Customer Situation
Nura Company is one of the consumer electronics companies that is based in Melbourne, Australia. The company was founded in 2015 by Dr. Dragan Petrovic, Kyle Slater, and Dr. Luke Campbell (Levitzke, 2020). It operates in the personalized Audio Technology industry and has been designing and manufacturing headphones with personalized sound technologies. One of the major products that the company designs are the Nuraphone, which is a headphone that personalizes sound by measuring ear responses to various sound frequencies (Nura Company Insights, 2021). Other major products that the company designs include Nuraphone/G2, NuraLoop, Nura True, and NuraBuds.
Currently, the company operates in Australia, where most of its operations are headquartered. The company officially began its operations in the country in late 2017 to give the general public access to its Nuraphone. It has about 10 different store locations across the country and is earning about $22 million in annual revenue from the sale of its products (He et al., 2019). One of the key objectives of the company is to expand its market share and increase its customer base. It has been considering international expansion in various countries with attractive markets for its earphones (Nura Company Insights, 2021). The two attractive countries with considerably attractive markets for the company include China and Japan. The following table shows the reasons the two companies offer attractive markets for Nura Company.
Table 1.1: Geographic Locations Considered for Nura Company
|
Country/Considerations |
For |
Against |
|
China |
The country has a complete and cost-effective ecosystem for electronic components. The company also has a lower cost of manufacturing (Nankervis et al., 2021). Additionally, the country value innovation and has the highest demand for electronic products with one of the largest populations. |
Currently, there is an ongoing shortage of electronic components and long component lead times (Nankervis et al., 2021). It lacks supply chain visibility. |
|
Japan |
Japan values innovations and there are various high-end electronics such as Sony originating from it. It also has a high demand for electronics with huge consumers (Shibata, 2022). |
Currently, there is a rising value of the Japanese Yen, making products more expensive (Shibata, 2022). Research and Development in the country are not fast enough. |
Based on the table, the declining Japanese Yen could be a major threat to Nura Company if it were to expand its operations in the country. Besides, China has a huge population (1.4 billion people) than Japan (126 million people), meaning that its market size is large (Ogunmakinde, 2019). Additionally, China is doing greater in terms of electronics sales than Japan. In terms of revenue, the consumer electronics market in China is valued at $252 billion against $37 billion in Japan, and the market is expected to grow by 2% in the next five years (Nankervis et al., 2021). In Japan, the earphone or headphones market segment generates $0.8 billion in the national GDP, and the market is expected to grow by 0.82% in the next five years.
However, most of the revenues from the sale of earphones or headphones are generated in China, meaning that China has a high demand for the products. In China, the earphone or headphones market segment generates $3.8 billion and the market is expected to grow by 2.9% annually (Li & Yang, 2022). Globally, China is also considered the best source of earphones, headphones, or headsets. Because of the high demand for consumer electronics (particularly earphones or headphones) in China and Japan, China has a more attractive market for Nura Company’s expansion (Nura Company Insights, 2021). Particularly, the chosen city for the company will be Shanghai because of its high population. This city is the best in terms of infrastructural development with high cultural indexes. It is among the top three in terms of technological innovation and financial hub talent.
2.2. Internal Analysis
Nura Company has been making some of the best wireless earbuds with personalized sound technologies. It integrates unique software technologies that automatically measure hearing patterns and perfectly adapt some music. As the leading headphones and earphone designer in Australia, the company’s brand mission is to revolutionize how customers experience music and disrupt an industry dominated by global giants (Banes, 2022). About goal 12 of UN SDGs, Nura Company is focusing on designing cost-effective, indissoluble, flexible, lightweight, and optically transparent devices that consume low power. Particularly it focuses on designing organic devices that are eco-friendly to enable it to achieve its mission.
Nura Company is currently providing lossless audio alongside its patented Personalized Sound technology. It personalizes users’ experiences by measuring their hearing patterns and establishing a personalized EQ. With the combination of organic technologies, Nura Company's focus is to ensure an unrivaled audio experience (Levitzke, 2020). The rise in awareness of sustainable development has increased the company’s focus on eco-friendly manufacturing by opting for organic electronics. The company is currently designing devices with microbial components to produce earphones and headsets with recyclable and biodegradable materials. These skills have been enabling the company to use safe, fewer, and scarcely available raw materials in the country. This way, it creates more opportunities for other companies, giving them a more competitive edge.
2.3. Consumer Situation
The following table shows the customer situation for Nura Company in Australia
Table 1.2: Customer Segmentation of Nura Company in Australia
|
Segmentation Base |
Analysis |
|
Geographic |
Nura Company targets customers living in Australia (Nura Company Insights, 2021). |
|
Demographic |
Nura Company targets customers between the age of 19 and 35. These customers come from medium to high economic classes (Nura Company Insights, 2021). |
|
Psychographic |
Nura Company mainly targets music lovers, everyday listeners, gamers, and music and audiovisual professionals (Trade & Investment Commission, 2018). |
|
Behavioral |
The company targets customers who are frequent buyers of electronic devices such as phones (Trade & Investment Commission, 2018). |
2.3.1. Customer Profiles
Table 1.3: Nura Company’s overall customer profiles
|
Products and Services |
Demographics |
Customer Benefits |
Customer Pain Points |
|
Customers use their mobile devices to listen to music or gaming |
Customers are located in Australia, are between the age of 19 and 35, frequently buy electronics or play games, and are from the medium to high-income class (Nura Company Insights, 2021). |
Personalize audio experiences and eco-friendly devices |
Poor audio quality in some earphones |
2.4. Market Situation
Currently, Nura Company mainly operates in Australia with over 10 different store locations in the country. Within the country, the country, the company targets different market segments as shown in the table below.
Table 1.4: The 4 Bases of Market Segmentation for Nura Company
|
Bases of Market Segmentation |
Analysis |
|
Geographic |
The company targets those living in the cities and towns of Australia |
|
Demographic |
Mainly, it targets those with medium and low income |
|
Psychographic |
The company targets gamers and music lovers |
|
Behavioral |
The company targets frequent shoppers who need high-quality devices |
Value Proposition: Nura Company offers innovative and personalized sound technology to revolutionize music experiences.
Distribution Strategies: Nura Company has various store locations within the country. It also has online retail platforms where customers can order its products.
Market Entry and Access: There are more barriers to entry in the Australian consumer electronics market. Some of these barriers include research and development, economies of scale and scope, capital-intensive production, and brand loyalty.
Product Situation: The actual product sold by Nura Company is Nuraphones. These products allow users to have personalized sound while listening to their music, making the core product part of the company (Polfuß & Sönmez, 2020). The augmented products offered by the company are eco-friendly devices with recyclable packaging. The focus is to ensure sustainable consumption of these consumer electronics and their production patterns to avoid environmental degradation.
2.5. Marketing Mix
Table 1.5: Marketing mix of Nura Company in Australia
|
Marketing Mix Components |
Descriptions |
|
Promotions |
Nura Company relies on advertisements, salespersons, public relations, and direct marketing strategies to market its products (Nura Company Insights, 2021). It advertises on its social media platforms such as Facebook, Instagram, and Twitter. This feature implies that it also uses an online digital marketing strategy to market its products. |
|
Place |
The company is located in Melbourne, Australia, and has various stores across the country. Despite this, it has an e-commerce platform where customers can order their products. Some of its products are also available in various malls, supermarkets, and shops. |
|
People |
The company has over 1000 employees who are skilled to facilitate its production processes. The skills and competence of the employees allow the organization to meet its goal of producing organic electronic devices to meet goal 12 of SDGs (Nura Company Insights, 2021). The company is also investing in cost-effectiveness. |
|
Processes |
The company has more sales staff involved in its promotional strategies to increase conversion (Nura Company Insights, 2021). Nura Company adopts the latest technologies that allow them to produce eco-friendly devices that are lightweight and consume less power. |
|
Physical Evidence |
With an e-commerce platform, the company is available on all social media platforms with consistent branding across communications. |
|
Price |
Mainly, the company adopts a value-based pricing strategy by relating the prices of its products with quality (Trade & Investment Commission, 2018). |
3.0. Destination Market Analysis (China)
3.1. Macroenvironment
The chosen China Market for the company’s expansion in China. The company needs to situate its business within Shanghai city. However, before investing in China, there is a need to understand the economic, political, regulatory, socio-cultural, physical, and natural environment of doing business in the country. In that case, there is a need to conduct a macro environment analysis.
Table 1.6: Macroenvironmental Analysis of the international market
|
Component |
Description |
|
Political |
Currently, the government of China implements laws to embrace eco-friendly urbanization. However, the country has excellent trade relations with other countries such as Australia (Li et al., 2022). It has proper strategies that allow it to achieve low cost of raw materials. The government is also making plans to ensure electronic companies implement organic electronics. |
|
Regulatory |
Currently, the company is formulating laws regulating e-commerce businesses. China has banned Facebook, YouTube, and Twitter, which might affect the future marketing strategies of Nura Company (Mangiaracina et al., 2022). China has more environmental laws that prevent environmental degradation from businesses. The laws are strictly enforced by various administrative agencies. |
|
Economic |
Labor cost in China is significantly low even though the inflation rate is alarmingly high. Many sectors including consumer electronics are contributing to the highly growing Chinese economy. In 2021, GDP was over $17 trillion. The wireless headphones market is seeing a 40% Y-o-Y growth (Li et al., 2022). |
|
Socio-Cultural |
China has a huge population and 90% of them are literate. The majority of these customers are concerned with environmental protection (Li & Yang, 2022). Their lifestyles are changing towards consuming only eco-friendly products. Additionally, they tend to only purchase from companies that are sustainable and produce eco-friendly products. |
|
Technical |
China has shown advancement in technological innovations. However, China has changed its mode of production, especially in consumer electronics to ensure companies are manufacturing organic electronics (Trade & Investment Commission, 2018). China is inspiring companies to concentrate on innovations that will minimize environmental degradation but ensure sustainable production patterns. |
|
Natural |
China is one of the developed countries with strict laws on natural resources. Recently, the government released a climate adaptation plan for 2035 to improve early warning systems for extreme climatic changes (Li & Yang, 2022). The country is also focused on using renewable sources of energy. In 2021, it installed a renewable generation capacity totaling to 1,063 GW 2021, accounting for 44.8% of the nation's total generation capacity (Li et al., 2022). |
|
Physical |
China is focused on infrastructural development. It has excellent roads with projects such as 5G base stations and data centers to support digital transformations (Li & Yang, 2022). Innovations are also supported by strong policies that aim to ensure the country achieves sustainable consumption and production patterns. |
3.2. Competitor Analysis
As a developed nation in East Asia, China has more companies producing headphones, headsets, and earphones. The increasing number of these consumer electronics companies is associated with the fact that China has a high demand for products (Hua, 2020). Additionally, many customers perceive that the country produces the best consumer electronics, which attracts many investors into the industry. Therefore, before Nura Company enters the market, it must be aware of these competitors and the degree of market power they have in the country. Some of the major competitors in the consumer electronics industry in the country are listed below.
- Guangzhou Tong Ke Business Co., Ltd. – Over 90% of exports and over $20 million annual output
- Huaibei Shunjiang International Trade Co., Ltd. – 50-70% exports and over $5 million annual output
- Dongguan Desheng Industrial Co., Ltd. – 50-60% exports and over $5 million annual output
- Leadmobi China Company Limited – 50% exports and over Leadmobi China Company Limited
China has a highly competitive consumer electronics industry with the majority of earphones, headsets, and headphone designers conducting over 50% of exports to other countries. Porter’s 5 forces model further indicates how this market is highly competitive. The following table summarizes the analysis of Porter’s 5 Forces of the consumer electronics market in China.
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