Marketing Theories for BYD’s Expansion to Northern Europe
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Which product models are you going to introduce to your new market? In which order?
You maximize sales when you have a product in each PLC phase
Marketing in a Global Context
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Marketing in a Global Context
Section A
Introduction
This section focuses on four primary things, including the selected global region, Northern Europe, rough market screening, market ranking process, and fine market screening. BYD Company Limited is the multinational corporation that will be discussed throughout this report. The firm was established in 2003 and is headquartered in Xi’an, Shaanxi Province in China. In particular, its offerings are rechargeable batteries, buses, trucks, electric bicycles, cars, forklifts, plug-in hybrid, and electric vehicles. This report applies several marketing theories, namely SWOT analysis, PESTEL, SOSTAC, customer segmentation, VALS, and MOSAIC frameworks, which will facilitate BYD’s expansion to Northern Europe.
Global Region (Northern Europe)
Some of the countries in Northern Europe are Denmark, Sweden, Norway, Finland, Latvia, Lithuania, and Estonia. The three primary countries that BYD is considering to select the specific one where it should enter include Sweden, Denmark, and Finland. The table below shows population and gross domestic product (GDP) of Sweden, Denmark, and Finland based on Worldometers (Worldometers, 2023). In addition, it will be followed by a map showing the three primary nations that will be focused on throughout this paper. As can be seen from Table 1 and Figure 1, Sweden, Denmark, and Finland have a significant population and GDP. BYD should focus on the best country to enter based on various marketing theories.
Table 1
The Population and GDP of Sweden, Denmark, and Finland
CountriesPopulationGDP (2021)Sweden10,639,287$635.7 billionDenmark5,923,629$398.3 billionFinland5,547,426$297.3 billion
Figure 1
A Map of Sweden, Finland, and Denmark
Rough Market Screening
Although Sweden, Finland, and Denmark are ready for electric and plug-in hybrid vehicles, BYD should select the country with a high market potential. In that light, an APM table can significantly help to evaluate factors, such as accessibility, market size, and profitability.
Table 2
APM Table Comparing Sweden, Finland, and Denmark
CriteriaSwedenDenmarkFinlandAccessibilitySwedish market is accessible, meaning that it allows imports from companies that comply with the set regulations. In 2021, the country imported cars valued at $16.5 billion from automotive firms, such as Volkswagen, Audi, BMW, Toyota, Kia, Volvo, and Nissan (International Trade Administration, n.d.).Although Denmark is accessible, the country does not have a large potential for electric vehicles. Many people prefer to use conventional cars due to the high price of hybrid and electric cars (Pavlinek, 2022). Finland does not have strict policies when it comes to welcoming foreign investments. In particular, the projected compound annual growth rate from 2023 to 2028 is expected to increase by 12.38% (Statista.com, 2023). ProfitabilitySince the majority of people are employed and the Swedish economy is strong, BYD is likely to be profitable if it enters this market. However, the primary determinant of profits will be the price of BYD electric vehicles compared to those provided by other domestic and international companies.Notably, entering Denmark might not be highly profitable, particularly because individuals have a lower purchasing power than Sweden.Finland can be more profitable for BYD than Denmark since it has good infrastructures to support electric and hybrid vehicles, such as numerous charging stations. Market SizeSweden has a significant market for electric vehicles. People are turning to these types of cars to reduce the emission of greenhouse gases.Denmark has a significant market, but it is about half that of Sweden. Specifically, the population size of Finland is around half that of Sweden.
Market Ranking Process
The market ranking process is essential since it uses various criteria to rank different regions or countries to evaluate their suitability for a specific company’s products and services (Lecture 3, 2023). In this case, BYD will use the market ranking process to evaluate its competition and attractiveness. The table below portrays the ranking of Sweden, Denmark, and Finland markets. Based on the market ranking process shown below, the total scores for market size, growth, ease of market entry, and internal considerations are 31(8.1), 25(6.2), and 19(4.8) for Sweden, Finland, and Denmark, respectively. When it comes to product fitness to the market, ease of doing business, needed resources, and obtainable market share, the total scores are 31(8), 26(6.6), and 21(5) for Sweden, Finland, and Denmark, respectively. In that light, the most appropriate market for BYD products is Sweden.
Table 3
The Ranking of Market Attractiveness of Sweden, Denmark, and Finland (Scoring: 10=extremely attractive and 1=extremely unattractive)