Question

2.   20% - Is Russia a suitable home market for TCL? How does it compare with other emerging market options?

Answer 1

No; this is not suitable for the company.

The company needs to increase the market share by expanding. This is required for their survival. 20% market share is very low for this company, since it required huge establishment and fixed cost, which they must recover through an increasing market share.

Market options:

No.1) the company can tie-up with some local companies. This could be done through amalgamation, joint venture, etc. It will certainly increase the market share.

No.2) the company can franchise its products (like telecommunication, internet connection, etc.), so that the market could be spread very easily, which may not be done by the company solely.

No.3) the company may offer “penetration pricing strategy”. It charges lower price of products initially for capturing the market.