Determinants of Entry into New Market-Case Study

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Determinantsof Entry into New Market-Case Study

Determinantsof Entry into New Market-Case Study

Watanyiaregression model

Variables Entered/Removed

Model

Variables Entered

Variables Removed

Method

1

expenses, income

.

Enter

a. Dependent Variable: profits

b. All requested variables entered.

Model Summary

Model

R

R Square

Adjusted R Square(R2)

Std. Error of the Estimate

1

.997

.994

.989

1654776.438

a. Predictors: (Constant), expenses, income

ANOVA

Model

Sum of Squares

d.f.

Mean Square

F

Sig.

1

Regression

986143390324907.000

2

493071695162453.500

180.066

.006b

Residual

5476570120182.250

2

2738285060091.125

Total

991619960445089.200

4

a. Dependent Variable: profits

b. Predictors: (Constant), expenses, income

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

-7863725.553

21622741.521

-.364

.751

Income

.666

.045

.882

14.849

.005

expenses

-.660

.186

-.211

-3.552

.071

a. Dependent Variable: profits

Lety=profits, x=income and z=expenses, therefore from the table abovey=B+0.882x-0.211z, this implies that the level of profits generatedby Watanyia company is determined by 0.882 of the income and -0.211of the expenses. From the table adjusted R-squared (R2)is equal to 0.989 calculated in percentage form as 98.9% this meansthat 98.9% of the determinants of profit (y) are explained inincome(x) and expenses(z) leaving only 1.1%to be explained by otherfactors e.g. location, preference and political factors. Watanyiacompany constantly made negative profits (-y) this implies that atany one particular time the level of expense (z) exceeded the levelof income (x) generated by the company. Expenses of Watanyia Companyincreased because over the year’s i.e. 2009, 2010, 2011 the companywas concentrating on making advertisements and selling its name. Thisis reflected on the constant increase in the number of subscribers’from 110,835 in 2009 to 464,964 in 2011 (Speakman&amp Rysova, 2015).&nbsp

This,therefore limits Watanyia company in opening a new firm in Gaza Stripas it would concentrate more on advertising its company thereforemaking negative profits, or losses and this as seen in previousyears, has made a significant impact in loss of shareholders from2009-2011. Therefore, due to establishment of Jawwal/Paltel Companyin both West-Bank and Gaza Strip, Watanyia Company should not open anew branch in Gaza Strip as it relies more on income and expenses tomake profits which has progressively made adverse losses.

Jawwal/PaltelRegression models

Variables Entered/Removed

Model

Variables Entered

Variables Removed

Method

1

expenses, income

.

Enter

a. Dependent Variable: profit

b. All requested variables entered.

Model Summary

Model

R

R Square

Adjusted R Square (R2)

Std. Error of the Estimate

1

.665

.442

-.116

4256.519

a. Predictors: (Constant), expenses, income

ANOVA

Model

Sum of Squares

d.f.

Mean Square

F

Sig.

1

Regression

28707416.851

2

14353708.425

.792

.558

Residual

36235902.349

2

18117951.175

Total

64943319.200

4

a. Dependent Variable: profit

b. Predictors: (Constant), expenses, income

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

T

Sig.

B

Std. Error

Beta

1

(Constant)

25263.794

58613.500

.431

.708

Income

.542

.435

2.069

1.248

.338

expenses

-.484

.428

-1.874

-1.130

.376

a. Dependent Variable: profit

Lety=profits, x=income and z=expenses, therefore from the table abovey=B+2.069x-1.8741z, this implies that the level of profits generatedby Jawwal/Paltel company is determined by 2.069 of the income and-1.874 of the expenses. From the table adjusted R-squared (R2)is equal to 0.116 calculated in percentage form as 11.6% this meansthat 11.6% of the determinants of profit (y) are explained inincome(x) and expenses(z) leaving only 88.4%to be explained by otherfactors e.g. location, preference and political factors.Jawwal/Paltel company constantly made positive profits (+y) thisimplies that at any one particular time the level of expense (z) wasless than the level of income (x) generated by the company (Dobbin&amp Baum, 2014).

Fromthe above regression model, Jawwal/Paltel Company does notsignificantly rely on income and expenses to generate profit as theyonly make 11.6% of the dependent variable. Therefore it’s difficultto reduce the dominance of Jawwal/Paltel Company in both West-Bankand Gaza Strips as many of the determinants of its profit making arenot captured in the data. Some of these factors include reducedadvertisement, large shareholders and equally less tax paid to thegovernment. Therefore for Watanyia Company to compete Jawwal/PaltelCompany in future it should reduce is induced expenditure termed asexpenses (Dobbin&amp Baum, 2014).

References

Dobbin,F., &amp Baum, J. A. (2014). Introduction: Economics meets sociologyin strategic management.&nbspAdvancesin strategic management,&nbsp17.

Speakman,J., &amp Rysova, A. (2015).&nbspTheSmall Entrepreneur in Fragile and Conflict-Affected Situations.World Bank Publications.