Discuss about the Business in Global Context for Gross Domestic Products.
The following report is based on the strategic direction that is taken up by the different companies to establish their trade in different countries of the world. A handicraft export organization has been selected in this particular report to discuss the different elements of the report in a proper way.
Identification of the country
New Zealand is a country with a population of over 4.6 million and a global ranking of 23 for Gross Domestic Products (GDP) per capita at current rates of exchange. The economy of the country was worth around pound 140 billion in the years between 2016 and 2017. The management of ABC handicrafts has selected New Zealand as the start for the business operations and the ideal location for the expansion of the business in new markets (Hong et al. 2016).
Identification of the industry of the company
There was a time when for many years New Zealand dependent mainly on the production of farm products like wool, dairy goods and other substitutes. The country has now however kept the traditional sources of income alive along with the creation of modern and contemporary sources of business like tourism, wine making, production of films and many other such similar products (Selvanathan, Selvanathan & Keller, 2016). The handicrafts industry has seen a decent growth in the mentioned country for some years from now. The use of handicrafts by a vast majority of people and other industries has helped in the promotion of handicrafts in the country. ABC Company wants to take the most advantage of the following growth and establish their business in the following country to attain revenue (Johnson, 2016).
Identification of the goods and services that the company offers
The management of ABC Company has decided to offer a varied range of handicraft products for the market of New Zealand. The identification of the goods and services is the description of the products that are covered in the trademark application. The trademark of ABC Company limited has to be created and tied with the particular handicrafts that are to be sold in the New Zealand Market (Daniels, 2017). The application or the implementation of the particular trademark for the products of the organization will refer to the use of the particular product for which the trademark has been fixed. The management of the company must make sure to trademark the different types of the products provided by them in New Zealand. The trade marking of the different forms of Handicraft products will help the business enterprise to be successful in the new market (Reiche et al. 2016).
2*2 strategies to be offered
The BCG matrix and the decision making matrix in this particular kind of business strategy suits the following organization (Kelsey, 2015). This includes the likes of the BCG Matrix and the decision making matrix.
Entry mode to be suggested for the company
The successful market entry into New Zealand generally consists of three different strategies. This includes the likes of the;
- Understanding the strategies
- Selection of the optimal partner
- Providing the ongoing support to the following market
- The estimation of sales, market share or demand must rely on comprehensive product or technology specific market research.
- The presence of local support centers in the country is one of the main advantages for the establishment of the business in the country.
According to, Hong et al., (2016) the management of ABC Company can take the help of the local business organizations and enter into a strategic alliance with them to start their operations in New Zealand. The partnership with a local organization will provide the organization with all the logistics and internal support that will help in the establishment of the business in New Zealand.
Choice of the country
The management of ABC Company Private Limited has selected New Zealand as its primary target for expansion. The selection of the particular country was mainly based upon the internal and the external analysis of the country along with the verification for the ease of doing business in the particular country (Murray, Skene & Haynes, 2017).
Ø The presence of highly skilled labors
Ø The presence of leading local support centers
Ø English as the common language
Ø The locational disadvantage of New Zealand is one of the main weakness that can be faced by the organization
Ø The low level of interest from the stakeholders
Ø The presence of natural sea ports enables for easy export
Ø The huge demand for the handicrafts is an added advantage for ABC Corporation limited
Ø Increasing interest towards other machine made artifacts
Ø Absence of proper stores to display and sell the products
- Strengths- The presence of highly skilled labors in New Zealand along with the presence of highly skilled and technologically advanced local support centers is a huge strength for ABC Corporation Limited (Selvanathan, Selvanathan & Keller, 2016). The presence of the local support centers provides the adequate logistical support for the Company and also helps them in various other works. On the other hand, English being the local language of the country is one of the biggest strength of the company as the workforce as well as the management will be able to communicate with each other and the local population much easily.
- Weaknesses- The locational disadvantage of New Zealand is one of the main weaknesses of the organization. The location of New Zealand at the extreme south of the world makes it a difficult place to access (Schaper et al. 2014). Apart from this the low level of interest from the stakeholders is another main weakness for the organization.
- Opportunities- The Huge demand for the handicrafts is one of the main opportunities for the business. While the presence of different kinds of natural sea ports is essential for the import and export of goods and other raw materials with ease.
- Threats- The increase in the demand for machine made artifacts have reduced the demand of the handicrafts. The absence of proper stores is another major blow to the large scale ambitions of the management of ABC Company in the near future.
Concentrated or decentralized manufacturing strategy
The management of ABC Company will be choosing the decentralized manufacturing strategy for the establishment of business in New Zealand. The choice of the decentralized strategy is mainly due to a variety of reasons. The benefits will include;
- Better forecasting of the market
- Lower material costs
- Consistent production
- More amount of local jobs
- The much more effective use of the local resources that will be useful to produce handicrafts
Considerations for choosing subsidiaries
Some of the main consideration for the choice of subsidiaries includes the likes of;
- Security of the place must be considered
- Accessibility of the place must be considered. The particular place must be easily accessible for the facilitation of the easy transport
- Competition in the market
- Business rates are one of the most important considerations. The management of the company must make sure to research the business rates including rent, utility bills, taxes and other types of financial analysis.
- The skill base in the area must be considered by the management of the mentioned business. It will be easier for the business to locate their subsidiaries in areas of highly skilled artisans.
Human Resource in the modern day market is a huge challenge for the industry and the more better the Human Resource, the more better the chance for the establishment of the business. The main considerations for the HR department of the business include;
- The human resource of the company must manage the different rules and regulations in an effective manner
- The technological solutions of the business must be controlled in a better way to make the most out of the business
- The employees must follow the ethics of the industry properly
The following business report is one of the best examples that has highlighted the key strategic elements of the industry. The report has provided all the detailed strategic initiatives along with the marketing initiatives of the business. The thorough analysis of the report will help the readers to gain an efficient understanding of the different business strategies and the steps that are undertaken by them to attain quality success in a new market. Overall the report has been able to achieve the pre fixed aims and objectives.
Daniels, J. (2017). and Strategy in the Global Context. MAD Ñ KHLAPEIFM Ñ A.
Hong, S., Oxley, L., McCann, P., & Le, T. (2016). Why firm size matters: investigating the drivers of innovation and economic performance in New Zealand using the Business Operations Survey. Applied Economics, 48(55), 5379-5395.
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.
Murray, A., Skene, K., & Haynes, K. (2017). The circular economy: an interdisciplinary exploration of the concept and application in a global context. Journal of Business Ethics, 140(3), 369-380.
Reiche, B. S., Stahl, G. K., Mendenhall, M. E., & Oddou, G. R. (Eds.). (2016). Readings and cases in international human resource management. Taylor & Francis.
Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small business.
Selvanathan, E. A., Selvanathan, S., & Keller, G. (2016). Business Statistics: Australia New Zealand with Student Resource Access for 12 Months. Cengage AU.
Tsui, W. H. K., Balli, F., Tan, D. T. W., Lau, O., & Hasan, M. (2017). New Zealand business tourism: Exploring the impact of economic policy uncertainties. Tourism Economics, 1354816617731387.
Tung, R. L. (2016). New perspectives on human resource management in a global context. Journal of World Business, 51(1), 142-152.