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Issues Faced by ABC Company in Global Expansion

Question:

Analyze the various Issues which are faced by ABC Company.

ABC Global is a consulting business and it had offices in many parts of the world. The aim of the company is to help the clients to achieve the goals in data management, mining operations, corporate advice, exploration and many more. This paper will analyze the various issues that were faced by ABC Company in global expansion. The solutions to these issues and problems are also highlighted in the paper. The report is a consulting report from the consultant of the company to the client. Although the company has identified certain strategic goals for expanding in other countries, but it was not considered feasible. There was steep competition in the mining industry and ABC Company had to find out solutions to overcome these problems. The international marketing director of ABC Company had several meetings and discussions with the clients and the stakeholders of the company and he tried to find out innovative solutions for further expansion of the company. The mission of the company was to gather international revenue from all parts of the world. The manager also tried to adopt all the possible measures which could be taken so as to expand rapidly in other countries and gathering international revenue in a short span of time. Though the company has adopted inefficient and ineffective means for further expansion, but the manager conducted further analysis of the company and thus found out further ways for expansion[1].

ABC Company had planned to grow their business and increase the volume of sales and profitability of the company. The company has used certain methods for implementing the growth strategies and expanding the business globally. The company has used market expansion as the growth strategy so as to sell its products in the market. ABC has adopted this strategy because there was no room for further expansion in Australia. This is because ABC Company did not find any new product or strategy so as to expand in its own country.

Change in management

Change in an organization is the ladder of growth and expansion for a company every company at one point has to go through a change in the management which can give rise to several issues within the internal as well as the external environment. According to An effective Change Management is obtained by employing a continuous and reliable strategy. Some of the challenges are resistance, impatient behavior, internal conflicts etc. These problems of the organization should be handled by using tactful strategies which should be formulated out before taking the decision of change[2].

Solutions to the Issues Faced by ABC Company

Transformational change management

Motivating the subordinates is an important job of a leader. A leader can inflict both intrinsic and extrinsic motivation among the people who look up to him or her.  In order to initiate transformational changes, a company has to go through a number of research and developmental procedure. Assessment of the SWOT and understanding of the status quo of the company and its business environment plays the key role in the transformational change. Generally there is a risk factor that is associated with transformational changes and a plan and well organized strategies are required to generate transformational changes. Leadership plays an important role in this sector as it guide the people through the changes that will bring about a transformation in the management. A single change doesn’t transform a management system[3].  For a multinational company the challenges become more complex as the operations of the management are segregated.  The coordination and communication process with the leader and the managers at any level is regarded as the most important aspect.

Leading with a global mind set

Globalization has enabled companies with resources to expand into the international areas. Expansion into the foreign lands require different approaches for different nation states and the people of those country who will be employed will be looking forward to a leader or a style of leadership that they are used to. There are countries which are used to having an authoritative leaders where as there are countries who appreciate the leaders being transactional and democratic in nature. The companies who are a global player are observed to employee managers even in higher from the country of operation. The higher management of the company should have a mind set to work and co-operate with the other stakeholder of the country of expansion in order to ensure the smooth working of the operations[4].

Leading change in global teams

The senior executives of the company are collectively called TMT or top management team, these are the people who are responsible for taking any kind of decision and policy making changes in the organization. Unusually depending on the sector and segments in the industry the managers are placed and this structure depends on the nature and scale of business. In order to incorporate the changes the company has to go through resistance and to combat the situation planning and formal approach is required[5].  The higher management should be well are of the grievances and challenges faced by the employees so as to develop a solution and increase the commitment towards the transition.

Leadership and Global Expansion

Word-of-mouth strategy

The word of mouth strategy played an important role in the global expansion of business of ABC Company. The managers and the higher authority of the company must be aware of their competitors so as to stay ahead of them[6]. It is important to understand the industry and the problems that will emerge in this industry. The word of mouth strategy provides long term benefit to the business. There are many customers who purchase the products of the company on the basis of referral by the prior customers. These consumers stick to the product or the brand and they prefer to choose this company rather than selecting other company. By analyzing the competitors, the manager would be able to determine what the company is doing and what are the loopholes of the company. This will help them to strengthen their business and thus successfully adopt the word-of-mouth strategy. It is also important to analyze the needs of the customers so as to run the business successfully. It is also the duty of the manager to keep a track of the customers about the reviews of the company. This effective and successful word of mouth strategy requires a lot of effort and hard work[7].  If the marketing manager knows the target group, it will help him/her to analyze the likes and dislikes of the client.  Thus, the company can build the marketing strategy accordingly and provide services according to the preferences of the client.

Social platforms

The social platforms are regarded as the easiest way for direct communication with the targeted customer group. It has been found that there are more than 70% of the internet users who use social media. It is also important for the manager to keep an eye on the brand promotion content on the social media sites. These content sharing inspires the customers of other barnd and they eventually get attracted to the brand. Moreover, the success of word-of-mouth marketing will increase if the opinion makers in the community influence the people and they shape the opinions in the society. Thus, it can be said that the word-of-mouth strategy plays an important role in communicating the information to the audience. It has been found that ABC Company is encouraging the customers for the promotion of their product and the customers are also happy in sharing their experience. This is considered as the most influential and powerful marketing strategy[8]

Word-of-Mouth Strategy and Social Media


The growing market, improvement in the business climate, rise in the consumer spending are the major factors will help the business for global expansion in a short span of time.  It is also important that the company must choose the higher authorities i.e. people who are engaged in the management in such a way that they have a good educational background in that particular field. This will help them to solve the problems or to discuss the problems with the clients or the stakeholders so as to find out further solutions to the problems[9]. Moreover, the person must also have relevant experience in that field so that they can handle any situation. Moreover, the manager must also be confident when they are taking any important decisions. This is necessary because the managers need to convince the team members and the employees so that they can adopt these steps. There must certain candidates in the team who can inspire the other workers or has the capability to convince the team members. The new initiatives must be taken by the manager of the company and they must focus on these initiatives before giving priority to any other. Moreover, ABC Company must also choose such mangers who can think something creative and come up with amazing ideas so that the company can expand globally in a short span of time[10].

Importance of interest value for the business professionals

It is also important that the top most leaders of the company must be of that particular country in which the company was set up initially. This is necessary because the leaders will have a clear idea of the problems and threats that will be faced by the company in the long run. This problem was faced by the manager of ABC Company because the manager was from South Africa but she had worked in Australia with many global teams on various projects such as retail, tourism. agriculture, finance and agribusiness. There were some business professionals who were engaged in the business because of their interest value rather than professional development. This has helped the company to gather various projects which were of different types and patterns because there were different professionals who were eager to solve problems of various kinds. They had keen desire so as to overcome the problems and find out relevant solutions for the company. This has helped in the business expansion of the global. Moreover, this has also enhanced the skills of the professionals and although they did not have much experience but due to their keen interest, they were able to handle them.

Prioritization for Global Expansion

Rationalization and prioritization

Rationalization and prioritization were the main expansion activities which were followed by many businesses of Australia. It is important to establish a quantitative baseline on the effectiveness and efficiency of the business environment so that the management committee can take important decisions on the current and future development of the business activities. The management committee must also have options for translating the applications for further value improvement which will help the company for further development and yield meaningful results. There must be clear communication of the expectations and objectives off all the relevant resources between the management and the clients of the company. These objectives must be designed in such a way so that they are specific, measurable, realistic and achievable within a short span of time[11]. The managers must also co-operate with the client and this is seen in case of ABC Company.  The manager supported the employees and took various initiatives for development of the organization.  The team must also align with the various kinds of application portfolio and the rationalization of the business must be done strategically. There were certain experts who agreed that strategic planning must be done according to the requirement and the financial position of the company[12]. There must also be higher degree of confidence in maintaining the financial data and the information. The decisions must be based on the recommendations which are to be implemented and these must be done accordingly i.e. it must be specified on which order it will be done and on the basis of the transformed financial benefit. These will be important not only for the realization of the benefits but it will be considered as robust and thus must be reinforced with a much higher degree of confidence. This will help in supporting and strengthening the financial information of the company[13].

Importance of cross sectional teams

There must also be a cross sectional team in the company and these team shall comprise of the business consultants, process consultants and domain experts who can provide relevant solutions for the development of the business. These will help in driving the synergies and thus improve collaboration which will help in gaining more alignment and solve the multiple perspectives which was faced by the company. ABC Company had experienced team of consultants and they took important decisions on which certain recommendations were implemented. It must also be checked that there is proper availability of sufficient budget and resources so as to implement the recommendations in the company. If there is lack of budget or resources, it will be difficult to implement the appropriate recommendations. The company must also assess the level of involvement and the cost which are necessary before the execution of the various rationalization initiatives. Moreover, it must also be ensured that these desired benefits are realized in proper time and condition. A necessary framework, if required must also be implemented by the company and it must focus on the understanding, transformation and analysis of the opportunities and implementation of the desired roadmap[14].

Conclusion

The management committee must also try to identify the opportunity grid which is created for categorization of the business initiatives and the opportunities which are identified by various frameworks. ABC Company also does not have any hidden cost included and if they are surfaced, they try to reveal the potential cost cutting opportunities in the market. This rationalization process is not followed by ABC Company and thus it does not allow the company to alter the different cost structures. It also requires initial investment and thus this will help to reduce the cost of running the business. An example can be cited of initial investment which can help in the consolidation of similar types of utilities and application in the businesses and it will also create a foundation for the long term and medium term payback by reducing the maintenance cost and therefore improving the operational efficiency. This will also help in reducing the redundant processes which were adopted by the company in the initial stage. The will also help in maximization of reuse of the various utilities in different types of business functions. The total cost of the quality will also be reduced and this will minimize the number of applications that will pass through various quality compliance processes[15].

Limitations faced by the company

The most important drawback of the company was the degree of autonomy which the professionals of the company had in developing their own projects. There were many business partners of the company in different parts of the world who did not have sufficient capacity to handle the projects with integrity. This was considered as an inefficient and ineffective way of handling the business. The manager of the company also conducted an analysis of the different kinds of impacts which will impact the business. There were certain key issues which the manager found that it could be resolved and this would be possible only with the current arrangements and interests in maintaining those projects[16]. The stakeholders of the company also played an important role and it is they who have helped ABC company for further expansion. There were certain senior partners of the company who has developed different types of ad-hoc projects based on their interests and expertise. This was considered as an important means for business expansion and revenue generation of the company. It was also the responsibility of the manager to define objectively the outcome goals which are considered as the main target of the company[17]. These performance goals are the tactics which must be reached for the fulfillment of the goals of the company. The performance objectives are set to fulfill the outcomes such as providing training to the employees, reducing the expenses of the company and collecting the receivables. It is also the responsibility of the manager to conduct market research on the customers and the industry so that it will help to analyze the product which is provided by the company[18].

The production planning must align with the total operation strategy and these in turn must align with the corporate strategic objectives. The operations strategy and the production planning strategy must align so as to lower the cost of production. This is important so as to ensure that the delivery process and the performance objectives are fulfilled. It is also the responsibility of the manager to check that the customers are happy with the service of the company. There must also be flexibility so as to adapt constantly to the demands of the customers. There must also be a waste free and efficient supply chain so as to minimize the cost. The other related performance objectives will also affect the costs.


There were certain challenges which had to be faced by the company before going global. ABC Company had to do the ad-hoc projects in the same way and this did not contribute to the branding of the business. The company had to struggle hard so as to gain global reputation. It has been found that the company had to pass through tough competition as there were many competitors in this industry. A careful planning is required before expanding internationally despite the various positive market indicators. The managers must also be aware of the positive external factors such as unexpected channel complexities, shifting market conditions and the aggressive competitors in the market. The company must also review and identify the internal capabilities so as to succeed in the long run[19].

It can be said that before going global, the leaders or the managers must analyze the business environment. Localization must be done correctly and it requires development and support. Moreover, in order to enter a market affordably it is necessary to acquire the smaller business that has local presence and traction. This will be beneficial for market entry and it will allow the company to expand globally. The companies do not want to concentrate all their efforts in the limited region and they wanted to spread out. The companies also looks for such markets which will behave differently from the existing ones in various parameters such as affluence of customers, growth rate, size, various stages of market development and many more. Moreover, the global expansion of business also requires cultivating the various opportunities which are available in the market. As every countries as their own rules and regulation, it is necessary to understand the local language and culture so as to communicate the vision and mission of the company effectively. It is also important to develop a new market segment so as to move into a new country. These also require cost and uncertainty and it is considered as an effective means of global expansion.

Conclusion

Thus, it can be said that there are many criteria’s which must be evaluated and analyzed by the company before going global. In case ABC Company, the increase in revenue and margin is not always necessary to cope up with the new projects because there are comparatively larger projects in the mining industry. The ad hoc ways for global expansion does not always facilitate for global expansion. ABC Company must take this into consideration before global expansion and this will enhance the global reputation of the company. There must be distinct and clear communication of the objectives from the relevant resources between the management and the clients of the company. These objectives must be designed in a smart way. It is also important that the manager must adopt the various roles and responsibilities which are necessary for global expansion.

References

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Al?Aali, Abdulrahman, and David J. Teece. "International entrepreneurship and the theory of the (long?lived) international firm: a capabilities perspective." Entrepreneurship Theory and Practice 38, no. 1 (2014): 95-116.

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Cavusgil, S. Tamer, Gary Knight, John R. Riesenberger, Hussain G. Rammal, and Elizabeth L. Rose. International business. Pearson Australia, 2014

Ruggie, John Gerard. "Global governance and “new governance theory”: Lessons from business and human rights." Global Governance 20, no. 1 (2014): 5-17.

Mainela, Tuija, Vesa Puhakka, and Per Servais. "The concept of international opportunity in international entrepreneurship: a review and a research agenda." International Journal of Management Reviews 16, no. 1 (2014): 105-129

Grant, Robert M. Contemporary Strategy Analysis Text Only. John Wiley & Sons, 2016.

Brannen, Mary Yoko, Rebecca Piekkari, and Susanne Tietze. "The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance." (2014): 495-507.

Meyer, Klaus E., and Mike W. Peng. "Theoretical foundations of emerging economy business research." Journal of International Business Studies 47, no. 1 (2016): 3-22.

Verbeke, Alain. International business strategy. Cambridge University Press, 2013.

Venter, Oscar, Richard A. Fuller, Daniel B. Segan, Josie Carwardine, Thomas Brooks, Stuart HM Butchart, Moreno Di Marco et al. "Targeting global protected area expansion for imperiled biodiversity." PLoS Biology 12, no. 6 (2014): e1001891.

Driffield, Nigel, Chris Jones, and Jo Crotty. "International business research and risky investments, an analysis of FDI in conflict zones." International business review 22, no. 1 (2013): 140-155.

Forsgren, Mats, and Jan Johanson. Managing networks in international business. Routledge, 2014.

Meyer, Klaus, and Mike W. Peng. International business. Cengage Learning, 2016.

Peng, Mike W. Global business. Cengage learning, 2016.

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