Global Business Strategy for a Thesis
- Length: 12 pages
- Sources: 10
- Subject: Business
- Type: Thesis
- Paper: #6776907
Excerpt from Thesis :
Exporting apparel to France would reveal a slightly similar difference. As integrant part of the European Union, France has removed numerous financial barriers in relationship to other EU member states. It has however intensified its barriers relative to product quality and sanitary standards. In terms of the direct relationship between France and the United States, this is generally a positive one, revealing mutual gains and lack of controversy. Efforts are currently being made to reduce the trade barriers between the United States and the EU as a whole (Buy USA, 2009).
A franchising entry strategy would reveal numerous benefits for Miana Fashion, such as reduced risks and shared responsibilities, but would also imply shared financial results. In France nevertheless, such a strategy would stand increased chances of success, supported by all political, economic, cultural and legal backgrounds. France is the leading franchising country of the European Union, with no less than 750 brands operated through 34,000 franchisees, which make for annual revenues of 33 billion euros (Franchise Selection, 2008). The lawmakers and communities support this entry strategy as it constitutes a major component in France's economic backbone. In China however, the sector remains ambiguous. Franchising opportunities are welcomed from one standpoint, but then impeded from a different perspective. "Though foreign companies are finding commercial opportunities in China, not everyone find it as paradise. There are many potential risks companies should be aware of. Improper management or a trademark infringement might quickly bring a franchisor to the hell" (HG, 2009). The World Trade Organization is focused on determining China to better support the sector and reduce any barriers.
4.3. Wholly-owned subsidiaries
From the standpoint of running wholly owned subsidiaries, the situation is rather different. France is a generally mature economy and will as such better support such an entry strategy. China is however emergent in terms of all politics, society and economy. This virtually means that it may not be prepared to welcome wholly owned foreign plants. The state officials have even imposed restrictions on the ability of foreign investors to own real estate properties within the country (NuWire Investor, 2008). This measure constitutes a national advantage as it restricted the speculative purchases within the real estate industry and as such reduced the intensity of the credit crunch upon the Chinese real estate, but has the net disadvantage of limiting the powers of the prospective investors. This endeavor is by far the riskiest and most costly one, but it is also the one that would be best received by the Chinese and French societies due to its advantages, mostly the creation of new jobs.
5. Role of IT and the Internet
As it has been previously mentioned, both France and China are developed from a technological standpoint. Relative to the internet, China is the country revealing the largest numbers of users; France is spotted on the 6th position; the top contains 232 countries as was developed by the Central Intelligence Agency. Given this status quo, it becomes obvious that Miana Fashion has to construct its global expansion strategy on numerous technological premises. Otherwise put, its success within the global market is pegged to its ability to integrate the latest technological developments.
For once, it is crucial for Miana to purchase the equipments and machineries which create apparel on high levels of operational efficiency -- they consume low volumes of resources (all commodities, capitals or necessary for human resource assistance) and they deliver high quality products throughout short periods of time. Secondly, technologies are also crucial to ensure superior levels of communications within the internal environment, but also with the external environment. In this order of ideas, the managerial team at Miana should integrate the latest technological applications (including the internet) to ensure that its staff members are reachable at all times and that they are able to communicate all of their ideas. An adequate process of communication is crucial to business success, and technology is pivotal in the communication process. Within the internal environment for instance, technologies can be used to create and enforce a stronger relationship among staff members themselves, and between personnel and managers. This leads to the creation of a friendly, yet dynamic, working environment, which is a strong component of organizational success. Other internal applications of IT and internet include the abilities to forecast cash flows or foresee demand for organizational products (The General Network News, 2009).
In relationship to the external environment, technologies and the internet play the pivotal part of bringing the company closer to its various categories of stakeholders. High technologically developed campaigns could easily raise the interest of prospective buyers or investors. Additionally, a well developed campaign, constructed on technological premises, will attract the support of the local community. The company's website will also raise more customers, as it will also promote the company and enhance its reputation, all with the ultimate impact of increased chances for organizational triumph.
6. Manufacturing and Material Location
Manufacturing in China reveals a net advantage of reduced costs with the human resources. It is already common knowledge that China is a leading global manufacturer, and that the trademark "Made in China" can virtually be spotted in all countries. This means that the Asian country reveals several advantages to manufacturing, aside a cheap labor force. These include an experienced labor force, which is already accustomed to working for foreign manufacturers; an adaptable workforce and a skilled workforce. All these lead to the conclusion that China has the ability to manufacture items "better, cheaper and faster" (Pinto, 2009). In terms of commodities and other materials however, China is relatively poor; most of their natural resources refer to metals, petroleum and gas or other chemical components, meaning that Miana would have to import most of its commodities. This will not only generate dissatisfactions from the part of the community, but will also imply additional costs and efforts.
Manufacturing in France is on the other hand more costly than the Chinese alternative. As mentioned throughout the previous pages, France is a mature and consolidated market and economy, meaning that it implements solid and real prices, aimed to ensure consistency and stability on the long-term, rather that attract investors on the short-term. While following the global trend of a reduced emphasis on manufacturing in the favor of services, France remains a leading manufacturer within the European Union, significantly outperforming Spain or Germany (Hugh, 2009). In terms of materials, France has consolidated its position as a major global manufacturer of textiles; the industry is extremely dynamic, competitive as well as it is technologically developed. "Combining its proven expertise and know-how of the textile industry with that of other sectors such as chemistry, mechanical and civil engineering, medical and agriculture, France has positioned itself as a key player in the functional and technical textiles industry" (Invest in France Agency).
7. Approach to Marketing and HRM
Before actually revealing the approaches to be taken in terms of marketing and human resource management in the European and Asian countries, it is necessary to identify the core on which the global expansion strategy will be constructed. In this order of ideas, the market penetration strategy considered most suitable in China will be that of wholly-owned subsidiaries, with the specification that the actual facility in which the manufacturing operations will occur will be rented, and then purchased after two years of operations in China; commodities will be imported and the final products will be sold in both China, as well as back in the United States. In France, the penetration strategy will be constructed on franchising operations and the commodities will be purchased from local textiles manufacturers. The final products will be sold both nationally as well as within the United States.
The marketing strategy in China will be constructed on the following concepts:
The marketing campaigns will promote the organization and its role of creating jobs and supporting the development of the local communities
The advertisements will be focused on attracting both prospective employees, as well as prospective clients
The advertisements focused on attracting employees will present the Miana manufacturing plant as a dynamic and pleasant working environment, in which the staff members are able to contribute to the country's economic growth, while also being part of a professional community which adequately cherishes them and remunerates their efforts
The advertisements focused on attracting customers will revolve around the modern and fashionable characteristics of the apparel sold
In terms of the staff members however, once they have been attracted and hired, the organization must also develop human resource strategies to managing them. The following lines reveal some aspects in the HRM applicable by Miana Fashion:
The company will select, recruit and hire individuals based on their ability to meet the criteria desired by the organization (such as skills, previous expertise and so on)
The employees will be remunerated at competitive salaries, even slightly higher than the wages offered by other employers in the industry; the tactic will generate increased costs, but will stimulate the…