Multinational Business of Big Bazaar, First Solar, and Tata Motors - Case Study Example

? Multinational Business Table of Content Answer1. 3 Answer 2. 4 Answer 3. 6 Answer1. Big Bazaar, a hypermarket chain based on India it has 214 stores in 90 cities and towns in India. This retail chain is designed as an agglomeration of Indian market by offering a wide variety of merchandises which includes specially fashion and apparels and food products and other general merchandises of FMCG and FMCD products. Big bazaar is one of the retail chain brands of Future Group which is a group company which owns top retail chains in India like Pantaloons, eZone, Home Town. Future Group is listed in NSE as Pantaloon Retail India Limited. The company is planning to spread into the Middle East countries like Yemen as there is huge opportunity in this market due to the non presence of any global retail chains there and availability of domestic supplier. The location of Yemen is at the southern end of Arabian Peninsula in the Middle East. The Arabian Sea, Red Sea and the Gulf of Aden have made boundaries its southern and western side of the country. Two neighbour countries also bordered i.e. Saudi Arabia in north and Oman in the east. The population of this country is very poor and a large percentage the population is rural people. But in the last decades, it has been large scale urbanization in the country and now near about half of the population lives in town. There is a good incentives scheme by the Yemen government in any large foreign investment project. The purpose of this is to attract potential foreign investors to the prospective sectors of the country by minimising the risk of initial investment. Government also provide free exchange of currency from strong currency to Yemen or vice versa. To start a project in Yemen no need of nationalisation and reservation are required. Foreign investment projects are exempted from paying profit tax up to 7 years which is expandable up to 16 years if it helps to strengthen the sector. There is lack of well-developed commercial business centres in Yemen even in coastal cities; therefore, the country has poorly developed retail market. Most of the shops are in the major cities and maximum of these are family owned. The producers or manufacturer of retail products and goods are only the seller. No professional retail outlets or chains are there who sells by getting supply from producers. This is why the retail market is not at all penetrated even in urban areas of the country. But there is a good demand of retail chains which can provide the finished retail goods across the country and as the per capita income has been increasing and the purchasing power as well as buying behaviour has been developing since the last decades. Big Bazaar is a India based supermarket chain and it get the supply of retail products from institutional supplier as well as direct from the producers of good branded product and sell those after retail pricing those products according to its profit margin strategy. But in Yemen as there is no such kind of institutional supplier. So the company need to tie up with the home based producer of retail product like garments, food products and other daily needed products which have a good demand in the urban market. Answer 2. First Solar’s multinational business can be analysed by doing a PESTEL analysis of the international business environment and the potential market analysis. Political: It represents how the government represents the economy and a certain business i.e. the way of representing and the extent. Political factors of a country represented by certain areas like taxation policy, labour law, trade restrictions, tariffs and govt. stability. So, market attractiveness towards foreign investors will be high if the entire areas of political environment are business-friendly. Economical: Economical factors are influenced and comprised by the economy of a country, and the World economy. These factors are interest rates, inflation, economic growth i.e. exchange rates and currency strength. These are the main key points to represent a country to the foreign investors and the kea reason for market attractiveness to them. Social: It represents the demographic factors like population growth rate, per capita income, cultural aspects, and health consciousness rate and age distribution. It will help a company to segment the overall market for a particular brand or a product. Technological: It shows that how much a country technologically strong i.e. technological change and R&D factor and the acceptance rate of new technology and awareness of the people of that country. This factor influences the important areas of a new venture like the minimum efficient production level, outsourcing decisions of technology, cost and quality etc. Legal: This means the business laws and the areas of activity like customer law, employee law etc. If in a country the restrictions and prosecutions are almost similar both for the local players as well as the FIIs then it will help the foreign companies to compete with the local brands. Environmental: It refers to the factors which are influenced and related by the surrounding environment of a country like geographical positions, weather, climate etc. These are factors are crucial for the food and beverage industry and tourism industry Answer 3. Tata Motors has its effective value chain business strategies. All the five stages of its value chain business influence the businesses and have contributed a lot to make the brand value what it is now. This company gets competitive advantages from the competencies by these value chain business strategies and they compete in many areas in this process with the competitors (Economic Times, “Ready for a Big, Bad World”). Figure 1: Value Chain Business of Tata Motor Source: (Porter, “Value Chain Model”) Inbound Logistics: The Company has long term tie up with the service providers like supplier, agencies, transporter etc. All transactions with the service providers are very transparent and it is monitoring through SAP. The high valued items are supplied by DTL. The inbound logistics consist of effective storage process and facilities (Augustini, “Volkswagen Re-Evaluates Plans for Indian Market Entry”). Operation: The CEM i.e. Capital Equipment Manufacturing division of the company’s operational process is of global standard and it has the major capabilities of tooling development. The trainee employees are initially trained through an apprentice coerces which provides the skilled and industry oriented manpower. There are two teams in the department whose duty is to maintain continuous efficiency of the production process. High technology advancement happens like automated manufacturing integrated process. The company has many manufacturing units around the world like in Thailand, Bangladesh, and South Africa etc. It has its own maintenance department which take care of the manufacturing process and technologies (Balaji, “Economic growth - Value and Ethics as Drivers”). Capacity utilization of the company do outsource to the top brand like Mercedes Benz. They use the paint shop of it. Outbound Logistics: Tata Motor is stockyards all over the country. It has long term valuable contract with the transporter. It has been doing higher volume business with the transporters and it is ensuring the competitive advantages in the sense of price benefit in long term deal which generally minimize the operational cost. All the VDS i.e. Vehicle Dispatch Sections and all regional sales offices are linked through SAP so that from any offices across the Globe the transportation updates can be tracked. Security system is so that any kind of pilferage has not been happened yet sits establishment (Ellis, “Tata Steels Itself for Change”). Marketing and Sales: After sales feedback approach is made in such a way by the regular interval of QFD that it can be easily understandable of individual’s requirements. Innovative product development happens due to the clear understanding of the requirements of the potential customers who generally do repeat purchase of the brand have enough faith and trust in the brand. The best example of fulfilling the customer need and has a huge demand is Tata Ace and Tata 207. The brand saturated market penetration in Indian automobile market and as well has good global market presence. For the institutional clients’ requirements an independent team is there in the management level that continuously provides the best suites customised solution for the requirements of other business. These teams are defence and STU i.e. State Transport Unit ( . The company also help to augment any scarce resources; for example some dealers of Tata sells Fiat vehicle in the return of using the Fiat’s technology and the capacity utilization. Tata Motors follow the market trend and effectively do assessment of even recently changing market trend and also give priority to the consumer preferences and choices. The brand has very large network of dealers and distributors across the country which shows the strength of its distribution process. Service: The brand also has a competitive advantage in after sale service. It makes available of the spare parts in the service stations and as well as in other market outlets. It collects feedback from the field and implements those in the form of service it provides to the existing customers to influence them for repeat purchase of the new arrival models. Its service station and service are present across the country and as well as in the global market. The brand has large network of efficient workshop and as well as training facilities for the dealers. Reference: Economics Times. Ready for a Big, Bad World. February 22, 2002. < http://www.tata.com/company/Media/inside.aspx?artid=5zNoHCTPAEM= >. Augustini, P. March 22, 2011. Volkswagen Re-Evaluates Plans for Indian Market Entry. March 22, 2012. < http://www.ihs.com/products/global-insight/industry-economic-report.aspx?id=106598276 >. Balaji, A. P. June 05, 2007. Economic growth - Value and Ethics as Drivers;. March 22, 2012. . Ellis, E. 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