Understanding Strategic Management - Assignment Example

Executive Summary This report will try to highlight some key issues for the assigned company to develop best practices for intercultural communication. United Kingdom has been selected as target country for the company. First section of the study will deal with macro environmental audit of United Kingdom in order to understand cultural and business issues of the country. Second part of the report will try to throw some light on PIMLICO project structure. PIMLICO model deals with examining existing intercultural communication models and selecting the right one. Last part of the study will deal with recommendation for the company to develop best practices of intercultural communication in United Kingdom. Memo of Transmittal DATE: October XX, XXXX. TO: FROM: XXXX SUBJECT: Business In response to the request made by you on October XX, 2012, I have completed writing the project report after undergoing a detailed research using both primary and secondary sources regarding the various factors related to intercultural communication. I am pleased to present you the project report as asked by you. Please find the report attached herewith. The problem statement in this research study is to develop best practices of intercultural communication for the assigned company. The study has selected United Kingdom as target market for the company. The study used case study of a Polish manufacturer in order to understand existing best practices in the business environment. Based on the findings and analysis of the research study, it is recommended that the company needs to adopt British culture and recruit local people to overcome linguistics barrier in the United Kingdom. Detailed recommendations are illustrated in last section of the study. Please feel free to contact me if you have any questions associated with the project report or if you need any kind of additional information. I will try to assist you in every possible way. Enc. Project Report Table of Contents Table of Contents 4 Scenario 3 6 PESTLE of UK 6 Political 6 Economical 6 Social 6 Technological 7 Environmental 7 Legal 7 Porter’s Diamond Model 8 Chance Factor 8 Factor Condition 8 Firm’s Strategy 8 Demand 9 Supporting Facility 9 Government 9 PIMLICO 9 Strategic Initiative 10 Phases of PIMLICO 10 Case Study on Industry Best Practices 11 Recommendation 12 Conclusion 14 Works Cited 15 Scenario 3 United Kingdom has been selected for the company to open their first international division. A macro environment auditing is needed to be done in order to understand business opportunities present in the country (Henry 52-58). PESTLE of UK Political The political issues represent the ongoing political situation of the country. It indicates the factors such as tax policies, political changes and issues regarding trade restriction, tariffs and the constancy of the government. The political design of United Kingdom is a legal monarchy and also a parliamentary system. The country is very much politically stable. Economical The economic contributors include gross domestic product, interest rates, unemployment rates, inflation rate and growth rate of the economy. The economy of UK is one of the strongest economies around the globe. UK is regards as highly manufacturing country. The other significant sectors of UK include fishing, tourism, agricultural and finance. The official currency of United Kingdom is British pound sterling. Social The social issues include patterns in demographics such as size, population, cultural factors and consumer behavior. The culture of UK regards the idiosyncratic cultural inheritance. British people generally speak English as the local language. It is classified by the existence of dissimilar types of consumers in the market. Technological Factors comprise rate of new product development, increase in process automation and other technical infrastructures such as technology transfer, technology inducements, internet application and research & development. In United Kingdom technology plays central parts of any business. British people emphasize on using technology in almost every sector and United Kingdom is also considered as one of the pathfinder in the field of technology. Technological factors include increase in new technology integration, system automation, technology transfer, technology inducements, research & development activity, product development and web technology. Companies need to stress on improving technology in order to endure in the hypercompetitive business environment of UK. Many organizations are trying to amplify their proficiency on Radio frequency Identification or RFID technology with the intention of increasing efficiency of value chain. Environmental The environmental issues of a country comprise natural phenomenon such as weather patterns, natural disasters, climate etc. The weather of the country remains cool all through the year. Legal The legal factors of a country include health & safety issues, laws for favoritism, biasness, employment and antitrust law. The country has a very coherent legal structure. British legal system was evolved over elongated time periods and is measured as the underpinning of many laws for all the countries of Anglo region. Porter’s Diamond Model Companies need to use porter’s diamond model in order to explore business opportunity in United Kingdom (Walker 177). Chance Factor Companies need to monitor uncertain events such as recession; euro zone crisis which can hamper the sustainability of business in near future. United Kingdom uses Pound as official currency in contrast to Euro used by countries like Greece, Spain, Italy and others hence risk from euro zone crisis is low for United Kingdom. Factor Condition Companies can get sufficient human resource capital to continue operation in United Kingdom. Unemployment rate in UK is almost 7.7 % hence companies need to hire more local people in order to contribute to economic development of the country. Firm’s Strategy Firm’s strategy depends on industry competition. For example market competition in packaged drinking water industry is high while competition level is low for publishing industry in United Kingdom. Demand United Kingdom is one of the most developed countries in the world with population more than 0.06 billion. Large population of the country induces demand for lifestyle products and apparel products. Supporting Facility Companies planning to expand their business in United Kingdom need to plan their supply chain management. Cost of domestic supply chain is high hence companies try to outsource supplies from home country. Government Government of the country is helpful towards foreign players. UK government provides tax exemption to organizations invested more than £10,000 on technological integration and research & development. PIMLICO Many linguistics researchers have proposed a new methodology called PIMLICO in order to develop best practices for intercultural communication for the international companies. PIMLICO can be subdivided into various parts. These parts can be underlined in the following manner. Promoting Implementing Mapping Language Intercultural Communication Strategic Initiative Companies trying to expand their business in UK need to use two-stage promotional initiative to develop intercultural communication. Many researchers have pointed out that PIMLICO model is more useful for international small and mid level companies because big companies normally operate business in foreign shore with the help of strategic business units. PIMLICO helps companies to overcome cultural and linguistic barriers in global trade. PIMLICO project focuses on surveying forty best practices adapted by global leaders and identifying elements required to design successful language management strategy for medium sized companies. PIMLICO project focuses on other critical issues such as dynamics of infrastructural support (from business and value chain partners) from foreign country and operation mode required to survive in hypercompetitive business environment of foreign country. Phases of PIMLICO Companies trying to expand business in United Kingdom needs to adopt two phases of PIMLICO in order to develop best practices for intercultural communication. Two phases can be briefed in the following manner. Identifying existing best practices adopted by renowned companies such as Apple, Nestle, PepsiCo, Nokia and others to fulfill linguistics requirement of local customers. In these phase they need to use various tools of macro environment analysis such as PESTLE and Porter’s Diamond model in order to understand local market. They mainly need to focus on best practices for cross border trade language adopted by existing players in the market. Implementing best practices in their daily business operation. Pilot phase implementation can be done to check validity of the process in the initial stage and full phase implementation can be done after successful completion of pilot phase. Case Study on Industry Best Practices Steelpress is a Polish company specializes in manufacturing accessories and metal parts for industry users. The company has already started their international operation in various countries such as Russia, United Kingdom, USA, Serbia, Israel, Macedonia and Canada. The company has adopted language management strategy for their international division after going through series of failures. They faced the language problem such as translating technical language into local language in order to communicate with local staffs, communicating promotional activity through local language and many others. The company has adopted following strategies to overcome linguistics barriers in foreign market (OECD 146). Steelpress has hired native speakers to promote their offering to local customers. The company employed local vendors with an ability to speak at least two languages such as Russian/Polish, Spanish/English and French/English. They did through market research in order to identify local agents belong to countries like USA, UK, Russia and Australia. Steelpress has designed market specific third party languages to penetrate foreign countries. For example the company has selected English and French to enter United Kingdom. The company offered placement facility to foreign students in order to explore existing market opportunities. For example the company has arranged campus placement facility for students of developing countries like India, Brazil and China. The company did strategic tie ups with local Government in order to get facilities such as special economic zone and tax holiday. They have also organized corporate social responsibility events to understand the pulse of local market. The Polish exporter has designed their website in six different languages such as German, Polish, English, Russian, French and Spanish to communicate company information to local customers. Recommendation Successful companies like Nestle, Coco-Cola and others use language management strategy or LMS in order to develop intercultural communication. Companies use various methods in order to solve language related problem of local market. Problems such as ethnocentrism can hamper business operation on daily basis. The company has recently acquired its first international division in United Kingdom hence they need to adopt British culture to survive in the market. The organization also needs to follow industry practices for solving language related issues and developing sustainable intercultural communication model. The company needs to adopt following guidelines in order to best practices for intercultural communication. The company needs to recruit local agents for handling business operation in United Kingdom. This step will help the company to save cost of hiring expatriates from home country. The organization needs to create specialized linguistically adapted websites to share information with local customers. In UK English is the first language hence the company needs not to adopt any other language for their website. The company needs to use linguistic auditing in order to tackle quality and capability of foreign language and cross cultural communication (Byram 670). The process focuses on developing language capacity of staffs by giving them training on how to adjust behavior in accordance to language requirement of local customers. British personal and business communication have similarities with Asian communication style in terms of using tactful language instead of straight approach. People in the country believe that straight forward communication can hamper the principle purpose of communication and also creates a negative image in the mind of third party. British people prefer to use coded language for personal as well as business communication (Kane 83). Companies need to adopt British communication style in order to satisfy local stakeholders. In the initial phase the company can use professional translators or interpreters to communicate with British people. This strategy is only applicable for companies belong to non English speaking countries. The organization needs to translate their promotional campaign into English to engage British people with offered product. They need to change their integrated marketing communication strategy in order to penetrate into UK market. The company can establish strategic tie ups with British universities in order to recruit local students through campus placement. This kind of strategic tie ups will help them to encourage local students to participate in recruitment process. Localizing the recruitment process will help the company not only to decrease cost of operation but increase acceptability among British people also. Conclusion Companies planning to expand their business in foreign market need to design their communication strategy very carefully in order to achieve sustainable business growth. Synchronizing intercultural communication into business operation and value chain management can be classified as key success factor for companies trying to expand business internationally. Works Cited Byram, Michael. Routledge Encyclopedia of Language Teaching and Learning. London: Routledge, 2000. Print. Henry, Anthony. Understanding Strategic Management. Oxford: Oxford University Press, 2008. Print. Kane, Leslie. David Mamet's Glengarry Glen Ross: Text and Performance. London: Routledge, 1999. Print. OECD. OECD Studies on SMEs and Entrepreneurship Thailand: Key Issues and Policies. Paris : OECD Publishing, 2011. Print. Walker, Gordon. Modern competitive strategy. New York City: McGraw-Hill International, 2003. Print. Read More