Organizational Culture for the Fictional MNC - Essay Example

? Expanding an MNC – Part 2 Organizational culture for the fictional MNC The fictional US based MNC that has envisaged expanding in the internationalmarkets is K C Cola. The target market for expansion of the MNC is the UK market. The culture of the organization is such that it would ease the process of entry into the given market. The multinational soft drinks company has a mission to grow into one of the largest players in the industry with a vision of offering delight and satisfaction to the customers. The company monitors the professional development of the employees and its services. By doing so, the company in turn tracks the performance of its sales of soft drinks in the market. The employees with innovative ideas and vision are rewarded\in order to pave the path of long term growth of the company. The organization has a flexible outlook and leverages on opportunities that are available in order to meet the economic challenges. The company pays due attention to the employee and customer satisfaction and carries out research in order to undertake suitable strategies for growth ands expansion. The feedbacks from the employees regarding customer response and satisfaction level are taken by the senior management in order to improve its financial and business conditions in future. The organization also asses market potentials and considers expansion of business into international markets in order to tap the available opportunities. The company also analyzes the environment of the international markets in order to assess the business potentials in case of expansion of business. Environmental scanning analysis for the new market The environment of the UK market has been scanned and as explained as follows. The environmental scanning has been done as a part of the analysis required for expansion of the soft drinks business of K C Cola in the UK market. The UK market is undergoing the impacts of economic recession and the economy of UK is facing a slowdown. Although the government has undertaken measures and the economic stability has been recovered as compared to the past. Due to the effects of financial recession the income level of the middle income group, which forms the major section of the customer base for soft drinks, has been low. However due to systematic administrative structure and the potential of huge customer base, the environment for entry into the UK market by KC Cola is favorable. The regulations pertaining to the environmental protection, consumer rights, etc are required to be followed by the multi-national soft drinks company. These factors are to be considered as a part of the expansion plan for entry to the UK market. The health issues for the people are strictly enforced by the business laws and regulations. The issues related to obesity of the children, calorie level of the soft drinks are important factors to be considered for entry into the new market (Hutt and Speh, 2012). The emission of green houses gases in the environment are another factor that need to be considered by the multinational soft drinks company. Entry strategy, ownership structure, and organizational structure for the fictional MNC KC Cola being a US based multinational soft drinks would need to enter into contract with the business organizations in UK. For this the company could adopt licensing as the market entry strategy. Through the method of licensing, the company could enter into business contract with the UK companies and provide them the detail on manufacturing know-how, processing with full discretion for marketing, sale and revenue earnings. In lieu of this contract, K C Cola would earn commission for sale of the soft drinks. The major stakeholders of the company are the shareholders, employees, business partners including the bottling partners and the retailers, suppliers, consumers and the local communities. The division managers of the company run the operations of the organization in different regions of the world. The vice-presidents have several functions that operate under them. These functions are namely, the operations, human resource, research and development, marketing and sales, etc. The vice-presidents and the presidents report to the CEO of the company. Thus the organizational structure of the company is a tall structure. This is likely to cause communication problems and the company should adopt suitable strategies to set clear goals between the employees and the organization. The use of intranet could be the key to solve communication problems in the organizational structure. The company could also look to decentralize its operations in the foreign market for sustaining its business effective in the UK market. Political risk assessment for the given country The company should take into account the political environment and the associated risk in the UK market. The political risk assessment is significant for entry to the international markets by the company. Considering the UK market, the company should take into account the change of government and the changes in the fiscal policies and the monetary policies of the government. The reactions of the society to the policies of the government and the civil turbulence created in the society are likely to affect the sales and revenue earnings of the company in the UK market. In order to revive the position of economic slowdown the ruling political party has brought in changes in the taxation system. The tax rates have been increased in order to increase the revenue earnings of the government. Thus the soft drinks company would need to consider the increased tax payments under the current political system. The political regime has also included new banks in the financial system and through privatization; the financial sector is made competitive. The company would thus get access to high loan amounts for the purpose of business expansion in the UK markets. The civil turbulence created in the market due to lowering of income levels and the increase in tax by the political regime has affected the level of consumption. Thus the consumption level would vary due to the change in policies as a result of the changeover of political regime. This poses a risk of loss of revenues for the company (Reuvid, 2012). Thus the profitability of the company would be hit due to political risk exposures and fluctuating demand of the consumers. Implementation strategy for expansion The implementation strategy of KC Cola takes into account the segmenting, targeting and positioning of the soft drinks in the new market of UK. The market should be segmented first according to a particular criterion like the age group, income level, etc. The characteristic features of the different market segments and their needs should be studied to understand which market segment would be the best for the company to target. The company could also consider the option of standardizing its soft drinks based on the overall market needs. However, it is recommended that the strategy of balancing between the standardization approaches and fixing a target market segment could be adopted by the company. This would help the company to capitalize over a large customer base instead of focusing on a particular market segment. The recommendations also prescribe that certain features in the packaging of the soft drinks could be included or promotional activities could be carried out by the company to position the soft drinks in the hearts and minds of the consumers (Jenster, Hayes and Smith, 2005). Once the soft drinks manufactured and marketed by the company are positioned well in the hearts and minds of the consumers in the UK market, the company could consider this as the successful implementation of their strategy for expansion. In this way, the company would be able to enter and expand their business in the UK market. References Jenster, P. V.,  Hayes, H. M. and Smith, D. E. (2005). Managing Business Marketing & Sales: An International Perspective. Denmark: Copenhagen Business School Press DK. Reuvid, J. (2012). Managing Business Risk: A Practical Guide to Protecting Your Business. USA: Kogan Page Publishers. Hutt, M. D. and Speh, T. W. (2012). Business Marketing Management: B2b. USA: Cengage Learning. 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