International Business Operations - Assignment Example

INTERNATIONAL BUSINESS OPERATIONS By Location International Business Operations Q1. Over the past decade, China has maintained its positioning as the global manufacturing giant, but this trend is slowly becoming an illusion because of the increased competition from other nations. In the 80s, China was the principle exporter of manufactured goods and this also increased its market share presence after the country joined the World Trade Organization. As at 2010, China supplied 19% of the 20% imports by the USA of manufactured products, making this country to be the preferable supplier for these goods to the North American continent. According to the Wall Street Journal (2012), the increasing labor costs in China have influenced a decrease in market share and also rising competition from countries that have realized the potential that lies in manufacturing. Other than this, China’s labor providing population also lacks the necessary skills required in the diversified production market, hence pushing manufacturer’s to seek services from other countries. It is also difficult for foreign manufacturer’s to set up base in China because state-owned companies are the most dominant. The other aspect is likely to put China out of the manufacturing business is the fact that more and more countries are looking to set up their own manufacturing companies within themselves as a way of cutting down on production expenses. The shipping costs related to the exportation of raw materials that exporter’s haveto incur is one of the key aspects that countries have sought to override by failing to give China the manufacturing job. In my view, most of the competition that China is facing tends to be from Vietnam, Indonesia, and Bangladesh, which have taken up most of China’s market exports to the US for clothing (McCann 2011). In essence, the trading environment provided in other nations such as Vietnam have made America to shift their manufacturing interest from China because of the free trade agreements provided by the latter. In this regard, Vietnam has become the greatest gainer because most of the US investors such as Nike have made their established their manufacturing base because of the projected cost benefits that would come as a result of not operating in China. Therefore, Vietnam is the greatest competitor to China as they have also attracted investors in the electronics sector, which was China’s stronghold to companies such as Samsung and Nokia. On the other hand, China is also losing out its market share in the manufacture of automobiles to Mexico because of the competitive labor costs provided and preferable trade agreements. Automobile manufacturers such as Honda,Volkswagen and Nissan, which are key carmakers in the world, have opted to have Mexico as their manufacturing base rather than in China. Essentially, the hurdles that China has created for investors have influenced them to seek investments elsewhere to the detriment of this country. However, China is not likely to lose its market significance in manufacturing at a flash because some manufacturer may opt to adapt to the challenges experienced by moving out of China if the trading environment remains the same. Bibliography McCann, J 2011, China’s textile and apparel industry and the global market: five competitive forces, Advanced Management Journal, vol 76: no. 1. The Wall Street Journal 2012, “China Begins to Lose Edge as World’s Factory Floor”, The Wall Street Journal. Available from: http://online.wsj.com/news/articles/SB10001424127887323783704578245241751969774 [25 March 2014] Q2. Ideally, working for an organization such as Asus Computer Company based in Taiwan would be the best option because the hiring criteria may not be as strict as compared to that of Microsoft. In essence, most of those hired by Microsoft tend to undergo a rigorous process before they become part of the institution because the company has to maintain the image that the globe perceives it to have. Further, working for Asus is also preferable because the company has lesser competition within itself in terms of hiring and even within the already employed staff. As compared to Microsoft, Asus has a lesser workforce, meaning that it is easier to manage all staff members and also the addressing of concerns raised by them cannot take time before reaching a response. However, these two companies may provide a diversionary opportunity for growth for an individual that sets out as a fresh recruit to these enterprising companies. For one, Asus Company has the potential to influence growth because the company is likely to influence its employees to be innovative and take up projects that may help the organization to stay ahead of its competition (Wilmot & Carlson 2006, p. 285). This may not be the case for establishing companies because many of times innovations may take time before they come to fruition because the number of those presenting their ideas may be high hence making it impossible for an innovative idea to sail through. Skills that make a job candidate attractive for a position One of the most principle skills that organizations look for in a candidate seeking job placement is that they should have critical thinking skills in that they should be able to visualize and analyze challenges. Employees should be able to provide realistic solutions to problems that an organization may face rather than being spectators meaning that this trait would make an individual to stand out from the rest of the job seekers. The other desirable trait that employers look for in an individual is that they should have effective communication skills in that they should be able to put across their points to an audience or other workmates through both writing and their speech (Ober 2007, p. 280). In many cases, job seekers lose out on job opportunities because they may lack this skill because this is one of the basic necessities that make an individual to be valuable. Further, a company that seeks to expand its market presence may also source for employees that appreciate the need of working as a team rather than individuals because this is one of the effective ways of influencing growth. An individual should also have a global mind as they should be able to understand other cultures with ease for the good of an organization that tend to have diverse workforces. Therefore, an employee should be able to self-motivate and also motivate others rather than bringing negative energy to an organization because this can become a major contributor to unproductive institutions. Bibliography Ober, S 2008, Fundamentals of contemporary business communication, Boston, Houghton Mifflin. Wilmot, WW & Carlson, CR 2006, Innovation: The Five Disciplines for Creating What Customers Want, Random House LLC, e-Publishers. Q3. Ideally, trading in overseas is one of the most risky forms trade because of political or foreign exchange currency factors, but has not influenced business enterprises out of making investments that have profitable to many. For one, the investment value may fluctuate in a foreign region due to changes in the rates of currency exchange, hence forcing businesses to register losses in the course of their operation. Further, the political risks of a business may result from the enforcement of policies from a government that may make the operations of a business to be challenged or to attract losses for the business. However, this has not been a worthy deterrent factor to those seeking to have investment opportunities as they tend to apply various methods that have or may help them in managing these risks and also attract profitable. Some of the methods used in managing risks include the identification of the risk factors, determining the ways in which basic assets may be vulnerable to specific risks, ascertaining the consequences of the risk if taken, identification of ways of reducing these risks and lastly the prioritization of the risks based on a clear strategy. No matter the method chosen in managing the possible threats to a business, there has to be an assessment, development of a risk management plan, and the implementation of the same as a way of mitigating the same. In many cases, assets owned by a business enterprise tend to be the most affected in the event that the business makes a wrong business decision or ventures in a valueless risky investment. Therefore, a business that would want to engage in overseas trading should use the determination of the assets that are likely to be vulnerable to the intended risk in order to avoid dire consequences of trading (Vellani 2006, p. 110). Ideally, risk management is an integral part of decision making within an organization as this may or may not influence a business to achieve financial growth hence making it to be a necessary practice. The other method that a business trading overseas may use in managing risks can be the priority of the risks in terms of those that can attract significant losses and those that can be the first to occur to be at the top (Cunrow 2003, p. 220). This can be helpful in terms of resource allocation as tackling them should be a matter of priority before they occur because the amount of can be detrimental to the profits and operations of a business. In most cases, businesses may not handle risks that have a lesser probability of occurrence and attract high losses as a matter of priority, but tend to tackle those with a high probability of occurrence and may attract minimal losses, which is the wrong approach. Therefore, risk management couples with effective decision making as necessary business practices as these two have a high probability of influencing an organization towards valuing growth, which requires the effective utilization of resources. Bibliography Conrow, E H 2003, Effective risk management: some keys to success, Reston, Va, American Institute of Aeronautics and Astronautics. Vellani, K 2006, Strategic Security Management: A Risk Assessment Guide for Decision Makers, Butterworth-Heinemann, Oxford. Q4. Over the years, Information and communication technology has grown to be one of the major areas of interest of the Turkish economy as compared to France and Poland. In comparison, France already has established personal computer manufacturers such as Dell and Apple with running factories, hence making it hard for this new entrant to penetrate this market. On the other hand, Poland does not seem as the most preferable location for setting up such a factory because Dell and Lenovo have operations in this European nation. Essentially, Turkey would be the best country to set up this new personal computer manufacturing company because of the prospects that its population may attract. They need to have access to PCs in this country has increased because a large part of the population believes in the power of ICT to transform its economic future because of the solutions offered by this technology. According to CNBC (2012), Turkey stands as a ready market for new entrants in the personal computer manufacturing industry rather than competing in countries where giants in the industry have established roots. Further, there has been an increase in the purchase of computer hardware and software of those involved in the IT sector making this to be a profitable business. As the CEO, the decision to set up base in Turkey is the best one for the company because there is also a forecast for internet usage and access hence creating a need that should be satisfied. The outlook for the Turkish economy is high because this nation has the potential of having an increased spending potential that may spread to leisure items, which is higher than for any other nation in the world. With this, the decision to set up manufacturing base in Turkey draws from the fact that the Compound Annual Growth Rate should rise to 7.4% until 2017, which means that this would attract growth for investors. Ideally, competition can be healthy for a business, but the competition should be too stiff that it may attract losses for a new entrant to a saturated business sector. The reason why building a new manufacturing factory for personal computers in Turkey would be a profitable business is because Turkey has its goals set on expanding the internet reach to over 30 million subscribers by 2023 (Meissner, Gokhberg & Soklov 2013, p. 16). This means that there is a ready market in this country because of the economic milestones that this growing economy seeks to achieve in terms of e-transformation. Other than this, Turkey also provides already existing labor availability because there are no personal computer companies established in this untapped area. Turkey also seeks to extend its R&D expenditure from the current 0.85% to 3%, which is part of the country’s vision set for achievement by 2023. As the CEO of this new entrant to the personal computer manufacturing company, Turkey would be the best location for setting up the plant because of the opportunities available in this untapped market. Bibliography CNBC 2012, “Big Opportunities in Turkey’s Digital Economy”, CNBC News, Available from: http://www.cnbc.com/id/48688251 [25 March 2014] Meissner, D, Gokhberg, L & Soklov, A 2013, Science, Technology and Innovation Policy for the Future: Potentials and Limits of Foresight Studies, Springer, New York. Q5. Apple Inc is one of the principle multinational companies in the computer hardware and software manufacturing industry in the world in terms of distribution and sales. As much as Apple has continued to enjoy success, the Company has also experienced immense criticism from the media and the public because of some ethical activities that has attracted the attention of many critics. One of the greatest controversies faced by Apple was that of the sweatshops where the media went over the top to show the public how Apple was registering profits at the expense of Chinese workers. Ideally, China has very poor and non impactful labor laws, hence allowing manufacturer’s such as Apple to maximize their output without factoring in the needs of its workers. Essentially, the workers in these manufacturing companies run by Apple, also took home minimal pay, which did not compensate for the many hours that they put to ensure that the Company meets its production targets (Klaiber 2013). The media argued that Apple was well able to pay its workers as per their output rather than paying them 1.12 pounds per hour. The company faced allegations that their working environments were sweatshops as the workers did longer hours and received minimum pay. Many of the workers that formerly worked for Apple have become incapacitated because they can no longer use their hands effectively as a result of doing repetitive tasks without going for adequate breaks. This is because Apple did not allow them to get enough rest despite working for more than twelve hours, which is above the standard working hours in China that is eight hours. Another unethical business practice associated with Apple by the media was that of having underage children, providing labor to these perceived sweatshops, which contravenes the international labor laws. Strategies for avoiding such problems in the future and how to the Company can recover its reputation According to Viederman (2012), Apple has a corporate responsibility division charged with looking into the working conditions of its workforce, but the application of this practice may not be uniform across all its manufacturing companies in the world. Using this as a basis, Apple Inc should take up the initiative of ensuring that it applies uniformity in its business practice rather than having some of its subsidiaries apply ethical behavior while others break the same. Further, Apple needs to speak with the same voice to their suppliers in terms of their expectations when it comes to applying ethical business practices in order to avoid a breach of the same. In the future, Apple should make the changes enforced as part of its corporate responsibility public, which will serve as a place on its side because its target market will be informed of their intent to apply the ethical business standard practice. One of the notable ways in which Apple demonstrated to the public that it was socially responsible was when the Company returned $6.7 million to migrant workers where unscrupulous labor contractors had overcharged them. Bibliography Klaiber, B 2013, Anatomy of an Apple-The Lessons Steve Taught Us, BookBaby e-publishers. Viederman, D 2012, “How Apple, and everyone, can solve the sweatshop problem”, Reuters, Available from: http://blogs.reuters.com/great-debate/2012/02/29/how-apple-and-everyone-can-solve-the-sweatshop-problem/ [25 March 2014] Read More