Phase Separation Solution Company Market Alternatives - Assignment Example

Phase Separation Solution Company Market Alternatives Should Phase Separation Solution Company enter Chinese Market? Globalization of business operation has proven to be a significant and tremendous development in the contemporary world economics and commerce. Apparently, companies are taking advantage of global opportunities and new emerging markets to grow far beyond domestic their country’s borders. Despite challenges and numerous handles that include; transportation and logistics problems, supplier incurred costs, variable and changing marketing strategies and plans not forgetting cultural background uncertainty, international companies have some very significant advantages as compared to the local businesses (Haberler, 1997). Normally the core and the fundamental motive to become a multinational firm is to gain access to new sources of revenue. Entities that have saturated and exhausted their local markets share and have consequently dried up growth and expansion opportunities close to their local home can turn to multinational expansion to grow and expand their arena of business. Efficient and effective navigation in multiple national markets operation provides a much broader customer and market base from which an organization can quickly generate business. This ensures a company can create new revenue while minimizing costs that is essential to earning profits. It’s of paramount importance and essence for Phase Separation Solution company to venture into the international market, through the Chinese opportunity. This will enable the company diversifies its market from a national level to an international platform. Consequently, as a result of increased market its capital base will rise significantly (International Trade, 2012). The fact that the Chinese inquiries about the possible market opportunities were sincere, venturing into the new market for Phase Separation Solution Company is a real deal,It’simportant to note that China is the most populated country, and hence the company can take advantage of cheap labor in the market. This way, the company will arguably go a long way in saving on its operational cost. The operational scale of the new formed partnership with Chinese enterprises and size of the new corporations will inevitably give Phase Separation Solution Company a chance of benefiting from the vast economies of scale that provides the way to lower average prices and costs for its new consumers in Chinese market. It is of particularly essential and importance for those business organizations that carry extremely high fixed costs, just like in the case of airlines and car manufacturing (Gantz, 2013). Venturing into an international market will automatically have significant advantages Phase Separation Solution Company. Hence, it should venture into the Chinese market after carefully examining and evaluating the structural market dynamics in China. Which opportunity should Thermal Phase Solution pursue? The available Chinese opportunities are two; namely soil remediation and the other is oil recovery from oil sludge. The prevailing market conditions in regards to soil remediation process are tremendous, and it may bring challenges to the vast current market if the company changes to a multinational business organization. Hence, it will be in the best interest of the company to ignore globalization of provision of soil remediation process services as it may adversely affect the current revenues it earns locally. The only better option the company can venture into in the new Chinese market is oil recovery from sludge. This way the best interest of the business is taken into consideration and growth is guaranteed, and the revenues are less likely to be negatively affected. Could Thermal Phase Solution Company pursue both opportunities? It’s very possible for the Phase Separation Solution Company to continue both opportunities that are currently available in the Chinese market. However, it may not be advisable to undertake both opportunities. This is because one of the available opportunities is already in abundance in the Canadian market. Disturbing the already established market may do more harm than good to the revenue turnovers of the company. It is prudent to note that the regime of Canada may opt to reverse the monopoly that is enjoyed by Phase Separation Solution Company, once it becomes a multinational business entity. The revenues that are available in this sector of investment are quite attractive, and the government of Canada may decide to venture into it. This can adversely affect the operation of Phase Separation Solution Company. In regard to oil recovery from oil sludge, the company does not seem to enjoy any state protection; hence the government may not even take keen interest once the enterprise decides to globalize this service provision to other countries around the globe. This will not affect the revenues earned by the corporation. Did Phase Separation Solution Company possess the required resources and capabilities to pursue equity-based entry? Equity capital finance can be defined as capital, in terms of stock or surplus earnings that are free of debt or any other outside borrowings; especially money received for an interest in the ownership of a business entity (Fabozzi& Drake, 2009). Normally equity business financing is usually a way of obtaining capital for the company that involves selling a substantial part interest in the enterprise entity to investors willing to invest in the market. The equity, or ownership position, which investors normally get in return for their money usually take the form of shares in the company. A unit of possession (right) in the company is referred to as a proportion. In comparison to debt funding, which includes loans and other forms of credit, equity financing plan does not in any way involve an obligation to repay the money from the investors in the future. Instead, investment in funders become part-owners and partners in the company, this way they can work out some regulatory programs in the handling of the industry and monitor its progress so as to safeguard their interest ( Mukherjee, 2008). The capital structure of Phase Separation Solution Company is fast and high. This is attributed to its previous success in the Canadian market. This large capital structure provides a superb base for outing of equity funds from investors. The company can ably venture into equity capital outsourcing to strengthen its capital structure and acquire fund for its operational and expansion plans. The available financial records of Phase Separation Solution Company, vividly proves beyond any reasonable doubt the company is future oriented as its growth and development are consistent over the time it has been in existence. It company is under proper stewardship as demonstrated by opportunity identification and their subsequent acquisition. The future of the company is not in any single doubt and is accurately predictable. This way, the company equity is very attractive to investors. For the oil recovery from sludge option, which the company ought to globalize through provision of services to should be financed using equity capital financing option. Equity financing option will provide adequate funds that the enterprise requires venturing into the new market that have been identified in China. This way the financial constrains its likely to experience in its very new undertaking are going to be drastically minimized, and its new operation in China will be smooth in the starting. This way the business has a very high possibility and probability to flourish. References Mukherjee, R. (2008). Value erodes in equity capital markets. The Economic Times, 1-4. International Trade.(2012). World Economic situation and prospects, 47-73. Fabozzi, F. J., & Drake, P. P. (2009). Finance Capital Market. New Jersey: John Wiley and Sons Inc. Gantz, D. A. (2013).Liberalizing International Trade. New York: Cambridge University Press. Haberler, G. (1997). The Theory of International Trade with Its Applications to Commercial Policy. New York: Macmillan Read More