Auspace Limited - Investing in India, Brazil and South Africa - Case Study Example

Auspace limited   Name: Course: Professor: Date:                     Auspace Limited Auspace Limited is a Company in Mitchell, in the state of Australia. In 2007, Auspace joined the nova group of companies. The company brought on board unique blend of expertise, skills and capabilities. Their main business areas are product for communication, for example, satellite communication, earth terminals, electro- optic instruments and training military modems. The company comprises of 30 members of staff and have attained revenue of AU$5,000,000. The company is mainly concerned with the communication and its instruments and enhancement of communication networks. The company’s main activities in satellite communications are becoming a very important aspect in the current communication. Auspace Limited has an Auspace gateway, this is a new technology, which has proved to be best in tracking systems and provide visibility to all remote workers every time. This technology combines both cellular convoy-tracking systems with the satellite tracking system. Its focus is in solving technical targets and provide solutions that are independent and effective and of low cost. It provides support from the beginning of the business case, set it to a business model, and brings to the attention of the owners. They help in the process until when the company is well set and functional (Auspace). The other service they provide is training of military staff on their modems. This is provided to the government to aid in communication between the military staff. Auspace would provide a designed modem to a different section of the military. Auspace Limited also provides services on space systems and electro-optic instruments. The company provides space systems mostly to the military department and ensures that the systems are well maintained, and its functionality is optimum. In electro- optic instruments, the company uses some power source to fabricate an image of an object through magnification, enlightenment and also thermal imaging. Auspace Limited aids in the installation of earth terminal. These terminals are usually located, in the remote areas from the working place, to ensure that there is minimal interference to the satellite. This requires communication links that permit flow to and from the users of the satellite systems, this links are usually connected via a telephone cable or microwave radio links (Auspace). Auspace Limited being a reseller in Australia, New Zealand and South East Asia can open up to new markets countries like Brazil, India and South Africa. These countries are fast growing and therefore, need the technology at hand. India is highly populated than Brazil and South Africa; this is good for the Company because it will get ready market. India is ranked second in the world as the most populated country (defence forum India). Concerning the demographics of these countries, Brazil is ranked with the highest income and distributed well amongst the people. Auspace limited will be able to have more clients here because most people are able to acquire the products they are offering. However, the percentage of unemployment will highly affect the market since it is the determining factor. The country with the highest unemployment rate is South Africa at 24.9%. According to the survey done in 2011; Brazil follows with an annual rate of 6.0% and India with the lowest with 3.8 % all in the same year. This shows that unemployment level in India is better than Brazil, and South Africa thus, is highly developed. The current economic criteria of India is the third largest in the world and with a Gross Domestic Product of 10% the financial year 2006-07, which has enabled its economy overcome many challenges (Maps of India). Rupee (Re) is India’s currency unit and the current inflation rate is at 7.55% by August 2012. Brazil presents a GDP of $1.6 trillion and the real growth rate is 3.7% with an inflation rate of 3%. Its currency unit is Reais (R$), its major industries are chemical, aircraft, steel, motor vehicles, agriculture and textile (Maps of the world). In South Africa, its Gross domestic Product is annualized at 5%, with a current inflation rate of 5% by July 2011, which has made the exchange rate of the Rand decrease by 1.5% (South Africa Government). Infrastructure in the three countries are highly developed with India and Brazil having better infrastructure than South Africa. Consequently, will enable the Auspace limited be able to roll out their business well. The availability of good communications links and electricity in Brazil and India will be an added advantage. Water and good transport (infrastructure) is highly available in South Africa. Consumption and quality of the product will be high in India because it has a better economy than the other two countries. A stable political and economic situation in Brazil has made it a top investment destination worldwide, it has no political enemies, no ethnic conflict and no threat of terrorism. It is amongst the highest ranking countries in Human Development Index (HDI), this makes it easy to do business in Brazil. In India, it is generally stable although, corruption is threatening to bring down the booming economy, which is currently raising the living standards. South Africa has open-minded trade enticement; this, aimed at encouraging economic growth and development, being a member of World Trade Organization (WTO); its trade agreements pursue the harmonized system. Auspace business model is the rationale on how the company’s creates and distributes its product and services. This is a business strategy, is an important tool to capture, and brings out the design to the current business. This model helps end users to understand the current steps to undertake. The business model used to show simplified description and representation of the complex objects. The model has several objects used to simulate the current task.  These are workflows, units, processes and systems. The graphics used by the business model is called the business model canvas (Hill, Cronk & Wickramasekera, 2011, p.113). A business model offers answers to numerous questions asked, like who is the customer to Auspace, what is the worth of the consumer to the company. It also shows the structure, content and the way of doing things. It can also be implemented as a device for advertising the current services and products offered by the company. This is done by assuming a certain firm, drawing its ways to operate and create a value for the stakeholders to work. This will enable it to make decisions that will be useful to the company. The main advantage of exporting is the creation of economies of scale; this will lead to lower cost because of the provision of the service to the larger market (Ramburut & Welch, 2005, p.181). This will lead to increase in profit to the company. The other advantage is that it is reasonably low cost activity to have an international business (Ramburut & Welch, 2005, pp182-183). Exporting has several disadvantages, which may bring down the company, in exporting, the firm is depended on the transportation costs, which change regularly and thus, can reduce the expected income to the organization (Justin, 2011, p.487). High cost of transportation, for example, of the satellite instruments to a place in Africa, makes it uneconomical to import the product/service. The other disadvantage is working with an agent. Most companies use the services of an agent to enable them get direct communications from their clients. This agent may sometimes have divided loyalty and integrity issues and can become a barrier in foreign trade. Auspace also offers the Trimble Field service Management; this is a solution used to increase securely of mobile workers, reduce paperwork and improves on working relationships. The solutions are easy to install and configure and is costly. This can be changed to suite one’s requirements since they are very flexible. Auspace provides its services and products in Newcastle, Sydney, Melbourne, Adelaide, Canberra and Brisbane. Consultants are available in all these areas. The major uses of the Auspace products are the Australian Defence Force (ADF). The ADF either recruits normally in permanent or reserves, in all the services available, that is Navy, Army or Air force. In the 2010-2011 contract year, the ADF had a total of 59,023 permanent staff that were to work for a full time and a total of 21,850 reserve personnel, who would work part time. They are highly paid and have extra allowances to improve on their lifestyle. In the year, 2012-2013 financial years, the government has allocated AU$24.2 billion for its operations.  ADF have a unique lifestyle, which is not common in other military force; this is in regard to sexual orientation, the Australian Government allows lesbians, and gay men serve in their military force, this has made them have a sense of belonging to be able to serve their government (Australian Defence force site). The international market is more or less same as domestic market; this is because the service they provide is mainly to the military force and can be used, by the communication companies, to enhance their communication. The product usage is on a daily basis. This is because, communication is a day-to-day activity and the satellite needs to be on throughout to enable them in obtaining data and coding for other organizations to benefit from the product. The substitute companies, like the A C & E Pty Limited, which is based in West Ryde, provides the products/services to New South Wales. Its main activity is telecommunication equipments. Although the company provides almost similar products and services as the Auspace limited is not so specific as compared to other organizations. It deals generally in telecommunications equipment. The advantages of the services provided by A C & E Pty Limited are the ability to offer general telecommunications products and services; different end users, to serve their staff well, can use this. These will enable the company to have numerous clients thus, increasing the company’s profit. Its main disadvantage is that its product are not specific thus, not that detailed to a particular concept. Like for the Auspace limited, it majoring in training of military on the modems uses. Its main business is on the military staff, and this can be disadvantageous because the number of clients is minimal. Taking into consideration the quality of products and its prices, Auspace has quality products this is because it is detailed and has done a lot of testing to enable it come up with the systems at hand. Their systems are of high sustainability, accuracy, durability and accountability. Their terminal instruments are located in the furthest and most remote areas and reinstalled where interference is minimal. The price of its products is high compared to A C & E Pty Limited; this is because of what it entails to come up with the products. For example, the Honeywell Global Tracking, this is to develop a satellite-based product, which is fused worldwide in tracking, monitoring and communicating with movable assets. This technology can be introduced in African countries and can aid a lot in the tracking of cargo, vessels in the majority far-flung parts of the continent and be able to be answerable about it. This, will in most cases, cost very high mostly in transporting military equipment, since the tracking devices can be installed whenever the goods are even if it is in the sea, tracking will be easy. The SWOT analysis is a method of planning, which is used to analyze and evaluate the company’s strengths, weakness and its opportunities and the available threats. The strengths of the business are majorly the characteristics of business, this are the advantages the company has, weakness are the disadvantages, what the company cannot be able to meet. The opportunities are the external or internal aspects that can enable the company to improve its present condition, to make it better than it is currently. Threats are mostly external aspects that can hamper with the day-to-day operation of the business (Hill, Cronk, & Wickramasekera, 2011, p.39). Considering Auspace Limited, its strengths are the facts that, it deals with the military force and this will enable it have an edge over other companies dealing with communications in the case of military staff. The other strength is the fact that its products are of high quality and are highly dependable. The internal weakness, in this case, is the expensiveness, of the product and services, they offer to the users. This is disadvantageous because it is blocking out numerous clients, who would have required the service from the company and thus, reducing the company's output. The high prices are also the cause of clients drop of its contract on the way incases the company is not making a profit and views the use to Auspace services as uneconomical. The Company has high opportunities because it can service each government and be able to provide the products needed.  The market niche is well established, and this enables sell of product and service by companies. The others opportunities are the identified market for consultation in numerous areas, which are highly functional. This enables them to get new clients daily and thus, build its clients database. Therefore, they have a great opportunity of growing and expanding their territories to other countries in the globe. The external threats to the company can either be things out of the control of the company this can be the law of the land. This includes the taxes that can be imposed on exports. The taxes can be so high that the company would make minimal profit in case of a transaction (Harris, Kuivalainen & Stoyanova, 2012, p.130). The other threat is for a large consultation to operate at a minor level. The other threat is an environmental aspect; the company cannot change this.  In conclusion, taking into consideration the variables at hand, Auspace limited would gain a lot by investing in India first then Brazil and lastly South Africa. India has a high population and its infrastructure is well developed with it economy being the second best in the world. It has a lower percentage of unemployment thus most people are employed and can be able to use the service provided by Auspace. Brazil on the other hand has a strong and stable economy and the political stability has led to no corruption within the government and this is good for business. South Africa has a good transportation and is one of the emerging markets in Africa and this make it good for Auspace limited to be among the first company to export services here.   References Auspace. Benefit. Retrieved from Auspace. Retrieved from Auspace. Retrieved from Auspace. Without Compromise. Retrieved from, Australian Exporters. Retrieved from Australian Government. Australian Defence Force (ADF). Retrieved 25 September 2012 from < http://australia.gov.au/topics/defence-and-international/australian-defence-force-adf > Czinkota, M.R., Ronkainen, I.A. & Moffett, M.H. (2005). International Business, (7th ed.). South Western/Thomson. Mason, Ohio, USA India’s Population 2012. Retrieved from Harris, S., Kuivalainen, O. & Stoyanova, V. (2012). International Business: New Challenges, New Forms, New Perspectives. Palgrave Macmillan. Hill, C.W.L., Cronk, T., Wickramasekera, R. (2011). Global Business Today: An Asia - Pacific  Perspective. McGraw Hill/Irwin, Australia. Justin, P. (2011). International Business (5th ed.). PHI Learning Pvt. Ltd. Mahoney, D., Trigg, M., Griffin, R. & Pustay, M. (2001). International Business: A Managerial  Perspective, (2nd ed.). Frenchs Forest, NSW, Pearson Australia.  Maps of India. Retrieved from Maps of the world. Retrieved from< http://www.mapsofworld.com/south- america/economy/brazil.html> South Africa Government. Retrieved from McDonald, F. & Burton, F. (2002). International Business. Thompson Menipaz, E. & Menipaz, A. (2011). International Business: Theory and Practice. New York: SAGE. Ramburuth, P. & Welch, C. (2005). Casebook in International Business: Australian and Asia Pacific. Perspectives, Person Education Australia. Wild, J.J., Wild, K.L. & Han, J.C.Y. (2006). International Business: The Challenges of Globalization, (3rd ed.). Upper Saddle River, New Jersey, Pearson/Prentice Hall, USA. Read More