Establishing International Business: of Lake Facades - Case Study Example

A Report on Establishing International Business Name Course Instructor College Date of Submission Executive Summary International business approach is the incessant and ample organizational system that is intended to assist companies do business and participate successfully across nationalized borders. Lake Facades selling actions on an international scale can come about in a tactical way born out of high-quality along with careful preparation. Lake Facades operates in facade construction activities where it engages various stakeholders directly and indirectly. Lake Façade’s has identified India as its foremost international entry destination given its speedy industrialisation, its enormous work force plus its gifted populace and the determination of the Indian administration to build the country into an industrial giant in the coming 10 years. The construction industry in India is a fundamental component of the nation’s economy. The industry presents a substantial channel for the economy’s growth through investment and is expected to grow drastically thanks to industrialization, urbanization along with people's growing prospect for better standards of living. Owing to increased competition as well as technology improvement, Lake Facades has employed supply chain management so as to build up competitive advantage. The company could be exposed to various risks in entering the international scene, therefore, it has to comprehend and spot the risks at their earliest juncture so as to put into action measures to hang on to certain risks or transfer them to trim down any probable downbeat effects on the company. Introduction At present, doing business is more global in scale as humanity is becoming progressively more inter-reliant for its trade and industry advancement. International business approach is the incessant and ample organizational system that is intended to assist companies do business and participate successfully across nationalized borders. In international business markets, provisions, investors, locality, associates, and rivals can be found anywhere in the globe. Thriving companies make the best out of opportunities anywhere they are and will be ready for failures (Florini, 2003). Lake Facades selling actions on an international scale can come about in a tactical way born out of high-quality along with careful preparation. The company has to study the universal market, build up products or services that gratify client requirements, develop a proper selling blend and attain its goals and tender client contentment continually. Nowadays, international marketing has budged from understanding all concerning clients, to being familiar with clients in a detailed perspective which captures rivalry, government influence, plus the broader financial, social and supporting worldwide forces that outline the progression of markets. In international marketing, this implies forming relationships, operating directly with host country administration along with business rivals to gain admission to a target market (Gupta and Gorindarajan, 2003). Business Structure Lake Facades operates in facade construction activities. In carrying out these activities the company engages both big and small contractors on the basis of long-term as well as short-term dealings. The company does in-house design from its office located within Sydney. The main suppliers of components are in China plus a few other countries. Production of components was moved to China close to five years ago to boost cost competitiveness. Also, the company employs services expert teams of engineers along with supervisors to watch over the construction of facades. Therefore, straightforwardly employed skilled labor is limited, but the company outsources unskilled labor from the local market (Florini, 2003). Host Country: India Overview The Indian economy supports mutual relationships in public as well as private sector activities to realize economic growth for the nation. The country’s private sector covers activities in all aspects of economic actions that incorporate trade, commerce and industry, devoid of much government intervention. India has a population of over 1.03 billion clients along with a growing middle class of 300-400 million mainly well skilled and can communicate in English. The bulk of population in India is relatively youthful posing a potential to strongly control economic expansion along with spending. This combination offers a fertile position for broader worldwide representation plus a superior market share (IBEF, 2013). India’s per capita income is $1,150 and has a Gross National Product (GNP) of $1 trillion. Consequently, the economy comes in as the sixth biggest economy globally. In addition, India has had an average Gross Domestic Product (GDP) growth rate of over 6 percent per annum over the past decade. Lately India has initiated fundamentals of a mixed economy through deregulation. The economy’s overall financial system is recuperating following the execution of a liberalisation agenda plus imposition of international financial standards, domestic state-owned banks along with other financial bodies are not so much firmly controlled and are extra competently run (IBEF, 2013). Construction Industry in India The construction industry in India presents a substantial channel for the economy’s growth through investment and is expected to grow drastically thanks to industrialization, urbanization along with people's growing prospect for better standards of living. The construction industry is the second main economic activity in India following agriculture. The industry constitutes almost 65 percent of the entire investment in infrastructure and is anticipated to be the leading benefactor of the flow in infrastructural outlay in the coming five years. Investment in construction covers just about 11 percent of India’s GDP. Further, €239.68 billion is expected to be spent in infrastructural developments in the following 5 to 10 years thereby presenting an enormous boost up to the whole construction industry (Research and Markets, 2013). Opportunities in the Construction Industry in India The Indian real estate industry is expected to hit €58 billion by 2015. Foreign Direct Investment (FDI) by itself may well attain an enormous jump to €19 billion over the next 10 years. Public sector ventures through Public Private Partnerships (PPPs) will fetch extra openings. Developing supply chain through participation in big projects is expected to improve the chances in construction. Financial support including loans, insurance cover along with people’s income growth will sustain the construction industry. Business Model and Sustenance Lake Façade’s international approach will be integrated in the company’s strategy taken as a whole together with its business at home and out of the country. The model will cover four facets of strategy that comprise sharing of resources, competitive lead, as well as synergy (Florini, 2003). Allocation of company resources will be done in a way that allows the company to operate productively in the selected market. Taking into consideration the comparative significance of a range of business operations, a bulk of resources will go to two main regions that are Australia and China. Australia holds the base where a lot of company operations will be conducted from and will therefore require a significant share of resources. China holds the company’s main source of components that also call for a large share of resources that will ensure sustained and timely supply of resources (Gupta and Gorindarajan, 2003). In India Lake Façade’s will strive to capture a larger market division given its better-quality technology. The company will also put into practice additionally competent organizational customs as well as supply structures, and develop eminent products. In addition, the company will develop a map for nourishing these areas of competitive advantage. At long last, the international business plan will set up an arrangement for the company to facilitate its different functions and operations to help one another (Florini, 2003). A lot of companies are nowadays outsourcing loads of their operations globally. In the same way, Lake Façade’s should contract out manufacture of components to the lower production cost. Also the company outsources low skilled labour in Australia a technique that will be adopted internationally to continue reducing costs. This will be put into operation in accordance with the requisite detailed criteria (Gupta and Gorindarajan, 2003). Supply Chain Architect and Consultants Direct Suppliers and Sub-contractors Indirect Suppliers Initiative Tendering Design Procurement Fixers Major Camping Ionic Ten Use Hand-over Construction on Site Operation Capacity Materials Production Resident Principal Information flow of orders, schedules, e.t.c Material flow of supplies, production, e.t.c Supply chain entails the association of organizations drawn in the diverse systems and actions that end in the formation of products for ultimate utilization by the customer. Owing to increased competition as well as technology advancement a lot of businesses employ supply chain management in their strategies so as to build competitive advantage. This mission is above all not easy in the construction industry for the reason that construction supply chains are intricate in formation and comprise numerous engaged together in a project-based transitory mode. The figure above indicates the flows of materials and products and identifies the various relationships among participating members (Isatto and Formoso, 2006). Risk Analysis and Management The construction industry has greatly transformed in the recent past. The power of institutional investors in the industry is redoubtable. To be successful in this industry, a company requires allocating more resources and building up an elevated scale of active cleverness. The industry is susceptible to a number of risks ranging from political risks, environmental risks, and financial risks, among others. Risk is inbuilt and calls for suitable management in theory as well as practically (John and Edward, 2003). Lake Facades could be exposed to various risks in entering the international scene including business failure, risk of project financial mislay, incidents of major construction catastrophe, disputes and default of business partners. In managing the risks, the company has to comprehend and spot the risks at their earliest juncture so as to put into action measures to hang on to certain risks or transfer them to trim down any probable downbeat effects on the company (John and Edward, 2003). Conclusion Expansion to the international scale for Lake Facades is ripe. There are great opportunities in India. The country has a robust economy and there are prospects for improvement and the construction industry is blossoming.The company has to be operationalized in a cautious manner and appropriate structure set for the eminent expansion. Risks in the construction industry are likely and risk management initiatives should be set up for early identification and mitigation. References Florini, A, 2003, Business and Global Governance, Brookings Review, p.5–8 Gupta, A.K, and Gorindarajan V, 2003, Global Strategy and the Organization, John Wiley & Sons Publishers IBEF, 2013, Indian Economy Overview, viewed 2 June 2013 < http://www.ibef.org/india-at-a-glance/India-diverse-democratic-dynamic/indian-economy-overview.aspx> Isatto, E. L, and Formoso, C. T, 2006, The Inter-Firm Coordination of the Construction Project Supply Chain, Proceedings IGLC-14, p.293-308 John, W, and Edward, G.G, 2003, International Project Risk Assessment, A Report on the Centre Construction Industry Studies, University of Texas, Austin, p.11-15 Research and Markets, 2013, Opportunity on the Construction Industry in India, viewed 1 June 2013, Read More