Zara is Founded in India - Research Paper Example

India is one of the emerging markets in Asia for doing business. The market offers an opportunity for a variety of industries ranging from retail, automobile, and telecommunication among others. Currently, there are many companies that are eying this market despite the fact that it already has many foreign companies that have already set base India. Zara is one of the giant fashion companies that may be eying the Indian market under its strategic globalization plan. However, it is advisable for Zara to be aware about a number of things in the Indian market that it will have to abide with in order for the company to be accepted by both the government and its people. Firstly, India is a country composed of diverse cultures making it hard to implement any major change in the social market. In addition, introducing new reforms in this market is not easy. As such, it is imperative for Zara to take into account the cultural diversities in India before venturing into the market. Failure to do this is likely to affect the performance of the company in the country. Zara will also have to understand the political condition of the Indian market that will certainly affects the way it does its business. India is among the most democratic nations in Asia, and therefore offers a conducive environment for doing business. Nevertheless, there is high bureaucracy in the administrative system of government marred with high corruption levels. As a result, doing business or obtaining business permit in most cases requires global companies to give bribes before they can be given a go ahead to operate in the country. Therefore, Zara will have to understanding these aspects in order to operate in the country. Further, India has a strong media and non-governmental organizations that keep companies on checks. As a result, Zara will have to keep its dealings clean lest it is exposed by the media as a company that uses sweat shops to make low cost products thereby tarnishing its name as in the case of Wal Mart and Nike (Gallaugher p. 1). Infrastructural issue will also affect the operations of Zara as it relies greatly on technology (Gallaugher p. 4). For instance, most roads are still in pathetic conditions that make transportation of goods in India difficult. In addition, the country is still facing a shortage of power supply, which affects business in the country. As such, Zara will have to consider having a stand by generators to enable the business continue its operations in case of power shortage. With regard to the infrastructure, the company will have to consider the use of other means such as rail, air, and sea in areas with poor roads. It is certain that making such changes will enable Zara adapt easily in India and be able to operate profitably in the long run. For instance, by appreciating the culture of the Indian people, the company will hopefully receive a warm reception from the locals who will identify with the company and begin to buy its products. In addition, by maintaining its first pace in the production of fashion pieces, the company is bound to excel in the Indian market. 2. The First Solar Inc., is a leading company that manufacture and sells solar panels using a thin-film semiconductor technology in the U.S (Sohn 1). The company was founded in 1990 and has since grown to enjoy presence in a number of countries such as Germany and China according to (Sohn 29). However, the company is facing stiff competition from other sources of energy such as hydroelectric power, nuclear power, wind, and other forms of fossil fuels. Nonetheless, the company has put more attention on its major competitor, the conventional generators. The company has singled out the conventional generators as the main source of energy that is competing with the solar modules manufactured by the company. Since the company is still expanding its operations into other countries across the world, arbitrage strategy is one of the best strategies that the company can use for its multinational business strategy for the next decade. Under an arbitrate system, First Solar will view its production flow and disaggregated cost chains in totality and seek to optimize sourcing sales conversions as well as exploit the maker options. Under the strategy, First Solar will also be approach the factory locations, materials, and people as part of a whole system. This will enable the company exploit even regions that highly depend on other sources of energy. For instance, First Solar can employ cultural arbitrage to enter into countries that are culturally sensitive on the use of solar power as a source of energy. It is also common that countries differ based on legally, politically and institutionally. In such a situation, First Solar will use the power of administrative arbitrage to penetrate such markets. In this regard, First Solar will exploit the regulatory differences to establish businesses where labor and environmental laws are advantageous. First solar can also globalize using economic arbitrage system in exploiting the labor cost differentials. In addition, the company can use the power of the economic arbitrage system to get access to experts at a lower cost in the foreign market that the company intends to venture in. First Solar can also employ the portfolio strategy for its multinational business strategy. This is by diversifying in products it deals in to match the tastes and preferences of the Indian people. This can be achieved by studying the Indian market to ascertain the cultural aspects that may affect the reception of the company in the market as recommended by Gallaugher (p. 3). 3. The current world is full of different companies that deal with different products and services. First Solar, for instance, manufactures and sells solar modules. In addition, the company is involved in the production and sale of photovoltaic solar power. Solar module’s value chain It is noted that before a solar module becomes ready for use in conversion of sunlight into eclectic power, it usually undergoes four major stages: Silicon The first step usually involves extraction of silicon from sand. The extracted silica is then heated to melting point usually at high temperature. Once heating has been done, the melted silicon is then purified to form solar-grade silicon. This is then followed by shaping the melted silicon into blocks usually referred to as ingots. The ingots are then cut into small pieces usually of millimeters in thickness (Sohn 8). Wafers The next step involves the formation of wafers from the already prepared solar-grade silicon. Here, the silicon is heated to melt it, before it is cast into ingots. Once the ingots have been formed, they are then broken up into columns at a right angle after which the thin wafers are cut with a wire (Sohn 6). Solar Cells The third stage involves machining in which the wafers are coated on the surface to turn the wafers into solar cells. The cells formed at this stage have all the properties required to covert the heat from sunlight into electric energy. These usually form the basic constituents of a solar module (Sohn 7). Solar Modules This marks the last step in the value chain of a solar panel. Here, solar cells are integrated to form solar modules, which is the end product ready for the generation of solar power. The modules are framed and coated with weatherproof materials. Once this has been done, the solar modules are ready for use. Many companies tend to find it hard deciding whether to keep operations within the company or outsource activities. Nevertheless, it is imperative for a company to start by analyzing the pros and cons of the two methods before making any move. In regard to First Sola, the major activities as earlier stated include designing, manufacturing, and selling of solar modules to customers. Based on the nature of the activities that the company engages in, it will be important that the company keep its activities within the company. This is because it will be more cost effective that outsourcing from outside. Keeping the activities within the company will also help build a team of highly motivated and experienced staff, which will certainly help drive the company to prosperity. In addition, this will help the company strategize well with the labor it has within its disposal, which eliminates any uncertainty, as is the case with outsourcing services from outside. The company can keep the activities within its home country by importing the raw materials, which are not available within the locality. Importing material necessary for manufacturing the solar modules will ensure that the company does not move to other countries with the motive of setting base in such countries merely because of lack of raw materials. In addition, the company can also keep its activities with the country by opening enough brunches in the country and only exporting the finished products to other countries that are in need of the finished products. Work Cited Gallaugher, John. Zara Case: Fast Fashion from Savvy Systems. 2008. Print. Sohn, Bruce. First Solar, Inc. In 2010. Stanford Graduate School of Business. 2010. Print. Read More