Globalizing a New Enterprise - Essay Example

?Globalizing a New Enterprise Overview There is no denying the fact that Elecdyne is faced with compounded corporate management problems. The problems at Elecdyne are described as compounded because it is not just one problem or a problem coming from one source. Series of causes have currently left the company in a situation where it is battling with employee retention and growth retardation. In the view of the Managing Director, going global would solve the problem. The need to go global could also be described as one of the problems of the company because if the right steps are not taken in this direction, the company is likely to end itself in worse corporate crisis. This paper would therefore address the issue from a heterogeneous point of intervention. This means that not only would the strategies needed for making the company go global be looked at but then interventions and models for rescuing the company from further decline in profit will also be reviewed. Of course when the company gains a good capital resource stand, employee retention would no longer become a problem for it. Global Business Expansion Procedure For the global business expansion to take place, there are a number of procedures to follow. First of these is what the International Expansion Organization (2010) describe as development strategy. As much as authors begin their publications with manuscripts and constructors complete their facilities with architectural plans, it is important that any company seeking to go global have well researched and expert driven strategies in place. Specifically, the International Expansion Organization admonishes businesses “to identify international expansion as a business development strategy to be based on sound business research.” This means that preparation of strategic plan to lead the company into the start of its global venture should be based on detailed research. Through this research, which is referred to in some quarters as feasibility studies, the company should be in a position to decide on a number of issues including the following: 1. Project Scope: the scope should define the areas of the company that will be affected by the expansion project and should include participants as well as end users who will be affected by the global expansion. 2. Current Analysis: This analysis should explain the current mode of expansion implementation. That is, there should be a roadmap on the implementation process. 3. Requirements: The feasibility study must state all resources that will be required to undertake the expansion. These requirements should include both financial and non-financial resources. 4. Approach: The approach for takeoff and implementation should be clearly stated in the plan. Without such an approach, the project will be haphazard. 5. Evaluation: It should be stated clearly, how the company is going to evaluate its progress performance. The evaluation should not only be internalized but should employ the services of external peer reviewers. After all these processes are followed in the strategic plan, the company will be ready to make other moves. The second stage of the global expansion plan should be correction of internal management loopholes. This is to say that there should be management strategies that ensure that the basic crises of the company such as employee turnover and profit retardation are corrected. This stage is very much needed to make the image of the company lucrative to the international market when it finally moves. As ways of maximizing local profits, the following are suggested: 1. Internal Cost Reduction Strategy: Management should be bold on taking decisions that will help in cutting down on internal cost spending in the company. For example in the allocation of funds in the company’s budget, sacrifices should be made to ensure that much capital is directed to profit generation sectors rather than human resource wellbeing programs. The challenge with this strategy will be that committed workers would not want to stay but there will be an eventual outcome that will make the company lucrative to experienced graduates to come onboard. 2. Customer Relationship Management: The company must appreciate the fact that customers make or unmake a company (Prempeh, 2003). For means that customers are the lifeline of every company because it is out of the business they do with the company that the company earns revenue. For this reason, much attention should be paid to the welfare of customers. The company should make good use of today’s technology by employing on the use of new media such as internet to bring the customer closer to the company. One way of doing this is through social media management. Once the company gives customers a lot of attention and include their inputs in the running of the business, the customers will see themselves as part of the company and thus the need to ensure the collective success of the company. 3. Competitive Advantage Maximization: This is very crucial for the global expansion agenda. Indeed, there are several competitors in the electronics industry, doing exactly what Elecdyne is doing. Most of these companies have their own market and customer base already. The only way to make Elecdyne survive the competition therefore is for it to have strong competitive advantage that is ENTIRELY different from what exists among competitors. In the view of Nechako (2011) of Community Futures, two of the best ways the company can do this is by introducing new innovative gadgets that will become market options for consumers and also plying on low cost model to get a larger market rich. After the good local image has been created, the company will now be on the path of going international. Even with the global move, two major stages are advocated. 1. Pilot Expansion Test: This is a stage where the company tries an expansion on a very low note. This stage of the procedure is particularly important, considering the history of the company (though is the hoped that the second stage would help in resuscitating the company). The pilot expansion can include just a next door country neighbour. With this approach, the company will be in a position to learning more about international business especially as this is the company’s first global expansion attempt. It is advocated at this stage that the company incorporate electronic commerce as a way testing their popularity in the global market at this stage. The e-commerce strategy will in itself give the company an idea of countries that they are most likely to fare well. 2. Major Global Market: This will be the final stage. By this stage, it is hoped that the company might have carefully learnt a lot from the start of the procedure; especially the pilot expansion test and e-commerce. The company should therefore be in a position to match up competitors with its own competitive advantage. An important suggestion at this point is for the company to try one of the three business expansion options when it goes global. These are initial public offer, merger and acquisition. Any of these would help in raising the capital base of the company and also opening the company up to partnership with existing investors and companies who are very familiar with the global market and already have their own customer and capital bases. Conclusion Business expansion will continue to be a challenging task for most companies but if Elecdyne would holistically follow the procedures outlined and continue to research more about its business, the company is very much likely to bounce back and become a major company to reckon with in the global electronic business. REFERENCE LIST International Expansion Organization, International Expansion as Business Growth Strategy. 2010. Web. October 7, 2011. Lawson, L. The Importance of Integration During Mergers and Acquisitions. 2008. Web. October 7, 2011 Nechako S. Business expansion: Expansion strategies. 2011. Web. October 7, 2011 Prempeh F. T. Customer Lifeline to Company Growth. 2003. Journal of Modern Management. Vol. 3 No. 2. Property Business, Profit Maximization Model and Theory for Market. 2009. Web. October 7, 2011. Read More