executive summary - files.transtutors.com · web viewtoday, with increasing market challenges and...

INTERNATIONAL BUSINESS 1

International Business

Mukesh Kumar

AIM Business School

20/07/2018

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Table of Contents

Executive Summary.........................................................................................................................3

Introduction......................................................................................................................................4

Justifying the Proposal.....................................................................................................................4

Description of Proposed Expansion.................................................................................................5

Opportunities available in India.......................................................................................................6

Internationalization Potential of India: Analysis of Business Environment....................................8

Management Practices...................................................................................................................10

The Education Industry in India................................................................................................11

People Issues: Differences observed in Human Resources Management and to overcome the

Underlying Challenges..............................................................................................................12

Recommendations..........................................................................................................................16

Conclusion.....................................................................................................................................18

References......................................................................................................................................20

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Executive Summary

Today, with increasing market challenges and changing globalization trends, it is found

that companies are looking for expansion plans. They are looking for market opportunities in the

developing countries of the world. They have analyzed certain markets and are now developing

strategies of entering into a given market. However, it is important for such organizations to first

determine the market needs, analyze the market competitors, analyze culture and traditions, and

then formulate strategies of expansion. This report discusses strategies through which Universal

Networks can expand their operations in India. It also analyzes the Indian market from different

perspectives. Further, this report has highlighted the issue of Human Resources Management and

the challenges that could arise if not handled properly. It has thereby provided recommendations

to manage the Human Resources in a given nation. Finally, it concludes with recommendations

on strategic planning and formulation to achieve desired objectives in a given challenging

environment.

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Introduction

With increasing globalization, organizations are looking for expansion in foreign markets

and increased competition and with advent of new technologies, it is becoming difficult for the

existing organizations to continue their operations in the market (Cummings & Worley, 2014).

There are several companies from around the world that are now shifting their focus onto

expanding their markets in Asian nations. With growing economies, increasing purchasing

power of the people, increased modernization, and people looking for better quality products and

services, organizations should aim for expansion in such nations. The economy of the Asian

nations, such as India and China are one of the highest in entire world.

It is due to these reasons that organizations like Universal Networks should plan for the

expansion. They need to first analyze the opportunities available in the market and then prepare

the expansion plan. Also, they need to identify the risk factors through which they will be able to

overcome the challenges existing in a given market.

This report will continue on the previous proposal of expanding the operations in India. It

will analyze the potential available for business operations and will also analyze the risk factors

associated with it. It will then provide recommendations for future expansion of Universal

Networks in India.

Justifying the Proposal

Universal Networks (UN) is operating in Australia since 2007 and it has performed

beyond the expectations. Today, with new broadcasting technologies and improvisation in the

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television sets, people are looking for such networks that can provide them with better quality

broadcasting channels and networks for entertainment purpose.

However, considering the needs of expansion, Universal Networks needs to analyze the

market scenario of India and identify the available business opportunities. They also need to

determine the Human Resources (HR) Management strategies as the cultural scenario will

change for the employees working in the organization (Mullins, 2010).

The values, beliefs, and traditions of the employees differ between India and Australia. It

is thereby necessary for the top-level management of Universal Networks to identify the HR

needs of the employees and accordingly provide necessary training to them. Only then they will

be able to achieve desired expansion objectives in India.

Description of Proposed Expansion

As identified in the earlier report, the major strengths of India include rising income

levels of the people across the nation. The government has implemented several reforms to

strengthen the infrastructure and transpiration facilities of the nation. With increase in the

population, the demand of different products and services has increased.

With globalization and changing trends of technology, people have become more aware

of the quality aspects related to given products and services. India is already the market leader in

providing outsourcing solutions to multiple IT industries across the globe. However, before

achieving the objectives of expansion, it is important for Universal Networks to determine the

needs of better quality of IT Education and Software Services (Mullins, 2010).

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With the presence of players like NIIT and APTEC, the competition is already growing

in the market. Hence, one cannot deny the fact that there are several opportunities available for

Universal Networks in India. They need to prepare the roadmap through which they will be able

to achieve the expansion objectives in a given scenario.

Opportunities available in India

It is first important to analyze the opportunities available in India and then formulate

strategies for expansion in India. With the recent government reforms, it can be noted that the

government of India is focusing on digitalization and development of infrastructure and

transportation facilities.

There are lots of improvements found in the logistics sector along with announcement of

development of smart cities. Further, the government is also focusing on development of

industrial corridors to ease the starting of new businesses in India. There are several initiatives

taken for modernization of ports, increasing the network of roads, and increasing digitalization

across every field.

The government is also providing training and guidelines, especially to the people of

rural areas on how to operate through digital mediums and channels. The recent figures of export

justify that India is turning into a developed economy. The exports have grown by 11.02% year-

on-year basis in given Financial Year 2017-18.

Further, the total amount of Foreign Direct Investments (FDIs) has also increased to US

$200 billion; it shows positive signs of the development of the economy. Further, India's Index

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of Industrial Production has increased to 7.5 percent, the highest ever achieved over given

period. Also, inflation rates have decreased and people are expecting better quality and products.

The average salaries of Indian employees have increased and as a result their purchasing

power parity index has also increased as shown in below figure. The recent bank recapitalization

policy will fuel the growth of Indian economy and it is expected that the growth will cross 10%

over a given annual year (Fernández & Moraga, 2017). India is expected to have multiple start-

ups across all the sectors considering the increasing demand of the people.

Figure-1: Growth in Purchasing Power Parity of Indian Consumers

One can thereby conclude that the rapid growth of the economy, the increased purchasing

power parity, and increased expectations of quality products and services will assist Universal

Networks to achieve their expansion plans. However, they need to cater to the needs of the

Indian people. They need to design special packages that will cater to the Indian segment; for

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this purpose, they need to conduct another market research that will identify the needs of the

Indian people in the broadcasting and television sector.

Internationalization Potential of India: Analysis of Business Environment

Universal Networks needs to identify the potential of doing business in India. For this

purpose, they need to conduct analysis that will first identify the business outlook of India in the

future and then determine the growth of the Television market in India. After the two major

financial events that took place regarding demonetization and launch of Goods and Services Tax,

the economy is now recovering from India.

The GDP growth rate is expected to be around 7.3% as it has increased from US $1,859

billion to US $2,607 billion as shown in the below figure (Fernández & Moraga, 2017). The

industrial production has also increased during the same period from 3.3 to 4.3. The inflation rate

is controlled form 8.2% in 2013 to 4.3% in 2017 (Fernández & Moraga, 2017). Also, with

introduction of GST Taxes, the total tax collection has increased by 19.5% (Fernández &

Moraga, 2017). The government will thereby focus on spending on infrastructure facilities and

development of the rural areas.

The government is also focusing on introducing technologies across the nation so that it

becomes easy for the people to carry out administrative activities through online mode. It will

save time, efforts, and money of the people. Also, as per the reports of NASSCOM in 2016, there

were 4,750 technology startups and 1,400 new foreign collaborations that were introduced in

India (Fernández & Moraga, 2017). It thereby ensures the ease of doing business in India.

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Figure-2: GDP Growth Pattern of India

Also, the labor force in India is expected to cross the mark of 175 million by 2020.

Considering the total labor costs associated with given industry, it will be easy for Universal

Networks to hire employees at local level. However, they need to understand the culture of India

and accordingly train the employees for the daily operational activities.

Even, the World Bank Reports in 2017 confirm that the private investments in India are

expected to grow by 8.8% on year-to-year basis (Fernández & Moraga, 2017). The rapid

adoption of green mobility solutions like electric vehicles, public transport, and car-pooling will

help India save around US $60 billion every year. The Union government has further given

approval to the North-East Industrial Development Scheme that will not only boost the industrial

activities but will also focused on the socio-cultural aspects of the people.

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There are several initiatives taken in association with the Ministry of Housing and Urban

Poverty Alleviation and Ministry of Skill Development and Entrepreneurship. The first initiative

is taken to provide more than 321,000 homes to the people across 523 cities in India under the

'Pradhan Mantri Awas Yojna'. It will facilitate housing facilities to the people.

The second initiative focuses on providing training to the people in six states to speed up

the implementation of different plans proposed under the given scheme. There is another funding

arranged by the Central Government to improve water drinking and sanitation facilities in the

rural areas of the nation (Fernández & Moraga, 2017). It will thereby foster prosperity and will

also increase literacy levels of the given population. Universal Networks, thereby, needs to

strategically plan their projects for expansion, hire the employees at local level from India, and

thereby manage them to achieve desired objectives of the organization.

Management Practices

It is important for Universal Networks to focus on different aspects while conducting

local and global business. Universal Networks before expanding in other nations of the world

needs to understand the culture and other expectations of the people. It is important for the senior

management to recognize the needs and then implement business strategies that will help them

achieve desired business goals (Rubaii, 2016).

However, before operating in countries like India, it is necessary for the Universal

Networks to understand the laws and norms associated with the nation. They need to follow them

and obtain appropriate licenses before starting their operations in India. Second, they need to

determine the scope and channels of distribution. Based on the overall demand, they can switch

to different distribution channels.

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For example, they can deploy Direct-To-Home (DTH) techniques as well as even start

with online training channels for the purpose of online training programs. Second, it is important

for them to prepare the marketing plan as they need to introduce them in the market. For this

purpose, they need to highlight their products and specifications so that the customers will be

able to differentiate products of Universal Networks with the products of their competitors in the

market.

Universal Networks needs to remain ready for preparing customized products considering

the varying customers’ needs and sophistication levels in India. Even, the purpose and usage of

the customer segments will change and hence, the marketing strategies should be implemented

accordingly. It is important for Universal Networks to also finalize on the business model

through which they will be operating in India. They need to exercise control over the operations

in India so that they can achieve required objectives in the organization.

The IT and Education Industry in India

The major objectives of the IT Education Providers industry include - achieving customer

satisfaction, implementing innovative techniques, focus on profit taking, develop corporate

image, and maximize sales across a given geographical region. The world of education is divided

into three major domains that include – higher education, trade courses and professional training

services. Also, it is important to note that for marketing television is the medium that is utilized

maximum compared to other mediums for the purpose of advertising and promotions (Zhou, Wu,

& Barnes, 2012).

The other mediums include - print media, films, radio advertising, outdoor advertising,

and Internet advertising. The India television industry is expected to grow at 18% over a given

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period of five years. Also, with an increase in the number of TV households, the business

opportunity of further penetration is high.

At present, the online education penetration is still low and also the appetite of the client

is increasing with the advent of new technologies. People are now demanding online services on

their smartphones, smart devices, and tablets through which they will be able to access live and

online data.

Considering the changing trends, Universal Networks need to prepare plan for quality

training, after-sales services, building economies of scale, and emphasizing more on the

developing rural market of India. IT based professional development and training is one of the

most booming sectors compared to other sectors of India.

Also, recent changes observed in the lifestyle and spending patterns will make companies

like Universal Networks to invest in India. However, they need to focus on technological

innovations such as online distribution channels, web-stores, and multiplexes for the purpose of

revolutionizing the sector. They need to implement ways through which they can lower the costs

of operations. They need to focus on the growing middle class with higher disposable incomes to

achieve their desired sales targets in a given competitive scenario.

People Issues: Differences observed in Human Resources Management and to

overcome the Underlying Challenges

It is necessary for the Human Resources (HR) Management to understand the cultural

gap between both the nations. The HR practices in Australia will vary with the HR practices in

India. Hence, the companies need to understand the global culture mechanisms. For example,

McDonalds when entered into India was not aware of the cultures and traditions. As a result,

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their products were heavily opposed by the people. They thereby determined the needs of the

Indian people and made sure to avoid serving of beef products in the menu. Also, they

introduced new health-supportive fast food items through which they were able to attract more

customers to their stores (Crawford, Deale, & Merritt, 2013).

Similarly, even Universal Networks needs to determine the needs of the Indian people.

They need to classify the entire Indian population into different segments. The HR team along

with the marketing and operations team can then prepare the products that will cater to the needs

of the different segments. Even, the marketing campaigns deployed will differ for each of the

segments.

However, the organization needs to deploy HR managers that will take care of all the

international operations and challenges in India. These managers need to have knowledge of the

India culture, understand the needs of the local people, and accordingly hire local employees for

the organization. They will face following HR challenges while operating in India.

The managers need to view the business practices from the perspective of Indian culture.

They need to implement practices through which not only the employees but also the senior

management will follow the cultural norms of the nation. Secondly, the HR team needs to

modify their recruitment processes. Considering the needs of the employees at local level for the

new branches of Universal Networks in India, the recruitment and selection procedures will be

modified.

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Figure-3: International HR Management Challenges

The HR team needs to hire employees from India so that they can act and perform as per

the Indian beliefs, values, and traditions (Kaufmann & Roesch, 2012). Even, the senior

management needs to value these people so that they can contribute toward the organization.

Further, the HR manager needs to provide training to the employees that are recruited outside of

India. Majority of these employees will be working at senior level, however, they need to

understand the Indian landscape and accordingly implement working practices for the

employees. These managers need to design working modules and working shifts so that rest

other employees can follow them.

Further, the senior management at Universal Networks needs to focus on the professional

development of the employees. For this purpose, they can organize training workshops where

they will be enhancing skills and abilities of the employees. The ground-level staff will be

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provided training on the products and services of the organization (Machida, 2012). It will

thereby streamline the entire business flow in a given operating environment.

The HR team needs to make sure of following legal norms of the nation. They need to

pay taxes regularly and as per the schedules, follow working policies as per the laws, and also

ensure protection of the employees so that the job satisfaction levels of the employees will

increase. It is the responsibility of the HR department to provide safe and secure working

environment to the employees.

The HR team also needs to motivate the employees on regular basis so that they can

remain motivated and continue to work in a given organization. There are different models

through which the motivation factors of the employees can be determined. The HR managers can

there promote them or increase their salaries or satisfy their other motivation factors in a given

working environment. The HR department thereby needs to implement following practices:

Formulate organizational objectives in association with the HR objectives of the

organization

Train and assist Middle-level Mangers in formulating daily work strategies and work

schedules

Recruit employees at local level in India so that they can work as per Indian traditions

and work culture (Machida, 2012)

Provide training to all the employees and thereby make sure that employees deliver as

per the expectations of the organization

Monitor the performance of the employees through Performance Evaluation models

and suggest recommendations for improvement at the workplace

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The HR team thus needs to address different requirements of the organization. They will

face challenges at the workplace and hence it is their responsibility to implement solutions to

overcome them. It is important to train employees on team-based working approach so that they

can overcome internal conflicts and focus on work activities to complete them within given

timeframe. Only then Universal Networks will be able to achieve desired sales through this

expansion program.

Recommendations

It is important for the organization to follow the mobility pyramid, as shown below while

managing the HR functions of the organization. Universal Networks after identifying the needs

of the customers in India needs to prepare strategic plan through which they will be able to

expand their operations in India. Second, they need to prepare the blueprint through which they

will be hiring the employees for the Indian operations (Vahlne & Ivarsson, 2014).

For this purpose, the role of HR management in the organization is important as there is a

direct linkage between HRM practices and organizational performance. The HR manager needs

to focus on team-working approach so that it becomes easy for the existing employees of the

organization and the newly joined employees of the organization to work together.

The manager needs to perform the role of leader as well since he will be providing the

necessary directions to rest of the team members. He needs to assign different roles and

responsibilities as per the tasks assigned and then monitor the tasks over a given period. He can

assist the employee to improve the performance based on the requirements of the task.

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Figure-4: The Mobility Pyramid for HR Management

The HR manager needs to understand the Indian culture and modify the strategies of HR

management accordingly. The HR team needs to make sure that the organizational practices

follow the Indian norms, values, beliefs, and traditions. Only then they will be able to overcome

the challenges of globalization and accept the global culture.

There could be several challenges faced while working in a new culture, such as non-

cultural acceptance, increasing group conflicts, unable to complete tasks as per the deadline, lack

of communication, increasing gap between the top-level management and the ground-level staff,

and lack of coordination (Gabrielsson, Gabrielsson, & Seppälä, 2012). The HR team therefore

needs to make sure that they deploy strategies through which they will be able to overcome these

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challenges and solve given problems. Further, the top-level management needs to consider these

challenges and work on each of these problems to get desired solution. Only then employees will

find it relatively easy to perform their job roles and carry out their daily duties in the

organization.

Conclusion

As analyzed the market environment, scanned the market parameters that will effect the

performance of the organization and then formulate strategies for expansion (Thompson &

Strickland, 2003). Universal Networks needs to analyze the strategies implemented by NIIT and

APTECH since they have captured larger market share through innovative business models and

customized pricing.

Also, they have ensured that they exceed the needs and expectations of the customers.

Universal Networks therefore before expanding into India needs to determine the needs of

training and employment; also, they need to look for differentiation factors through which they

will be able to position them in a given market. With increasing competition and changing trends

of globalization it has become mandatory for the organizations to expand in other nations of the

world. They need to explore new business opportunities and then implement their business

strategies to capture them. The top-level management can then introduce the products in a given

market to satisfy the needs of the customers.

Universal Networks also needs to tackle with the Human Resources challenges in a given

environment. With expansion in the Asian nations, the beliefs, traditions, working patterns and

approaches, working styles and cultural values will change. As a result, it will become difficult

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for the HR department to tackle these challenges. Also, they need to hire local personnel

considering the budget constraints of the organization.

Before expanding into India, it is important to analyse the markets, carry out sample tests

of the products in the market, and then launch the products of Universal Networks completely. It

will help both the operations team and the HR team to manage the business functions in a given

business scenario. The HR team needs to provide necessary training to the employees so that

they can perform as per the expectations of the organization.

Also, they need to follow the cultural norms and traditions to overcome the challenges of

the local environment. Finally, the senior management needs to monitor the performance of these

strategies and modify them as and when required. It will subsequently help them achieve

required objectives in a given globalized environment.

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References

Cummings, T., & Worley, C. (2014). Organization development and change. London: Cengage

Learning.

Mullins, L.J. (2010). Management and Organizational Behaviour. Upper Saddle River, NJ:

Prentice Hall.

Thompson, A.A., & Strickland, A.J. (2003). Strategic management: Concepts and cases. Boston:

McGraw-Hill/Irwin.

Gabrielsson, P., Gabrielsson, M., & Seppälä, T. (2012). Marketing Strategies for Foreign

Expansion of Companies Originating in Small and Open Economies: The Consequences

of Strategic Fit and Performance. Journal of International Marketing, 20(2), 25-48.

Vahlne, J., & Ivarsson, I. (2014). The globalization of Swedish MNEs: Empirical evidence and

theoretical explanations. Journal of International Business Studies, 45(3), 227-247.

Machida, S. (2012). Does Globalization Render People More Ethnocentric? Globalization and

People's Views on Cultures. The American Journal of Economics and Sociology, 71(2),

436-469.

Kaufmann, L., & Roesch, J. (2012). Constraints to Building and Deploying Marketing

Capabilities by Emerging Market Firms in Advanced Markets. Journal of International

Marketing, 20(4), 1-24.

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Crawford, A., Deale, C., & Merritt, R. (2013). Taking the pulse of the B & B industry: An

assessment of current marketing practices. Tourism and Hospitality Research, 13(3), 125-

139.

Zhou, L., Wu, A., & Barnes, B. (2012). The Effects of Early Internationalization on Performance

Outcomes in Young International Ventures: The Mediating Role of Marketing

Capabilities. Journal of International Marketing, 20(4), 25-45.

Rubaii, N. (2016). Bringing the 21st-Century Governance Paradigm to Public Affairs Education:

Reimagining How We Teach What We Teach. Journal of Public Affairs Education,

22(4), 467-482.

Fernández, L., & Moraga, E. (2017). Does Customer Value-oriented Management Influence

Financial Results? A Supplier’s Perspective. Innovar: Revista De Ciencias

Administrativas Y Sociales, 27(63), 29-41.

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