Question:-

BUMGT 5920 – Management in a Global Business Environment Assessment Details 

Assessment Task 2 – Group Activities – Approaches to Global Business  

1. Assessment Description 

In groups of three, students are required to analyse THREE scenarios in which global  business challenges and opportunities are raised. As a team, students need to apply the  themes and theories from the course materials to respond to the scenarios with a focus on  strategic approaches for managers operating in the global business environment. 

Students are required to form their own groups and notify the lecturer of the composition of  the group before the end of the Week 5. Each member of the group must then take the role  of Group Leader for ONE of the Assessment Task 2 scenario analyses. The Group Leader is  responsible for organising group meetings/discussions/communications regarding the  drafting and submission of the group’s response for their allocated scenario analysis. 

The intention of this task is for students to engage in group activities similar to team-oriented  projects you might expect to be assigned in the workforce. As such, each group member is  expected to contribute to the group submission. If a group member is unable to contribute  equally to any of the group responses, the other group members must notify the lecturer  BEFORE the due date for the submission of each scenario analysis. As a result, the lecturer  may reconsider the composition of the groups for these activities. 

2. Criteria used to grade this task:  

Each activity will be marked out of 100 and your group’s average mark (for the 3 activities) will  represent 35% of your total mark for the BUMGT 5920 course. For information on how this task  will be assessed, please refer to Assessment Criteria for each activity. 

3. Submission details: 

Word Limit: 1200 words per scenario. 

Note: In your submissions for each scenario, your group will need to reference, cite and  acknowledge content you use from other sources, according to Federation University rules  on academic integrity. Assignments exceeding the word limit may not be marked and may be  returned to the student for re-writing; assignments less than the required length will risk not  covering the topic adequately and may result in a fail. Do not include references in the word  count. 

Due Date: 

• Scenario 1 – Week 7; 

• Scenario 2 – Week 9; 

• Scenario 3 – Week 11. 

Submission: The student nominated as Group Leader for each scenario is required to  upload their group’s assignment as a Word doc or PDF via the Assessment Task 2 (Activity  1, 2 or 3) submission links on the course Moodle page. 

Feedback and return of work: Assessment Task 2 submissions will be graded and returned  to students electronically, including feedback comments from the assessor, via the task  submission link on the course Moodle page. 

Task Assessor: Lecturer 

Suggested time to devote to this task: Approximately 30 hours per student outside of  class time. 

Scenario 1: Logajob expansion 

Due Date: Week 7 

Logajob is a technology development social enterprise that was started in Melbourne by Bihn Nguyen  only two years ago. While Bihn does not have a technical background, she saw a growing need in her  local community for vulnerable people to be able to more easily access a range of home support  services that enable them to live safely and with dignity in their own homes. 

Bihn recruited a small team of software designers to develop a website and smartphone app that  would enable registered clients to find and contact a suitable service provider to carry out a particular  task for them. Logajob’s clients are often elderly, injured and/or have physical or intellectual  disabilities, and need help with various small tasks and ‘odd jobs’ around their homes. Registered  clients are able to post the ‘job’ on the Logajob website - jobs such as mowing the lawn, fixing a  window or a door, walking their dog or setting up their Wi-Fi connection, and service providers, who  have registered and been approved by the Logajob team, are then able to view the job posts and  contact the client (through Logajob) to accept, or ‘log’ the job. 

The agility, security and reliability of the Logajob platform has become very popular with both clients  and service providers in Australia, and the company has been very successful in working  collaboratively with various government agencies and support programs (such as the Department of  Health and Community Services) that also engage with Logajob clients. As a result, Logajob has  overtaken other web-based platforms such as Gumtree and Facebook in connecting this client group  with service providers. 

The Logajob model has been very successful in the Australian context and the company is now  looking to continue its growth by expanding their business into the global marketplace. While Bihn was  initially focussing on expansion into countries in the Asia/Pacific region, she has also been  approached by the Government of South Africa to establish a presence there. 

Questions: 

To assist Bihn to develop the best strategy for Logajob’s international expansion, you need to prepare  a 3-4 page document that explores the following questions: 

1. What do you see as being the best global business strategy for Logajob? Give reasons for  why you see this as being the model that best fits Logajob's needs. 

2. Which of the market entry modes would you recommend to Bihn? Why? What are the  potential benefits and risks for the company adopting this approach? 

3. Into which countries would you recommend Logajob should enter first? Give reasons for your recommendations.

Scenario 2: Mahindra – Europe 

Due Date: Week 9 

Mahindra and Mahindra Limited is a transnational automotive corporation headquartered in Mumbai, India, and its subsidiary, Mahindra Tractors, is the world’s highest selling tractor brand (by volume). Ramandeep is a manager at Mahindra Tractor’s Mohali (India) manufacturing plant, and is scheduled  to join the company’s finance team on a business trip to visit their manufacturing operations in Europe.  This 10 day trip will include a visit to their forestry and farm equipment manufacturing subsidiary  partners in Turkey and Finland. 

While Ramandeep has travelled regularly within India to work with Mahindra’s subsidiaries and  partners, she will be visiting Europe for the first time and is somewhat apprehensive, as she knows  very little about the countries on their itinerary; their people and how they do business. 

To assist Ramandeep with her preparation for this business trip, your group is required to use the  various cultural comparison tools/resources featured in the course materials to prepare summaries on  doing business in each of these countries (i.e. Turkey and Finland). These summaries should provide  Ramandeep with the essential cross-cultural and business information and advice/recommendations to enable her to engage effectively with the participants in the Mahindra business meetings on this trip.  These summaries should include: 

• An introduction to each country – location, language, currency, cultural diversity, major  industries, system of government etc.; 

• Cultural norms and business etiquette – greetings, names, dining etiquette, dos and don’ts, relationship building, meetings, doing business;  

• Specific areas of similarity and difference between Ramandeep’s culture and the countries/cultures she will be visiting, including advice/recommendations about how to proceed with her meetings. 

Please note, your responses must not be cut & pasted from the cross-cultural  

tools/resources/websites but must be contextualised to the specific needs of this scenario.

Scenario 3: Ethical Fashion Recommendations 

Due Date: Week 11 

You are the leader of a team of buyers of women’s fashion garments and accessories for a large  Australian clothing store. Your company is a well-known family-owned operation, with online and retail  stores in more than 100 locations in Australia, New Zealand, Malaysia and Singapore. Your company  has a reputation for providing affordable clothing for budget-conscious shoppers, and so an important  part of your team’s job in the past has been to source these fashion items at competitive prices, to  enable your stores to keep their prices low. Most of your suppliers are based in China, Vietnam and  Bangladesh.  

However, your store suffered some reputational damage when it was revealed some of your  company’s clothing was being manufactured in the Rana Plaza factory/building in Bangladesh, when it  collapsed in 2013, killing more than 1000 employees. More recently, your company has been criticised  by ethical fashion programs such as Oxfam Australia’s ‘Naughty and Nice’ list and Shop Ethical!  (Ethical Consumer Group) and in 2019/20, was rated an F (the lowest possible rating) in Baptist World  Aid Australia’s Ethical Fashion Guide. By comparison, several of your company’s competitors scored  quite well in these programs.  

Your senior managers are growing concerned about these criticisms and would like to improve the  company’s practices and reputation as an ethical company – particularly in terms of its supply chain  management and ethical fashion. You and your team have been asked to research these ethical  fashion programs (and others), and to draft a 3-4 page plan/document outlining the specific  steps/strategies/actions you recommend for your company to improve the ethics of your supply  chains. This document must: 

• Describe ‘ethical fashion’ and outline why this has become an issue for clothing retailers and  their supply chains.  

• Identify and describe the specific actions/strategies your company should take to improve the  ethics of your supply chain impacts AND provide your rationale (or reasons) to justify your  recommendations. 

• Describe how you would communicate your ethical fashion initiatives to your company’s key  stakeholders – including your suppliers, your customers and your critics. 

Answer:-

Introduction

This report will discuss the best global business strategy for Logajob with reasons why this model best fits the company's needs. This report also discusses the market entry mode for the company, risks, and benefits involved by adopting this approach. Further, the report discusses the country where Logajob should enter first. 

Global business strategies 

Transnational- This strategy is a mix of global and multi-domestic strategies. If Logajob used this strategy its headquarters remain the same in the country of origin, but this strategy allows the implementation same scale of operation in the foreign countries (Bartlett & Beamish, 2018). For this, the company should hire an effective leader who is well experienced and trained in strategic business management and can gain the success of the company with the help of transnational strategy. In this case, Logajob needs to understand the needs of the local consumers and make their decisions and plan services accordingly. But the biggest challenge that can face Logajob is identifying the best management policy that can increase the profit of the company. In this strategy, only significant investment is also needed due which the company can do business with other countries also. For example, Unilever Company best known as transnational a company that is successful to gain global efficiency while trying to adopt local responsiveness (Bartlett & Beamish, 2018).

Multi-domestic/multinational- If Logajob will use this strategy, they need to invest in implementing their presence in the foreign market. The company did not market foreign services to those clients; the company alters and then delivers to connect with a foreign culture, daily requirements, and customs for best satisfying their needs (Elter et al., 2018). Different people in a different country can have different needs, culture, behavior which needs to be understood and fulfilled to gain foreign clients. In this strategy, the headquarters of the company will remain in the original country, but subsidiary land can be established according to the requirements (Elter et al., 2018).

The best strategy for Logajob 

The best-suited strategy for the company is transnational strategy, the main reason behind choosing this strategy is that it has higher efficiency with lower costs. This strategy is less costly than a multi-domestic strategy and it also prioritizes international standardization as well as efficiency (Ilnytskyy et al., 2018). The company should use this strategy because it centralized as many resources as possible which leads to cutting the overall cost of the business. By adopting a transnational strategy the company can also enjoy the same benefit of a multi-domestic strategy by adapting the needs, culture, and customs of the local market where the company decided to run. Usually, international companies faced difficulties in connecting with foreign customers but this allows higher penetration in the market. They can deliver the services according to the client's needs and can also perform investments with a minimum level of budget. For example, if Logajob established its business in South Africa, then with the help of this strategy they can understand the actual needs of clients for satisfying them most (Pruthi et al, 2018). As the company wants to establish their business in different countries then this global business strategy will be very beneficial because they can make an investment in small scale in different countries and save the cost of the company is best satisfying the customers. 

Market entry modes 

The market modes of entry are as follows:-

Licensing- This permits another country in the target country to use their property. The property is normally intangible like trademarks, patents, and production techniques. Logajob needs to pay a fee to the country where they decide to enter, the fee will be payable to be permitted the right use of their property (Bond & Saggi, 2019). If the company selects this mode of market entry then they only require little investment and can get a high return on the investment.

Franchising- This market mode of entry is somewhat similar to the licensing the difference the intellectual property rights are sold to a franchisee. But the rules to run franchises are very strict, they need to follow the process according to them and specific components also need to follow for delivering the services to the customers.

Joint venture- In this mode of entry two companies begin a jointly-owned business. In case Logajob uses this entry mode then one of the owners will be local to the business market. Then the two companies can provide a new business with share control of the joint venture (Qunyong, 2017). 

Best market mode entry 

The best market mode entry for Logajob is a joint venture where the two companies can establish business jointly for satisfying the needs of the customers and gain profit. The reason company should select this market mode of entry is because the company can acquire the local knowledge of the foreign market and also they can share the cost (Loehde et al, 2020).  Another thing is that they can use the reputation of the other country for attracting more foreign clients and customers. 

Benefits of adopting joint venture approach

Shared investment- Each party in the joint venture contributes a certain amount of capital to run the business, according to the terms and conditions of the partnership arrangement. Thus this will helpful for Logajob for reducing the financial burden.

Newmarket penetration- A joint venture may allow Logajob to enter a new market quickly because all the related regulations, as well as logistics, are taken dare by the local player who already knows the local market (Loehde et al, 2020).

Enhanced credibility- Generally young business takes time to gain the trust of the customer and develop a strong customer base but if Logajob will form a joint venture with the well-known brand then this will directly increase their reputation and credibility in the market.

Barriers to competitor- Joint venture also benefit in avoiding competition and pricing pressure. With collaboration with other companies, the company can effectively erect barriers. 

Risk for adopting joint venture approach

): There may be chances that the new partners could have different objectives and follow separate objectives which may risk the success of the venture. For avoiding this Logajob should clearly define and communicate with other companies involved in the joint venture (John & Lawton, 2020).

): There may be chances of cultural mismatches as well as different management styles between the two companies, which may risk the success of the company.

): There may be chances of imbalance in the level of expertise and investment by the different companies which may create a problem for both parties.

Recommendations 

They should expand their business in South Africa because the government of the country is in their support which is very important for the success of any business (Urban, 2019).  The reasons why Logajob should first enter into South Africa are because of the following reasons:- 

As the government of South Africa firstly approach the company would allow international business set up well operations and motivate them to grow and succeed (Boso et al., 2018).  Generally, the government of foreign countries doesn't believe in welcoming international businesses but this can be possible in this case scenario. 

Moreover, South Africa has a stable economy, well-developed financial market, and high availability of labor resources. The country also allows freedom to establish a business of individual choices (Amaeshi et al, 2018). 

Conclusion 

On the ground of the above report, it can be concluded that transnational strategy is the best-suited global business strategy for Logajob. The best market mode of entry for Logajob is joint venture because it has many advantages like enhanced credibility, shared investment, barriers to competitors, and new market penetration. Also, the country good for the company to expand their business in South Africa.

References 

Amaeshi, K., Okupe, A., & Idemudia, U. (Eds.). (2018). Africapitalism: Rethinking the role of business in Africa. Cambridge University Press.

Bartlett, C. A., & Beamish, P. W. (2018). Transnational management. Cambridge University Press.

Bond, E., & Saggi, K. (2019). Price controls versus compulsory licensing: Effects on patent-holders and consumers. The WTO and Economic Development, 303.

Boso, N., Debrah, Y., & Amankwah-Amoah, J. (2018). (How) Does Africa Matter for International Business Scholarship?. AIB Insights, 18(4), 6-9.

Elter, F., Gooderham, P., Dasi, A., & Pedersen, T. (2018). The digital future of Telcos: Dumb pipes or crucial partners in innovation of new business models?. Beta, 32(02), 131-147.

Ilnytskyy, D., Bezrukova, N., & Svichkar, V. (2018). Competitive advantages of transnational corporations under the global economy conditions. Економіка і регіон, (1), 118-126.

John, A., & Lawton, T. C. (2018). International political risk management: Perspectives, approaches and emerging agendas. International Journal of Management Reviews, 20(4), 847-879.

Loehde, A. S. K., Calabro, A., Torchia, M., & Kraus, S. (2020). Joint (Ad) ventures—Family firms' international entry mode choices for emerging markets. International Journal of Entrepreneurial Behavior & Research.

Pruthi, S., Basu, A., & Wright, M. (2018). Ethnic ties, motivations, and home country entry strategy of transnational entrepreneurs. Journal of International Entrepreneurship, 16(2), 210-243.

Qunyong, X. (2017). Inward joint venture experience and entry mode choice of Chinese firms abroad: the moderating roles of CEO power. International Journal of Emerging Markets.

Urban, B. (2019). Social networking and opportunity recognition: a focus on internationalised firms in South Africa. The Journal of Entrepreneurship, 28(2), 295-315.