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BSA 540 Final Paper 2

BSA 540 Final Paper

NAME;XXX XXXX

XXXX University

Abstract

The country I chose to do business in is the United Kingdom.  The product I chose to sell is ice skates.  The reason I chose this product and country is because while there is professional ice hockey in the United Kingdom, it is not considered elite by any standards when compared to other countries across the globe.  In addition, sports like soccer are the dominant force in the countries.  However, in recent years the popularity of hockey has grown in the United Kingdom.  This means that more people than ever have some form of an interest in the sport, and ice skating is the first step to getting a kid to want to play.  With it not being a dominant force in the UK, this gives the company the opportunity to introduce a product that while in existence, is not one that is considered popular or essential.  It gives the company the chance to set the standard for the market and do it in a manner that will entice more people to want to purchase ice skates.  As more people do that, then more people will want to try to try to play hockey, which could lead to the opportunity to begin selling other pieces of equipment. 

Country Demographics

The United Kingdom has about 66 million people. The majority of the citizens live in England in comparison to Wales, Scotland, and Northern Ireland. Similar to the United States, the United Kingdom typically has their children attend school through the teenage years and into university level afterwards if they choose. The country uses the Pound as its unit for currency.

Culture and Its Impact on Business

The US and the UK are very similar in many cultural regards, which would make it easier to sell a product in this country than others.  One of the big differences in the working culture in the UK vs the US is the rights afforded to workers and the communication.  This makes is necessary to be mindful that the employees in the UK will not want to listen to somebody talk up their accomplishments and instead simply get to the point and talk business.  In addition, it is important to understand that employees in the UK are given extended vacation days, sick leave, and maternal/paternal leave time so it is important to be mindful and understanding if the people are out of the office when you attempt to contact them for business reasons.

Social responsibility efforts to pursue in the UK include ones that the country already focuses heavily on.  The environment, and managing waste and emissions when manufacturing the product.  In addition, focusing on the mental well-being of the employees that we work with in the UK, and by trying to engage the community through events, and other things that can get people to appreciate our work and back what we are trying to do when we being performing business in the country.

One of the major differences in culture between the US and the UK in the workplace involves vacation/sick day/maternity and paternity leave.  The means that one of the biggest things that we will need to keep in mind from a managerial perspective when operating in the UK is ensuring that the employees are given the opportunity to rest, relax, and recoup.  Being understanding of the need to take a break every so often at work will be important when managing employees in the UK.  Scheduling a short break into the work schedule every 2-2.5 hours is something that could help as potential groundwork to show the employees that we value their well-being as much as the work they put in to help the business succeed.

Steps we can take to help manage a cross-cultural team include creating a work schedule that includes employee breaks besides a lunch break to help bridge the culture barrier between the UK and the US.  There is no language barrier but learning different words and phrases that the UK uses in comparison to the US would be an important step, and then training the US employees on these so they can relate better.  We can then put both countries employees into the same training programs so that everybody is on the same page as to what management is expecting.  Finally, planning projects and deadlines around the different time zones will be imperative.  It is unfair to expect things to get done based on a timeline that varies differently from the other countries due to their different locations around the world.

Country’s Banking System

Financial considerations to evaluate will include the exchange rate for the US dollar vs the pound sterling that is used i the United Kingdom.  Understanding the exchange rate will be important when pricing the product as well as when considering where to set up manufacturing plants. 1 pound sterling is equal to about 1.4 US dollars so it would be advantageous to work in the United Kingdom's currency in this scenario.  The people in the country will understand the currency better because it is what they use every day. This will allow us to also understand all costs as if we are working in that country fully, as we will be setting up what is essentially a new market. This allows us to help set the precedent by doing so in the country’s currency so that the managers and employees we have overseas will also be able to better understand the financial side of our growing business.

Trade Environment

The UK does not have many significant trade restrictions or investment barriers that will be needed to worry about when attempting to do business in the country.  This is shown already by the numbers of exports to and imports from the United States that the United Kingdom made in recent years.  The US was the country that the UK exported to the most, as well as the country that it imported from the most.  Therefore, trade between the two countries is already an ongoing thing that does not face many restrictions or holdups.  We will be able to utilize this previously existing relationship in order to do business there.  This also makes it appear to be wise to manufacture the product in the United States vs somewhere else overseas.  This will allow us to avoid worrying about any potential issues that could arise from shipping in products from a different country that does not have the trade relationship that the US and the UK does and can benefit us in the manufacturing costs from a shipping standpoint.

Country’s Political and Legal System

Politically, the United Kingdom is a constitutional monarchy. The head of state is a monarch who is to remain politically neutral. Currently, the Queen is the monarch, and the Prime Minister is the head of government. The political system is a two-part system.

The legal system in the United Kingdom has four legal systems which derives from a particular geographical area due largely to historical reasons. There is English Law, Scots Law, Welsh Law, and Norther Ireland Law. The legal systems default to its jurisdiction and the choice of which jurisdiction law is used is possible only in private law.

Marketing

We are going to pursue a customization strategy.  The reason for this is because although the market will be the same in the sense of marketing to people interested in playing the sport of hockey as well as people who are already playing hockey (no matter what age), the market for hockey in the United Kingdom is dramatically different than that of the United States.  Hockey is not a huge sport over there for there is an additional need to get more people interested in the sport in order to increase our sales.  Therefore, we need to use a customization strategy with a polycentric approach that includes marketing in a way that entices consumers to want to try ice skating, hockey and therefore, our product.

The most important element of the 4 P's for our business in the United Kingdom is promotion.  This is because our product is something that is already a well-known commodity across the globe and even in the country itself.  However, it is not a product that is heavily utilized in the United Kingdom, so the promotion is a key element for our business.  The choice of how we advertise and promote the product will be imperative as we will want to show how much fun ice skating and playing hockey can be in order to entice more people into trying it which will increase demand and sales for our product.

I think the biggest challenge in managing this operation will be to plant the seeds to grow the product interest to begin with.  I think that if we can help increase the desire to ice skate, then we will easily be able to endure massive success in the United Kingdom because there is not currently a huge market for it.  However, the challenge will be to grow the market into one that can be sustainable one to ensure that we can continue to do business overseas.

Political Environment and Strategic Alliances

We could consider a strategic alliance with a more established company that sells ice skates prominently in North America. This could give us the opportunity to help grow the industry by having a proven brand name work with us on various aspects of the industry.  Bauer would be an example of this, but it would be something that would need to be of great benefit for our company, as they would likely not see a great reason to join into any type of arrangement with us with their current standing and profit share.

Government Position Toward Foreign Business

The UK does not have many significant trade restrictions or investment barriers that will be needed to worry about when attempting to do business in the country.  This is shown already by the numbers of exports to and imports from the United States that the United Kingdom made in recent years.  The US was the country that the UK exported to the most, as well as the country that it imported from the most.  Therefore, trade between the two countries is already an ongoing thing that does not face many restrictions or holdups.  We will be able to utilize this previously existing relationship in order to do business there.  This also makes it appear to be wise to manufacture the product in the United States vs somewhere else overseas.  This will allow us to avoid worrying about any potential issues that could arise from shipping in products from a different country that does not have the trade relationship that the US and the UK does and can benefit us in the manufacturing costs from a shipping standpoint.

Business Strategy

The corporate level strategy will be done by a board of directors and will involve the decisions of entry via exporting, setting up manufacturing plants in the United States, and determining if taking part in a strategic alliance makes sense for our company.  This is something that would be worth looking into, but it will come down to the specific arrangement to decide if this is really something our company needs, or if we prefer to go about our business differently.

The main strategy we will implement from the business level, is performing actions to lay the foundation of growth for this industry in the new country.  From a business level we will implement a lot of marketing and promotional type items in the UK itself.  This will involve promoting our product at various youth hockey tourneys with pop up booths.  We can do the same type of thing at various rinks in general to help promote the product.  In addition, it would be wise to try and help sponsor/set up learn to play programs within these rinks.  This will help us grow the business through more of a marketing and promotional style by getting more people interested in the industry at a young age.  By doing so, we will be able to establish a market and continue to sell them our products as they grow up through the sport.

For the functional level, Ice hockey has been growing in recent years in the UK and the country's professional hockey league (while much smaller and of lower caliber than most others across the globe) have begun expanding.  This makes it the perfect opportunity to take part in this market.  We will set up various departments to take part in each component of the business.  A separate department to take part in research and development will be used to constantly develop a better skate to protect against pucks, as well as provide optimal speed and agility when cutting.  A human resources department can be developed to handle those fabrics of the business etc.  However, it will be important to keep the company smaller and give everybody the ability to speak with everybody.  This will allow all employees to work together to achieve our common goal: grow the sport of hockey and give everybody the chance to learn how to skate.

Exporting the goods from the US is going to be the initial mode of entry as we would basically be the first to market company for this industry. This would give us the ability to help grow and set the market, and give us a leg up on competition that tries to enter the market after we are able to establish it.  From there we could consider avenues such as licensing agreements and more as additional methods of entry.

Conclusion

  After reviewing all of the information that has been presented, I would move forward with the opportunity. The reason for this is because it has the potential to be a massive gain for the company if done the right way. With the market for this product existing in the United Kingdom, but not in a large way, it represents an opportunity with great potential. In order to grow our company in the business we would be working in, taking on new opportunities that pose an opportunity for a substantial gain in competitive advantage and establishing an entirely new market is a must. There are already well-known players in the industry of selling ice skates so it would be hard to compete in countries like the United States alone unless we tried a strategy involving being the cheaper alternative. However, by going overseas as well, we can attempt to build and grow a whole new market for ice skates. In doing so, we would gain profit share, credibility, and potentially even clients who come overseas representing our product over the current industry leaders. If done the right way, this is an opportunity that is absolutely worth going for and I would recommend that our company does just that.

 

 

References

https://www.studentjob.co.uk/blog/4509-how-uk-work-culture-differs-from-other-parts-of-the-world

https://www.gov.uk/government/news/our-commitment-to-corporate-social-responsibility-csr

https://www.investopedia.com/terms/f/four-ps.asp

https://www.insider.com/biggest-differences-between-us-and-uk-life

https://www.businessinsider.com/uk-and-us-compared-biggest-cultural-work-difference-2018-4

https://www.business-to-you.com/levels-of-strategy-corporate-business-functional/

https://www.trade.gov/knowledge-product/united-kingdom-trade-barriers

https://www.worldstopexports.com/united-kingdoms-top-import-partners/