international business

Date:

TO: Mr. Obasije

FROM: V.P

SUBJECT: Operation strategy for Spyder Sports Company.

Purpose of the Memo

Being a member of the executive I acknowledge our plans to expand our company to Ethiopia. For this reason, as a vital member and in this case the vice president or the director of international business operations and development I hereby send you, as the chief executive officer of Spyder Sports Company that be set to extend its operations in Ethiopia, my keenly approved operations strategies for the Company. This strategies intends to familiarize the spyder sports company with real issues that a business operating globally encounters. My aim is to prepare you with the relevant knowledge that will ensure not only survival of the Spyder Sport Company but also success of the company in its endeavor to expand its tentacles. Otherwise we need to bring up-to-date some of our strategies that will assure our survival at the international level with regard to our operational field in Ethiopia.

Primary bulleted ideas of the Memo

This are some of the issues that we need to focus on as well as those that we need to implement for a successful operation in Ethiopia. This all regards the strategies we need to adopt for our successful operation in Ethiopia.

International business operation

· Effective Organization of worldwide company (depiction or features)

· International business and foreign direct investment (FDI)

· International business operation and collaborative investments

· Recommendations for Spyder Sports Company and barriers of operating Spyder sports company in Ethiopia /Business operation in Ethiopia (PESTEL analysis)

· Political system in Ethiopia

· Environmental system in Ethiopia

· Social system and business culture in Ethiopia

· Technological system in Ethiopia

· Legal system in Ethiopia rule of law

· Economic system in Ethiopia

Barriers within the micro analysis

· Insufficient knowledge in international business operations.

· Marketing challenges

· International customer relations

· Ineffective management

Globalization and society

· collaborative relationship in Ethiopia

· Collaborative benefits (art of alliance)

· foundations and benefits of ethical behavior

· corporate social responsibility

· social activities and penalties of international businesses

Operational strategy for Spyder Sport Company

· Optimal operation internally for competitiveness

· Optimal operation externally for competitiveness

· Approach to exporting

· Supply chain management

· Supplier network function

· Transportation networks

· Collaborative relationships

· Globalization and society

· Marketing

· Export planning

· Export help organizations( export assistance center in US, OEDIT, SBA, Exim Banks, export management company- markets on behalf of Spyder Sports Company, export trading company- brings sellers as well as buyers together, custom brokers-assist or help to get stuff via customs, freight forwarders, third party logistics for example UPS, DHL, FedEx).

· Export Planning Framework. (It’s a strategy)

Worldwide business operations

I wish to let you know that in extending our tentacles or our business to Ethiopia we will need to assume the roles of an international business. For this reason I wish to let you to have a worldwide business perspective in order to guarantee our survival in the global market (Tortora, Funke, & Case, 2012). As a global business we will comprise both commercial/private transactions as well as government investments and logistics that will take place between two regions , countries or more and in this case between Ethiopia, US and many other countries in the world regardless of our political boundaries. Therefore, we as a global company will sell our commodities and in this case sports cloths across the globe.

Effective Organization of worldwide company

We could spend all we want when it comes to innovating our company. However, to guarantee success in our operations is totally a different thing when it comes to taking our company into a global level. Of Corse, our company is relatively small but a global market is not necessarily for gigantic companies (Tortora, Funke, & Case, 2012). In fact, global markets are not necessarily for the biggest companies, but for those that will implement strategies that will guarantee and oversee global operations or global standards. Therefore, the most important thing is our ability to build a recommended innovative strategy. This will enhance our capabilities with regard to the global market survival.

The following are the features of a company that intends to go global;

Its management should be innovative.

For companies to survive at the global level, the innovators or the supervisor must have in common the “basic table stakes set of innovation capabilities”. These regard the following;

The company should be able to predict or presume the customers’ needs at the ideation level. This will help it redesign products with regard to the customer’s preference. Otherwise, the very basis of every transaction is the understanding that the customer is the king. This is a principal consideration that ensures that every product or service provision should be provided with regard to consumer’s interest. The company, at the very point of product development, should be able to actively engage and interact effectively with the potential customers in order to prove the validity as well as the effectiveness of the concepts that have been adopted (Weiten, 2010). This should also help the marketing manager to test the potential market, the risks as well as the capability to control or regulate the product platform that exists with regard to entry into the new market. Otherwise, as need seekers at the global level, any global company therefore, will require the world class customer insight skills.

A global company should also be able to work with the pilot consumers in order to introduce their products quickly but careful. This is basically done at the very stage of commercialization. For effective and convenient launch of the company globally, the company should ensure that there is coordination within the entire organization with respect to the intended launch.

A company that intends to go global should also comprehend the probable relevance of the immerging form of technologies (Weiten, 2010). Companies are usually technology driven. This is due to the fact that their strategy should always focus on providing a leading edge product or service. To maintain this contemporary consideration they are supposed to be aware of the developing technologies. They should also have the skills that regard managing of product life cycles.

Before we engage the international business operations I wish to recap on the idea of foreign direct investment with regard to our company. This is basically the acquisition or purchase of the controlling interest with regard to our foreign venture by other means other than the purchase of shares. In this case we will have to put into business transaction an exercise that involves the expansion of our company’s operations to Ethiopia (Weiten, 2010). This is a recommendable steps for it serves to increase our profit margin. However, there are we should acknowledge that in our endeavor to expand our operations we should be directed by the advantages or benefits that come with going global. Investments in Ethiopia could work out better depending on the strategic considerations put in place. In embracing the global strategy we will be able to access the larger foreign market in Ethiopia. This is a potential channel to access Ethiopian market, which is a market that restricts foreign companies from entering their domestic market. For us to start a company in Ethiopia with the FDI is basically a means to gain the access.

Another benefit tied with FDI and our entry in Ethiopia is the access to resources. Foreign direct investment could be an effective way of obtaining vital natural resources that Ethiopia has. This for instance could help us access precious metals in Ethiopia or even fossils fuel that could help us in establishing of other companies such as oil companies.

With foreign direct investment we would be able to have a reduction in cost of productions with regard to production of sports clothes. Ethiopia is a developing country, moving our operations to Ethiopia will simply mean drastic reduction or cut in the cost of producing the sports clothes. This is due to the fact that the labor market in Ethiopia is cheaper than that in U.S.A. Also other than the labor market being cheaper, as a result of being developing country Ethiopia has fewer restrictive measures when it comes to production. Otherwise, with foreign direct investment we will access a source of external capital as well as a source of increased revenue (Weiten, 2010). This would eventually lead to economic development to our country. Otherwise, foreign direct investment could serve to expose us to new business practices, economic concepts, management techniques as well as technologies will help further develop our business locally.

International business operation and collaborative investments

In entering a worldwide business operation there are actions as well as agreements that as the consenting organization the Ethiopian government will have to make for us to share the available resources with the aim of attaining a mutual goal or target. This always regards two parties that in their participation agree to share human capital, knowledge as well as finance (Hacker, Diana, and Nancy, Sommers, 2012). In this case our company will require licensing ion order to operate in Ethiopia as a collaborative agreement. This will be a form of right granted to us in order to operate in Ethiopia.

Recommendations for operations in Ethiopia

Political context in Ethiopia

The large part of twenty century, Ethiopia has been a country whose government has totally been regarded as highly centralized. The current ruling party since taking power in the year 1991 has delivered incredible achievements in Ethiopia whereby it has led ambitious reforms that have initiated transitions that have overseen a more democratic form or system of governance as well as decentralized authority. However, there are still fragments of irregularities that have been observed due to the resultant dominance by the ruling party (Mankiw, 2012). This has demonstrated weakens in democracy whereby some instance of election rigging has been perpetrated: for instance, in the year 2005 and 2010 elections among others. Other forms of weakness are observed due to the weak opposition. Otherwise, Ethiopia is recommendable stable political wise in fact stable enough to guarantee business operations in Ethiopia. Therefore, it is recommendable for international business to establish operations in Ethiopia since their safety is well guaranteed

Ethiopian economic and environmental overview

Ethiopia has a population of an estimated figure that is above 84 million. It is a country that is fairly poor in Africa whose currency rates at 390 US dollars. However, it is regarded as one of the economies that is growing at a faster rate in Africa. From the official statistics it records an average of 11 percent real GDP growth. In fact, it would be very far, only that it was restricted by the effects experienced in the years between 2008 and 2011 whereby it registered a drop as a result of twin microeconomic challenges resulting from the then high inflation as well as difficult balance with regard to payment situations.

To safeguard against the inflation risks and the rising living cost the Ethiopian government has taken, measures that limits excessive government expenditure. Otherwise, the Ethiopian economy is anticipated to continually grow at a recommendable healthy pace. Agriculture is basically the back bone of every economy (Mankiw, 2012). The recent government measures as well as the increased donors have served to improve Ethiopia’s agriculture resilience. Land in Ethiopia is a government property. This is very encouraging for investors like us. The use of land certificates would enable us a rent a land where we could carry out our operations. Therefore our continued occupancy is guaranteed in as far as we will always cater for the certificates.

Barriers of carrying out business in Ethiopia (PESTEL Analysis)

Whenever a business intends to carry out its operations there is always the risk or challenges associated with its maneuvers. All of the risk endeavors to propagate loss of investment fund or any other related risks such as low interest of possible loss (Hacker, Diana, and Nancy, Sommers, 2012). For this reason, I wish to bring to your attention the probable loop holes that could serve to heighten the collapse of Spyder Sports Company operations in Ethiopia. Otherwise, in carrying out of business internationally there are some of the risks that target our finance as Spyder Sports Company. Most of the practices that would threaten our finances if we intend to extend our business operations in Ethiopia are with regard to;

Technological overview in Ethiopia

In development scale Ethiopia technology is basically ranked at the very bottom point compared to other nations. This is due to Zenawi’s dictatorship regime. This is the reason why many children live in excessive poverty and in fact only one percent can access computers. out of the 138 It is also ranked at 132 in electricity production word wide, 135 in terms of internet usage, 138 in terms of mobile phone subscription, 133 in terms of adult literacy rate, and in fact 129 in terms of press freedom. Otherwise this is why Ethiopians are already rejecting the 20 years rule of Zenawi’s corrupt and repressive regime.

Overview of the legal system in Ethiopia

There are some of the practices that would serve to inhibit our operations. For example high taxes, unnecessary lengthy procedures when acquiring government documents for example licenses, among others. This is an indication that there is legal problem in Ethiopia whereby, they adopted laws with insignificance contributions (Graff, Birkenstein, & Durst, 2012). The poor government policies enacted would limit our operations. They adopted non benefiting environmental laws. There are poor economic laws. For example, those that inhibit or restrict investment from foreigners. This is a big challenge to our operations. All these social, political and economic rules serve no important function. The inadequacy of the Ethiopia laws poses a risk to our operations.

Business strategies for the Spyder Sports Company

There are buriers of operating business in Ethiopia. Therefore,the following are some of the international strategies with regard to barriers experienced and that if we embrace as Spyder Sports Company will help us undertake our operations. There are some of the internal business environment structure that would basically play the roles of promoting our operations as the Spyder Sports Company

Strategy to counter lack of relevant Knowledge

Knowledge is power. Relevant knowledge is important for all the man power or human resource or basically man power that we intend to employ to ensure daily operations of our company. Otherwise, people with insufficient knowledge will lack the awareness or understanding of carrying out tasks such as documentations. This can motivate for example those working in the financial department to propagate fraudulent acts that eventually might lead to embezzlement of investment funds. Therefore, our business or company should conduct interviews to all the employees intending to join the company or basically to all the employees it intends to hire. Otherwise, those with the relevant credentials should be given first priority.

Marketing strategy

There are marketing challenges that if not carefully taken care of will pose as a threat to our business. Competition is one of them (Graff, Birkenstein, & Durst, 2012). However, as a company we should not pull out due the stiff completion that might be experienced in our operations in Ethiopia. Instead we should embrace mechanisms that will serve to make our operations in Ethiopia worthwhile. As a company we should employ mechanisms that will guarantee our dominance.

Strategic customer relations

Good social relationship serves to improve the image of the business. A business that disregard the social responsibility will always be ineffective in its operations. As such as Spyder Sports Company we should help improve the image of our company.

Management strategy

Management regards several functions. This functions are planning, control, coordinating, organization and stuffing. Planning involves all the process that are carried out to bring forth strategies that would be employed for the betterment of the organization. Regulation of business functions as well as resources is a vital management function. For this reason, we should acknowledge that as the management team we are mandated with some of critical responsibilities and which will ensure the success of the business.

Approach to export

Export is basically our main target. This is due to the kind of produce that we manufacture. Sports clothes are mainly export since they are really worn compared to the other types of cloths. Therefore, with regard to marketing, we should carry out advertisements that mainly improve our export.

Transport networks

As a business that intends to expand its operation we should be aware of the transport channels for our products. This will entail conducting of a survey regarding the routes that are available at our disposal. Adoption of an export channels should be with due regard to the merits that come with proper channels. Otherwise, there are export routes that will limit our operation. In the global market we are supposed to acknowledge the global players that will also enhance our operation.

Globalization and society

There are legal foundations as well as cultural foundations when it comes to ethical behavior in every society. This therefore, requires us to examine the cultural practices in Ethiopia whereby we should establish the cultural demands that we are supposed to adhere to in as far as business operations and cultures are concerned. There could be days that mark important cultural events. Engagement in practice our manufacture of cloths that would assume the cultural [practices in Ethiopia would serve to market our produce locally. Also with regard to requirements from the government there could be stipulated rules or laws that would infringe on our operations. This is due to the fact that there would be practices that are compulsory with regard to culture. To avoid friction with culture of the people which

For our company to thrive it will have to embrace some social practices that will make its profile appealing in the global market. Otherwise, there is importance of global social responsibilities. As a company we should therefore, establish our take in the global social responsibilities. As aforesaid, this will help improve on our image. Otherwise, the success of our business will encompass our provisions towards the social welfare of the communities living within our scope of operation. Also important, is our employees. For any business to be successful, workers need to be motivated. For this reason, Spyder Sports as a global business will therefore provide a platform for our employees to feel appreciated with regard to their efforts, this will be with provision of motivating factors oversee performance. It should also stipulate clear procedures that should be put in place during promotion. The practice of promotion should be one without fraud.

For a long period, there have been numerous cases that encompass power and fairness with regard to how an employee should be treated by the management. The main predicament that will be aired out will be based upon the ethical concerns in business linked to management vs. labor as well as the behavior of human resources. Our arguments should thereby accommodate the internationally recognized business ethical issue concerning to Labor besides

References

Hacker, Diana, and Nancy I. Sommers. (2012)Rules for Writers. Boston: Bedford/St. Martin's,. Print.

Graff, G., Birkenstein, C., & Durst, R. K. (2012). "They say/I say": The moves that matter in academic writing: with readings. New York: W.W. Norton & Co

Mankiw, N. G. (2012). Principles of macroeconomics. Mason, OH: South-Western Cengage Learning.

Reece, J. B. (2015). Campbell biology: Concepts and connections.

Tortora, G. J., Funke, B. R., & Case, C. L. (2012). Microbiology: An introduction. San Francisco, Calif: Benjamin Cummings.

Weiten, W. (2010). Psychology: Themes & variations. Belmont, Calif: Wadsworth/Cengage Learning.

11