1. How should Lingham manage the dual structure with Cape Town and Silicon Valley?
In this case, we have a company which headquarter is based to Silicon Valley and has subsidiary into other countries. Cape Town is one of them, and the office was not structured as others, for the only reason that there was no developed market in South Africa for company to invest. Yola was in his internationalization process beginning. The Problems of organization and human resource management were the major source of frustration in the South African’s subsidiary. The Lacks of communication between headquarter and his subsidiary is the worst thing to do when planning to develop a market. To manage this issue, Lingham should have thought first how to
…show more content…
Clear policies, communication (formal, informal), Decentralize, Decision process, Promote understanding
Relocation, Team building: virtual meeting
2. How viable is the proposed expansion into the developing world as a future source of competitive advantage for Yola?
Now days, most companies have an office, subsidiary or are operating abroad through different way. Often developing country such as china, South Africa, Arabic countries, etc are the target of those companies because there are considered such as good investment. With globalisation, companies are competing around the word, and the market which still free for those companies is emerging countries. For a long term strategy, expansion into developing world is profitable. Although the purchasing power of developing countries don’t make enough profit for multinational companies, but their average growth rate still increasing than developed countries because the market is not saturated. And the advantage for Yola to be the first operating company in that territory, is the choice it has, whether for the market, the sector, costumers, ...
As markets don’t react the same way to the different economic problems, it is advisable to diversify its portfolio and to invest in developing country; they have often better resistance than developed countries. Many companies tend to ignore Africa because of the persistent political problems, corruption, so they turned to emerging countries like the BRICs
In a time of global commerce, new business ventures can take on many forms. What used to be local or even national companies have become world-wide. International growth of a business can be extremely beneficial but is not without its challenges. Different countries have different peoples and different cultures - different ways of doing business altogether. If a venture is to be successful, these differences must be well understood.
It is also important to note that quite a number of multinational corporations have in the past setup operations in developing nations in an attempt to make cost savings especially in terms of labor and production costs. With a growing
Globalization may be defined as the integration of the world 's people, firms and government. In the modern context, globalization is usually the result of closer ties in international trade, known as bilateral trade agreements. The WTO and NAFTA are two examples of such bilateral trade agreements. With such agreements, cross-country investment increases. This increase in investment is aided by the increase in information technology and communications, which has undergone a significant advancement over the last two decades with the rise of the Internet and mobile telephony (Green, 2013). It is important to the business to expand; global expansion and globalization would a positive business decision to complete in this process due to the strategic goals and objectives the company possesses. Healthy growth can be accomplished by globalization of specific areas selected and determined through research of market and development of these areas outlined within.
The development of the business environment has determined companies to develop innovative strategies in order to create competitive advantage. Some of them have identified the potential of developing markets in Asia, Africa, and Europe, and have expanded their business to such areas. These countries provide a large pool of cheap skilled workforce that can help these companies reduce their production costs, which leads to reduced prices intended to increase the number of customers. The economic development of these countries provides customers with increased incomes that can purchase companies' products and services.
In addition, developing in the current market fits to the family constraints. Indeed, no more mobility is implied relatively to the current situation. Therefore, the company can focus on improving its managerial competencies and notably strengthen its overseas relationships.
The companies have become a key parameter, especially in the global economy. The size of global companies closely correlated with the decrease of vulnerabilities, with higher resistance to economic shocks occurred along the time and with their bigger chances of success in certain markets. Companies aim not only to optimize their size, but also to strengthen the global production networks, affording them a better competitive position, in a mighty competitive environment and under the pressure of quick development of the technological environment. The size of an organization has become a barrier that stops its entry into the sector, higher than profitability, which explains why some corporations have focused, in recent times, more on strengthening their position abroad, although their economic performance does not justify this endeavor. The process of economic globalization is both a resultant of the increasing activity of multinational organizations and a cause of their increasingly stronger internationally affirmation. However, global organizations activity is much more intense in the developed countries; their impact on the developing countries must not be neglected. Global organizations have a few main features that individualize them from all other forms of companies known so far:
The superimposing factor that gives South Africa such an advantage over other prospective African business environments is that it possesses of a very powerful and sophisticated vantage-point geographically. South Africa is strategically located for manufacturing and exportation into several regions globally and can be an unmitigated platform for MNC’s who may be interested in a venture within this region. The important advantages include regional competitiveness, combined with reduced operational costs and a significantly prominent market access (Safrica.info, 2011).
The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational
building strategies to invest in the emerging markets of the Exotican continent, with the primary
Globalization offers industries many ways to increase their profits. Since businesses and corporations have access to a wider range of potential clients, they have a chance to increase profits. Global competition also
locally in West Africa and beyond, management of the company has decided to expand operations.
Investing in emerging markets offer tempting advantages to investors. The volatile economies of countries considered to be in this category have a potential for extraordinary returns. A caveat to investors considering opportunities in emerging markets are the presence of unstable governments, the chance of nationalization, poor property rights protection, and large swings in prices. Emerging markets are far from a sure thing. But, despite high individual risk, emerging markets can reduce portfolio risk. The volatile economies of these countries have such low correlations compared to the domestic market that they actually provide the greatest degree of diversification.
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.
For emerging countries, the issue is to find capital. They already dispose of a huge population and also a huge potentially workforce: near 1,36billion people in China in 2015 and 973million of people in Sub-Saharan Africa in 2014 (The World Bank, 2015: online). Countries have two ways to find capital to sustain their growth: saving and foreign direct investment (FDI).
Emerging Market Multinationals mainly emerged because domestic companies in developed countries saw a shift in growth pattern once they reached the peak of their economic curve. Growth slowed down and even became stagnant. This was primarily because the markets in the developed countries had already reached their optimum levels. On the other hand, this was the period of time when developing countries began to experience rapid economic growth. This prompted companies to look towards the potential and resources of these emerging markets as their source of salvation and develop