Introduction
Going international is integral in the economic growth of organizations in the era of intense competition. With increasing globalization, an aspect like internationalization is beneficial to contemporary organizations like MB company. Based in the US, the company deals with manufacturing and selling electronics. However, after operating in the local market, the organization now wants to enter the international market. Australia is the best country for the company to expand its operation due to its friendly business environment (Yeatman, 2020). For example, Australia has a stable economy, which means that majority of its citizens have the ability to purchase the products. Therefore, the company should enter Australia using exporting strategy.
An Overview of MB Electronic Corporation
MB Company is among the leading firms in the US operating in the electronic industry. The company is known for manufacturing and selling quality electronic devices in the US market. For example, it makes products such as TVs, DVD players, laptops, computers, phones, sensors, and many more. It has been competing with companies such as Cisco Systems, Texas Instruments, Zenith and others operating in and outside the US. However, the company has depended on the local market to sell its products. MB Company employs about 850 employees, working to achieve its objectives. In 2021, the organization received a revenue of $97 million from the sale of its products. Therefore, the company is one of the best-performing companies in the US local market.
After building its brand in the local market, the company believes it is time to explore the international market. One of the primary motivations for this decision is to boost the company’s profit margin. When local growth is inadequate, the next logical step is to plan for international expansion. The company’s customer base grows by expanding product distribution to various regions worldwide (Szymczyk, 2020). Revenue grows as the organization provides appealing products and establishes loyalty across international markets. The other reason for going international is to enter the new market. The company saturated the local market and global market provide new market opportunities. Thus, MB Company wants to enter the international market to increase its sales by finding a new market for its products.
The Best Country of Entry
The most appropriate country of entry for the company is Australia. The country’s increasing interest in entertainment and e-commerce transactions has established one of the most attractive markets for the digital market. According to international studies, Australia is now the world’s fourth most appealing online consumer market, behind South Korea, the UK, and the US (Yeatman, 2020). An average Australians spend three and half hours daily on digital television and streaming. This increases the demand for smartphones and other electronic devices. In addition, Australia has established an effective digital infrastructure to support technological integration. This encourages most firms operating in the electronic industry to enter Australia and create a physical presence. Therefore, the country has created a conducive environment for the entry of electronic companies.
The Strategy of Entry
The most appropriate entry strategy into Australia is exporting MB Company products. Most organizations start their strategy of going global by exporting the products. It is defined as the sale of products from one country to another (Hoskisson et al., 2017). The advantage of this entrance approach is that it saves companies money on the costs of setting up shop in a new country. On the other hand, MB Company requires a mechanism to sell and market its products in the new country, normally accomplished through legal arrangements with a local company or distributor. As a result, before exporting, the company must think about labeling and pricing the product effectively for the market.
Business Environment
The environment that the company intends to operate in is the Australian market. Some of the factors of consideration in this environment are political, economic, social, technological, and environmental factors (Hoskisson et al., 2017). Firstly, Australia has a stable political environment and a low government corruption level. In 2020, the GDP of Australia was about $1.4 trillion, which is an indication that it is performing effectively (Statista, 2021). Secondly, Australia has adopted technology such as 5G technology to improve its operations. In addition, the social environment shows that Australians are adventurous and like watching and playing a different sport. This means that the devices should support their active social life. Finally, the Australian government has established several environmental protection laws to which everyone is expected to achieve environmental sustainability.
In addition, Porter’s five forces provide various factors to consider in the environment. Firstly, the rivalry among existing competitors is high due to a high number of firms operating in the electronic industry (Hoskisson et al., 2017). The main competitors in the market are Raytheon Australia, Reliance worldwide, NHP, and many more. Secondly, the threat of entry is high because the capital required to start a business is low. Thirdly, buyers’ purchasing power is low because many customers demand electronic products. Fourthly, the threat of substitutes is low because there are no alternatives to the electronic industry’s products. Finally, the bargaining power of suppliers is high due to the existence of many suppliers.
Cultural Profile of the Local Area
Australia is a diverse country and is home to people from different cultures and communities. The workers will be diverse, friendly, lively, and teamwork-oriented. The Australians pride themselves on being good friends and neighbors to everyone (Yeatman, 2020). Based on this, the company should expect a friendly and outgoing workforce to perform their tasks. In addition, they should expect receptive local governments. They play an integral role in regulating the marketing activities of an organization. MB Company will need the local government to reach out to potential customers at the community level. The company should also expect a receptive and forecast team of suppliers and distributors in the market. Therefore, Australia’s cultural environment is friendly for new businesses to thrive.
Organizational Chart
The chart shows the roles and structure within an organization. The chosen organizational chart for MB Company is matrix as shown in the diagram below. Matrix organizational structure is where the employees of an organization are divided into teams led by a manager (Bich et al., 2019). A matrix organizational structure can assist allow better, more open communication and provide a flexible, dynamic work environment in which resources can be quickly shifted where they are needed. In addition, the structure can meet the demand of local and global customers. Additionally, with this structure, it is easy to assign a role to a manager to handle a given sector. Finally, the matrix organizational chart encourages employees to continue their career development process.
The Staffing Policy for Top-Level Managers
The staffing policy chosen for the top-level managers is geocentric. This staffing approach seeks the most appropriate person for critical positions throughout the firm (Hoskisson et al., 2017). This policy has a lot of benefits, especially when the company wants to operate on a global scale. The key benefit of this method is that it is extremely adaptable. It can help a business better understand other marketplaces and countries’ cultures. A geocentric approach also enables the company to generate international leaders who are at ease working across cultures. This is considered the first step toward developing a unifying corporate culture and a flexible organizational network, which are critical for going international.
Leadership and Motivational Systems
The most effective leadership style for the new business environment is cross-cultural leadership. It encompasses the ability to influence and motivate people’s attitudes and behaviors all across the world to achieve a common organizational goal (Kliewer & Ndirangu, 2019). Cross-cultural leaders have the essential leadership skills in environments with various cultures and are aware of the cultural differences between regions. This leadership style will enable the leadership of MB Company to manage its international market effectively. For example, the company will need to work with distributors in Australia for the sale of its products. With cross-cultural leaders, the company will ensure that the needs of stakeholders in Australia are met to enhance their performance. Therefore, the company’s success in Australia depends on its cross-cultural leadership.
Motivational Systems
The first motivational system can be used to create a conducive working environment. A healthy workplace helps motivate employees and improves their job satisfaction, creativity, and productivity for the organization (Rajapaksa et al., 2019). This will include establishing corporate values and ethical standards that all staff should abide by, like fair employee policy, gender equality, and teamwork. In addition, a good workplace promotes employees’ health and safety. This can be as easy as providing staff with comfortable chairs that do not strain their posture while working. It also involves making sure that the office building is frequently maintained to avoid damage and ensure that the fire prevention system is properly placed.
The second motivation system should involve monetary rewards to employees who have met the established goals. This is an important determinant of employee motivation and performance. A monetary reward system involves an organization offering cash awards, bonuses, commission, gift cards, and many more to the employees who have performed exceedingly (Rajapaksa et al., 2019). In addition, financial incentives are frequently used to motivate managers. The incentive programs for managers, like other pay-for-performance programs, are intended to improve their performance as well as the overall performance of the company. As a result, monetary rewards are frequently used to lower attrition, raise morale and loyalty, enhance employee wellbeing, increase retention, and drive performance.
The third motivational system is where the company’s past performance is used to encourage employees. This is a non-monetary motivation system where an organization inspires its employees through successes and positive experiences (Rajapaksa et al., 2019). The main purpose of this system is to show employees that they are working for the best organization. For example, the leaders are supposed to showcase aspects such as previous performance in terms of revenue, existing organizational culture, values and other crucial aspects that can inspire the employees. In addition, the leaders must ensure that the contents are positive to bring hope and energy to the employees. To achieve this, they should invest their time and resources to effectively communicate the message to their employees.
Communication Problems
There are several communication challenges that the organization might experience in Australia. The first communication challenge is that Australians are dependent on digital communication. This means that the company must invest in its digital infrastructure to effectively communicate with employees in Australia (Yeatman, 2020). The second communication issue is that Australia has a high uncertainty avoidance score. They usually expect formal documentation and structure. This indicates that the company should be careful when talking about aspects that raise uncertainty. For example, they should ensure that effective communication is adopted to enhance positive relationships. Therefore, communication issues in Australia are based on its over-dependence on digital communication and uncertainty avoidance.
Special Control Issues
Table 1: Control Issues
Concerns of The Host Country
Table 2: Concerns
Conclusion
Australia is the most appropriate country of entry for MB corporation on a global scale, and the mode of entry should be exporting. The main reason for the organization going global is expanding its market and increasing sales. The Australian market provides the best platform for the company to sell its products. Apart from being economically stable, the country has a stable government coupled with a diverse culture that supports international organizations. However, the company should consider aspects like cyber security, environmental protection laws, labor policies, and other aspects. To achieve this, the company should hire a legal expert in Australia to help with legislation-based issues. For other aspects, the company should conduct extensive research on the business environment and document the requirements.
References
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Hoskisson, R. E., Hitt, M. A., & Ireland, R. D. (2017). Strategic management: Competitiveness & globalization (12th ed.). Cengage Learning, US.
Kliewer, B. W., & Ndirangu, B. W. (2019). Advancing Reciprocity in Cross-Cultural Leadership Coaching. Journal of Leadership Education, 18(4).
Rajapaksa, D., Gifford, R., Torgler, B., Garcia-Valiñas, M., Athukorala, W., Managi, S., & Wilson, C. (2019). Do monetary and non-monetary incentives influence environmental attitudes and behavior? Evidence from the experimental analysis. Resources, Conservation and Recycling, 149, 168-176. Web.
Statista. (2021). Gross domestic product (GDP) of Australia 2026*.
Szymczyk, K. (2020). International market expansion by the Polish food industry: reasons, strategic goals and methods. International Journal for Quality Research, 14(4), 1207.
Yeatman, A. (2020). Bureaucrats, technocrats, femocrats: Essays on the contemporary Australian state. Routledge.