PLEASE REVISE THE MEMO BELOW WITH COMMENTS FROM THE RECOMMENDATION. THANKS.
MEMORANDUM
To: Dwight and Ike
From: Wilma Luke
Date: March 18, 2022
Subject: Manufacturing Abroad
I recommend that Easy Chairs move to manufacture overseas to reduce the costs and raise manufacturing of goods, create new jobs, huge income savings, and permit more time for the Leaders of Easy Chairs to concentrate on other parts of the industry.
Manufacturing Abroad
I believe that going global could advantage Easy Chairs in numerous ways. For instance, expanding Easy Chairs overseas will lead to a drop in the cost of production. It will also lead to increased sales and managed risks. A mass of China production selections has the trained labor force and the tools to manufacture your product from raw material to final yield, all at a fraction of the charge. Production in China will permit Easy Chairs to save money on labor forces charges without forgoing the quality of the manufactured goods (Yoo, 2020). Since manufacturing abroad is less costly, Easy Chairs can manufacture their goods in huge quantities.
The capacity to steadily produce a mass of goods and meet demand is vital for success. Another advantage of expanding abroad is the chance for development. Moving abroad will provide Easy Chairs with a new customer base. According to the company history, customers may be in short supply since the establishment of Easy Chairs in Birmingham, Alabama. And the market may no longer provide demand, therefore presenting the opportunity and the need for expansion. However, expanding overseas does present some challenges. The culture, which includes languages, values, and customs, are factors to consider. Many countries speak many different languages, which may present a problem in marketing, designing product labels, and advertising campaigns. However, Easy Chairs has employed military veterans who have been provided with the knowledge and experience of traveling overseas and bridging cultural barriers, giving Easy Chairs an added bonus and minimizing cultural risks. When manufacturing abroad, there are a lot of elements to be thought of and merits related to it.
Roles of Today’s Leaders & Managers
It is the role of managers to execute the leader’s vision, whereas leaders define and articulate a vision the employees can connect with (Dumas & Beinecke, 2018). Managers are tasked with organizing, budgeting, staffing, and problem-solving to attain the anticipated results of a business. On the other hand, leaders are tasked with creating the plan for quick wins, which will silence the naysayers, inspire and boost morale, proving that the employees’ hard work is not for nothing.
In order to begin the expansion, management should create a pool of employees who are able to travel overseas (Gleeson, 2017). This will include employees who speak languages other than English and those who are physically ready and able to transition. SWOT analysis needs to be performed to analyze the competition and the market, which will determine whether there is a demand for the product and whether it will sell.
References
Dumas, C., & Beinecke, R. H. (2018). Change leadership in the 21st century. Journal of Organizational Change Management.
Gleeson (2017). The Fundamental Differences Between Leadership and Management.
Yoo, S. G. (2020, July). A Study on the Factors of Performance Improvement in Manufacturing SMEs on Overseas Market. In International Conference on Frontier Computing (pp. 443-449). Springer, Singapore.
RECOMMENDATIONS :
Recommendation:You have been tasked to provide concise information and new ideas to the leadership of the company.Therefore, Move from the general to specific markets so that you can make constructive recommendations to the leadership of Easy Chairs.Clarification:Examine the advantages and disadvantages of locating in individual, national markets, or at the regional level.You should also discuss the advantages and disadvantages relative to the specific countries you are recommending for Easy Chairs overseas expansion.2. Required element:Focus of the Memorandum:Provide concise information and recommendations (new ideas) that would help the leaders of Easy Chairs make a strategic decision relating to the global business environment.Recommend how the company should address the following:1. Move from the general to specific markets so that you can make constructive recommendations to the leadership of Easy Chairs.2. Building on the company’s current strategy in the Asian region:Location Decision:A. Specific recommendations: Where should the company relocate, and why?B. Specify country (countries) and provide your justification.What are your specific recommendations? 3. Articulate an overseas entry strategy: Select an entry strategy and assess the feasibility of the strategy:Options:● Export Strategy: Export the finished product from the United States● Export Strategy Two: Manufacture the finished product in a specific country (countries) and then export the finished product to several countries.● Export Component Strategy: Manufacture components of the product in the United States and assemble the finished product in a specific country or countries.● Domestic Strategy One: Enter a specific national market with a sole ownership strategy.● Domestic Strategy Two: Joint venture: Enter a specific market with a local partner.Recommendations:The leadership of the company must address three important pre-requisites:1. Conducting an Environmental Scanning of the Global Business Environment.The environmental scanning should cover the regulatory environment and the cost of doing business in any national market or region.See sample of the environmental scanning process below.2. Conducting a SWOT analysis to assess the core capabilities, organizational strengths and weaknesses to expand and capitalize on new opportunities in the global market.3. Defining and understanding cost competitiveness in the new global business environment:A. Moving beyond labor cost and the focus on cost reduction.B. The old assumption that companies invariably relocate in search of cheap labor is no longer completely valid.Companies should now consider the following important factors:1. Physical and institutional infrastructure2. Global supply chain—particularly for intermediate products3. Impact of the communication and transportation revolution4. Changing regulatory framework (liberalization)5. Liberalization of trade regimes—access to national markets6. Technological innovations in emerging and developing economies7. Human resources—Educational advances and availability of skilled labor8. Global distribution of wealth—emerging consumers outside of leading industrial economies.——————————————————————————————–
Environmental Assessment (Scanning) Process:Environmental scanning and continuous monitoring of important variables relating to the company’s strategic objectives and competitiveness:This process is crucial in developing the company’s capability to adapt to changes in the global economy: to respond to the challenges and new requirements and benefit from the new opportunities engendered by globalization.Environmental scanning refers to the process of gathering information and forecasting major trends and competitive pressures that will affect the activities of the company in specific countries and regions vital to its global strategy.
Global Environmental Scanning Process
Decision to Enter Global Markets
Select geographic region (country) to evaluate.
Scan environment for market and economic opportunities including demographic factors
Evaluate market attractiveness and competitive potential
Scan environment and assess investment and market potentials
Scan environment and assess the cost of doing nosiness, regulatory regime and standards
Scan environment for market access and trade barriers
Scan environment and assess economic risks, technological, legal and physical constraints
Evaluate market for cultural, social and technological suitability
Conduct competitive analysis of foreign (MNCs) and local firms
Consider whether and how much to localize products and services
Assess and select entry strategy or strategies
Make final decision and set implementation timetable
Continue environmental scanning process
