The paper aims to analyse the current situation of a fictive company and moreover to work out an adequate internationalisation strategy considering the following three key objectives: 1. Reduce labour costs by shifting the production- centre to a low-income country, 2. Enter new markets in countries with a low level of market satisfaction, 3. Enlarge the range and variety of products through a highly educated R&D-Team.
After evaluating the business environment, three potential target countries for the internationalisation process are assessed. In a next step the strengths, weaknesses, opportunities and threats are lined out. Moreover a PEST-analysis is conducted to prepare for the location decision. Finally, the most adequate method is selected and a brief conclusion and recommendation are given.
Table of Contents
1. Introduction
1.1 Problem and Objective
1.2 Analytical Structure
2. Current and Future Business Environment: STEEP-Table
3. Internationalisation Strategy
3.1 Country Selection
3.2 SWOT-Analysis
3.3 PEST-Analysis
3.3.1 Weighting System
3.3.2 Data Analysis
3.3.3 Location Decision
3.4 Choice of Method
4. Conclusion and Recommendations
Objective and Research Focus
This work aims to analyze the current business situation of the Japanese SME "Elecdyne" and to develop a suitable internationalization strategy to address its declining profitability and competitive challenges by entering new global markets.
- Reduction of labor costs through the relocation of production centers.
- Market expansion into countries with low levels of market satisfaction.
- Product range enhancement via a highly qualified R&D team.
- Evaluation of target countries using STEEP, SWOT, and PEST analytical frameworks.
- Determination of the most effective foreign direct investment (FDI) method.
Excerpt from the Book
1.1 Problem and Objective
Elecdyne, founded in 1990 (Tokyo), is a Japanese SME operating in the electronic segment. Employing 100 people of staff and purely supplied by local companies around Tokyo, the entity offers electronic products, e.g. CD- / DVD-/ MP3-Players and hi-fi equipment, to the Japanese market. Although being competitive on price in the beginning, Elecdyne failed to increase its sales in the last two years.
Primarily the company is affected by the obligation to pay for licences, the high wages compared to e.g. China and the difficulty to hire highly qualified research staff. As a result, the company’s profits have been reduced significantly and losses are forecasted for the next FYE. Thus, there is a high need for restructuring Elecdyne in order to bring it back to a profitable situation and moreover the need for working out an adequate internationalisation strategy to prepare the company for the global business environment (Carrier et al., 2000; USW, 2015).
The following chapters aim to analyse the current situation of Elecdyne and moreover to work out an adequate internationalisation strategy considering the following three key objectives:
1. Reduce labour costs by shifting the production- centre to a low-income country.
2. Enter new markets in countries with a low level of market satisfaction.
3. Enlarge the range and variety of products through a highly educated R&D-Team.
Summary of Chapters
1. Introduction: Outlines the corporate background of Elecdyne, identifies the current financial challenges, and defines the core objectives for the proposed internationalization strategy.
2. Current and Future Business Environment: STEEP-Table: Presents a macro-environmental analysis of social, technological, economic, environmental, and political factors impacting the company.
3. Internationalisation Strategy: Details the country selection process, performs a comprehensive SWOT and PEST-analysis for target regions, and evaluates potential FDI entry methods.
4. Conclusion and Recommendations: Synthesizes the findings of the study and recommends China as the primary target for internationalization, specifically suggesting a joint venture as the most viable market entry method.
Keywords
Elecdyne, Internationalisation, SME, STEEP-Analysis, SWOT-Analysis, PEST-Analysis, Foreign Direct Investment, Market Entry, Joint Venture, Japan, China, Electronic Industry, Cost Reduction, Strategic Planning, Global Business Environment
Frequently Asked Questions
What is the fundamental focus of this publication?
This work focuses on the restructuring and internationalization of the Japanese SME "Elecdyne" to overcome domestic market stagnation and declining profitability.
What are the central themes discussed in the paper?
The paper covers macro-environmental analysis, corporate strategy, international market selection, and foreign direct investment (FDI) methods.
What is the primary research goal?
The primary goal is to develop an adequate internationalization strategy that reduces labor costs, enters underserved markets, and improves the company’s R&D capabilities.
Which scientific methods are utilized?
The study utilizes a combination of STEEP-analysis (social, technological, economic, environmental, political), SWOT-analysis (strengths, weaknesses, opportunities, threats), and PEST-analysis.
What is covered in the main body of the document?
The main body evaluates target countries (Turkey, China, India), conducts a weighted PEST-analysis for location decisions, and provides a comparative assessment of FDI strategies.
Which keywords characterize the work?
Key terms include Internationalisation, Elecdyne, Joint Venture, PEST-Analysis, and Strategic Planning.
Why was China selected as the target country?
China was identified as having the highest overall potential based on the weighted PEST-analysis, particularly due to favorable economic and market-related factors.
Why is a "Joint Venture" recommended as the entry method?
After comparing various FDI methods, a joint venture was selected as the optimal approach for Elecdyne, offering the best balance of speed, cost, and manageable risk.
- Citar trabajo
- Marvin Müller (Autor), Daniil Timofeev (Autor), 2016, Issues Faced By Small and Medium Enterprises In A Global Business Environment, Múnich, GRIN Verlag, https://www.grin.com/document/315561
