Initial analysis of the Issues facing Elecdyne contemplating internationalisation
Our company, Elecdyne (SME, based in Tokyo, started in 1990) is facing increased competition in the Japanese consumer electronics industry and several problems in connection with labour and technology are making the situation even harder. To come through these difficulties the board have decided to go international. The aims of this report are to analyse the future outlook of the electronic industry, to examine three potential countries and to compare them alongside different aspects important for Elecdyne. The most important factors to consider are the availability of labour, technology and access to markets; additional factors such as culture and risk will be also examined. The three potential countries examined in this report are the United Kingdom, China and Hungary. Elecdyne had successfully competed in price for a long time in a very competitive market, so it has clearly some strength but in the last two years it has failed to grow in sales. Globalisation poses new threats and opportunities for the company. Elecdyne can gain advantage from internationalization through achieving lower cost, having access to technologies and new markets just to mention the most important advantages. Additional, favourable effects coming from exportation and FDI (Foreign Direct Investment) could be increases in profits and sales, diversification of risk, protection of domestic markets, economies of scale and useful experiences in other markets according to Lu and Beamish (2001).
The Global Environment
Analysing the global environment is essential to successful internationalization for every business. To present the key trends affecting Elecdyne in the next five years first a STEEP table and then a Group Trend Map will be used to combine the advantages of the two analyses. The STEEP table provides a comparable structure and under its headings it gives an easily understandable overview of the trends. With its clear framework the macro environment from five different dimensions can be analysed. It can be a basis for further analysis as well. At the same time, STEEP lacks the ability to present the linkages between the different factors. The biggest advantage of the Group Trend Map is visualizing the links, so it gives a better explanation of the expected trends and shows the connections between them. This way of presenting the data provides lots of freedom and possibilities that fit well to the nature of fast changing and complex environment. It was designed for SMEs (Small and Medium Sized Enterprises) just like Elecdyne to support creativity and innovation in the examination to detect new opportunities (Carrier et al., 2000).
New social media networking will become increasingly important such as Facebook, Twitter and YouTube. From a more consumer-centric view they are also called Consumer Generated Media and have an important effect on the whole business process, especially on marketing and stakeholder relationships (Blackshaw, 2010). Ageing population leads to new needs in products and bigger reliance on mature-age workers (Knowledge@Australian School of Business, 2010). There will be more women entrepreneur that will change the global marketplace (Delnaney, 2009). Provide solutions and services instead of selling products will be more important in the future (Cherbakov, 2005). Leisure activities are becoming increasingly important in people’s life (Carrier et al., 2000) potentially affecting demands for entertaining electronic products. Stakeholder relationships become more important in organisations to reach its goals (Alexander et al., 2005). Globalisation, consumerism: increased demand from customers all over the world, global enterprises can influence needs in a huge scope. (Appadurai, 1995) TECHNOLOGICAL
The increasing use of internet affects many aspects of business: much information,...
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