Deborah’s company’s profile: John And Deborahs Corporation
The company was started by both Deborah and her husband back in 2002. The company has been dealing with manufacturing of furniture and it has been doing perfectly well as evidenced with a constant increase in profit. As a result, there distribution throughout the subsequent years had to increase so that to make sure that there was enough customer satisfaction having their retail shops in Boston, phoenix and online catalog sales. The company is one of the highest-price furniture exhibitions thus directing its business to the upper-middle class of people. Their popularity either grew as a result of the support of building houses to the people in need through organizations that deals with that. The products that came out of this company had a popularity such that they were traced everywhere among the households. This was due to the fashionable designs and uniqueness of their mode.
• Is globalization a good move for the company?
Many arguments have come up within big business operations whether to promote their businesses to global level due to unpredicted results that will follow up thereafter. Apparently, organizations have taken a step to try that and they have succeeded very well, making their name to grow all over it is such a good tread as the business is able to earn huge amount of profit, grow their popularity as well as sustaining the business life in future generations.
Contrary to the expectations of what people think, about 5% of the larger groups that decide to move to global market succeed, leaving the bigger percentage in a mess of bad debts, low profit income, and great liabilities. Due to such, reasons most of these businesses end up breaking down and others leave the market even before they are recognized.
Globalization therefore comes out in different perspectives depending on how the organization takes its move and the current situation that faces that organization. It would be so hard for a business just to get decided that they should go global without even considering possibilities and the challenges that comes out of it. The act can be excellent if the business has a strong management system that has well experienced personnel capable of managing well the environment globally. Referring to most successful global businesses, there is a close corporation, leadership system, organized management, excellent customer relations, fulfilling goals and organizations strategy as well as having a common dream to success. On the other hand, if the company does not reach the standards to get into the global market, it cannot sustain itself in whatsoever reasons. For a organization to go global, its services must be recognized at least by the majority of its environment around, have a good customer reputation, making enough profits and have dreams that defines its purpose.
• Rationale behind this decision
There are various motivations that are behind an organization or a business to enter in global market. Most of the holders, CEOs, and probably managers get inspired by the great positions that the individual associated with international business have, how they do their work, how they earn lot of vast profit and so on. Moreover, the decision to do globalization can come from the world business seminars held and people get inspired.
According to the John and Deborah’s company, they decided that it was necessary to join the global market due to the decreasing of sales in the United States. As a result they decided that the best way to overcome the problem was moving out of the smaller area they used to cover and probably expose their product to the larger world.
There are many things to consider before the company move in to join the global market so that it can use as a scale to measure if it qualifies of not. Firstly, is by calculating the stock market value. This is meant to monitor the effectiveness of a business by analyzing its performance of a relevant period of time. But it is worth noting that some exceptions appear where the approach is seen majorly to be influenced by the external economic conditions e.g. the recession times (Mudambi, 2003)
Secondly, the company has to analyze on the accounting ratios because this is the common and believed to be more accurate form of appraising the strategy effectiveness. The benchmark ratio that are identified include:
-Returned On the Invested Capital (ROIC)
-Return On Equity (ROE)
-Return On Assets (ROA)
Thirdly, shows the evaluation by the use of the balanced scorecards. This method came up by David Norton and Robert Kaplan. It is unique process that involves a lot of creative thinking because it disaggregation of profitability power which divides it into each business unit and department that it has. Thus the data ratios are collected from different faculties that include financials, internal business, customer and business goal. Such an approach endow with holistic image against the sorely financial impact of strategy, giving very simple, and detailed information.
A place where the language used can be ready and understood by almost everyone, diverging pricing across various countries.
Operational variables- the organization or the company has to make sure that the place has availability of raw material, adequate labor force, high education skills, adequate security as well as good cost of labor. Taking Canada, the presence of woods favors the Deborah’s company with availability of raw material and less transporting fee.
Other considered factors are, the regulatory body deems. Not only should the country involved be considered due to services and products they offer but also where these product are especially give out. Human resource includes the people who give directions on how to tackle issues. Treasury function factor – it is well evident that businesses which operate internationally need the exchanging rates depending of currency that is most used to the targeted regions (Spilsbury, 2012).
• Background information in support for the decision
Most of the Researchers claim that the international trade has developed to the success of the whole world and thus there is no clear evidence if actually a business organization has to go down into the procedure to so that it can join the global market. It is believed that the presence of modern technology has made the world “a global village” thus making it to connect regardless of the place on is (Mudambi, 2003).
Apparently, the company has a clear image of what it aims. There is no handful disagreement that would make the organization not to get into the global business. And thus all what remains is to evaluate the possible difficulties that would lead to underperformance. Thus the management of the company should sit down and agree if everyone is okay with the decision and if not their opinions about it they discuss what they feel is the best of all.
•Decision support for growth and expansion
The company profile stated that most of the furniture they make is for upper-middle class and thus it target people who have quite a lot of money. However, for this decision to work out the company has to advance on the customers’ satisfaction.
To enhance customers’ satisfactions, all the products should involve all the financial status and price friendly. It is only the customers that can express what quality of a product is. Devoted and consistent customers are considered to be so vital in any given business regardless of their own financial class. Scholtes had a six strategy plan to identify and keep the customers on your side. These included: the speculation of promising outcome, development of an information gathering plan, gathering of information, results scrutiny and analyzing, getting the conclusion legitimacy and finally taking a step to correct the and do what is expected.
Continuous communications with customers are referred to be so vital due to best result reception in a market place. The communication however should entail both the internal and external customers. Knowing the customers preferences, it is easier to provide quality product in order of how they view them. The benefits of involving customers also gives an idea of even inventing a new product, perked up productivity as well as the product enhancement.
• Refuting with the opposing perspective
Globalization or rather global businesses are in existence so that to guarantee the world countries are out to enjoy maximum satisfaction of the trading benefits. Such an international trade is incredible and has a lot that is carried in business world. Nevertheless, an international organization coming up may not only benefit the individuals concerned but the country that own it (Keegan, 2005). Either, some countries absolutely benefit in a certain product market making as an economic advantage either. Globalization entails more of the modern technology that ensures that every individual get access to the information, be even able to buy and sell products and services online without necessarily referring to the geographical location.
The John and Deborah’s company absolutely have to benefit due to such additional advantages and therefore it will be much easier for them to operate even more.
On the other perspective, the company has to join the global business if it is sure to be strong in terms of its internal business units. This deals with important management strategies that are contained within the business and applying them carefully in the global market can bring a do not do the same.
Globalization is vital to today’s world but however, not every organization can be able to fit in. it all depends on the performance in the local market as well as the oriented goal of the company.