BMG705 CRN 30744 Global Business in Context Assignment Sample

Module code and Title: BMG705 CRN 30744 Global Business in Context Assignment Sample

1.0 Introduction

1.1 Organisational Background

Flexciton is a technology solving company that helps to solve the complex project scheduling problems in the semiconductor water fabrication. Flexciton uses the AI and optimisation technology to solve the scheduling problems in the water fabrication.It is a software company that speciaslsioes in the technology implementaion for solving complex problem.

Flexciton has been operating its business for over 10 years and provides cutting-edge technology for the most complex solutions in semiconductor wafer fabrication (Flexciton.com, 2022). Due to their intensive research, engineers have developed a hybrid optimization model to tackle a previously unsolvable production schedule. Main vision of the organisation is to bring Flexciton technology to every factory present globally to conduct manufacturing at such a level that could never be possible.

1.2 Justification for the decision to expansion

There are several reasons behind an expansion, and it is quite necessary for Flexiciton to broaden its business in order to gain additional revenues to a huge extent. Moreover, organisation has successfully improved its business in these 10 years it is required to enhance its brand recognition.

Apart from that, it has been identified that the global semiconductor industry has seemed to be rising and is projected in becoming a trillion-dollar industry within 2030 (Mckinsey.com, 2022). On the other hand, most complex operations have seemed to be conducted in their factories and undergo 1600 steps for transforming computer chips in the most controlled situations (Fortune.com, 2021).

2.0 Critical environmental factors and their impact on internationalisation process

2.1 Factor 1: Political factors associated with the UK.

The political situation has created some problems for various organisations currently operating in the UK while many others have provided their opinion on leaving the UK mostly due to political issues. The application of Brexit, which comes into effect in 2021 has created a problem for the movement of goods between the EU and the UK (Informi.co.uk, 2022).

Due to this reason organisations associated with different sectors has to pay excess taxes and it creates problems for the common people when purchasing any product at higher prices. There is a list of organisations that have been on the verge of leaving the UK with their business such as Airbus, Dyson, Sony, Panasonic, and JP Morgan as well as many other organisations (Walesonline.co.uk, 2019). However, it has been identified that many people can lose their jobs or otherwise need to relocate to organisations which can create huge problems for the country.

Apart from that, political leaders have provided lots of efforts to bring a suitable solution for supply chain resilience with onshoring of semiconductor manufacturing. Moreover, this pandemic and Ukraine Russian war have devastatingly affected the situation and the UK government is not providing necessary efforts to strengthen the semiconductor industry. As stated by Galvão et al. (2021), mostly the UK is out of frame about semiconductor manufacturing for themselves as well as for the global economy. Standing in this situation Flexiciton needs to think about their internationalisation to grab a growing market as well as to find some new clients for them.

Several factors have been identified that can provoke Flexcion to prepare its own platform outside UK in order to gain additional benefits from it. Moreover, an organisation needs to find a place where technologies are developing regularly at a positive pace, especially in developing countries. Apart from that, in such places where there is a huge population most of the organisations would focus here from automobiles to retail.

Understanding the situation, it can be beneficial for Flexicon to establish their business in these where there is lots of organisation and semiconductors is the most useful elements for them. According to Hilmersson et al. (2022), moreover, once they can set up their own factory in other countries it can help them to perform import and export at much lower funds and can become easy to make relations with other countries also. Due to these operations, they can boost their growth spontaneously and can approach new customers to flourish their business and enhances their brand image.

2.2 Factor 2: Demand for semiconductors in developing countries

Analysing the situation of the semiconductor industry it has been identified that it has been invented in the US but only 12% has been prepared in this sector at present. The countries in which semiconductors have been produced to a huge extent are Taiwan, China as well as in South Korea. Moreover, in the coming days, it has seemed to be identified that around 70% of the growth seemed to be predicted from automotive data storage as well as computation (Mckinsey.com, 2022).

Among them, most effective industry mostly dependent on semiconductors will be automobiles, as cars are looking for further upgradation of autonomous driving and e-mobility. Furthermore, by 2030 cost of semiconductors can rise to $4,000 for Level 4 cars as compared to $500 for level 1 cars associated with internal combustion engines (Mckinsey.com, 2022). As battery charging facilities grow with time it can help people residing country to buy most the electric cars as much as possible.

Figure 1: Increasing demands for Semiconductors in coming times (Source: Mckinsey.com, 2022)

The developing countries will be more likely to use EVs with the progress of time and thus with rise of the EVs the rise of the semiconductors must be necessary. Flexciton can provide an effective solution for the development of different items in various industries. However, it is most convicted that Taiwan, China, and Japan are leading producers of semiconductors and have been transporting them to other countries (Shiphub. co, 2022).

Monitoring situation, developing countries are looking for reducing rate of pollution to a serious extent, and thus accepting the transformation of electric vehicles from traditional items. As stated by Bortoluzzi et al. (2018), due to these reasons, it is most necessary that electric vehicles must improve in these countries, and having huge population demands for on-time delivery of semiconductors is a must.

However, standing in this situation Flexciton can withstand situation and provide an adequate solution to their clients in no time. The prediction shows that the global semiconductor industry is poised to get a jump to about a trillion dollar industry and by keeping facts in mind Flexciton needs to make their situations ready for the coming situation.

2.3 Factor 3: Enhances manpower and talents acquisition within organization

Due to the application of Brexit and other political problems, many people lose their jobs, and some were forcefully relocated by rethinking current employability scenarios. The situation only occurs due to government actions of leaving the EU and it creates problems for the common people. Moreover, employees who were coming from other countries to get associated with business leave the UK as an organisation is leaving the UK (Informi.co.uk, 2022).

Now the existing companies present in the UK have felt a problem identifying the right people for their operations and it creates a situation to expand their business in international markets. Moreover, it is considered an important fact in expanding business to hire new and experienced people associated with the business who can be hired at much lower accommodations in developing countries.

Business operations can get huge popularity in this palace which consist of a diverse set of population those having different taste in using semiconductors in different ways. The GDP of the country also seems to be evolving as lots of people were getting jobs which is good for them as well as for the country. As stated by Li et al. (2020), apart from that, raw materials which need to be transported from the manufacturing of suitable items bear lots of amount for it, and thus the price of the products increases to a huge extent apart from their profits.

Now, raw materials that they were transporting by bearing huge costs can be minimised and they can directly avail raw materials. Moreover, it can help them to prepare products at a much lower price and thus customers can easily accept their products and solution properly.

Sometimes it has also been identified that it is hard for HR to find the right people having adequate knowledge of semiconductors. Government initiatives are also important to regulate colleges with technical training and provide necessary assistance for the organisation to perform their business significantly by using their talents.

3.0 Evaluation of its entry mode

Before investing in any segment an organisation needs to evaluate its risks while penetrating into new markets such as political, economical, bargaining power of suppliers, nature of customers, and most importantly competitive rivalry. Flexciton also needs to recognise this item properly so that it can provide adequate benefits from the penetrating market rather than losses. Lots of entry modes are there but the important ones associated with Flexciton must be partnering and strategic Alliance.

As depicted by Spieth et al. (2021), organisation performs most effective and complex tasks in a disciplined manner and thus apart from partnering and licensing it is not possible for them to introduce their business in the new market as they were not renowned or have achieved huge fame in their operations. Necessarily it is required for them to make partnerships and gained adequate fame in operating country and then once necessary can introduce their own business and start their own operating business.

The advantage of using partnering and strategic alliance is that they need to share the cost among each other, as well as risk for losses, is marginally low. The business that is operating in the local market for a certain time understands taste of their customers as well as their demands for products quite well. As discussed by Bhattacharyya (2019), moreover, Flexcion does not need to analyse entire things once again they can ask their partnering organisation to hand them a suitable report then as per those results in, they will proceed with their own plans.

Apart from that, it can be beneficial to grab some of customers that are usually connected with partnering organisatiuon, and initially, it can help them to start businesses by providing necessary solutions to them. Moreover, strategic Alliance is necessary for SMEs like Flaxciton as they are small and must need the required investment for them to flourish.

Apart from that, many governments provide some rules that ounce any foreign organisation has been looking to perform their business in a particular country they need to make a strategic alliance with one of the local companies otherwise they will not get required permission to perform their own business. According to Robson et al. (2019), a similar condition applied in Saudi Arabia once any organisation needs to perform any business they need to look for a Saudi partner and it is quite common in countries pertaining to the Middle East.

4.0 Recommendations

Need to make partner with a strong local organisation for the expansion of their business.

Many organisations having huge fame in the international market has felt several time to run their business whereas other having fame in own market gets success in international market quite easily. Walmart has failed several times while effectively growing its business in Mexico until it identified one strong partner.

On the other hand, Xerox makes strategic alliances to enhance its sales in emerging markets like India, Brazil, and Europe and has gained huge fame. Similarly, Flexciton also needs to adopt some suitable steps to enhance its business in international market and joins with the growth of necessary heights.

Need to organise in those countries having an interest in semiconductors but the rivalry is lower as compared to other semiconductor manufacturing countries- China, Taiwan, and Japan, as well as other countries, have been generating lots of items associated with semiconductors and thus it can become quite difficult for Flexciton to provide necessary competition and run their business.

According to Vaez-Alaei et al. (2022), however, it is necessary that they must introduce themselves in such a country where demands for these items can necessarily grow with progress of time. Monitoring this situation it can be depicted that analysing scenario is necessary before investing in some segments which can return benefits from it.

Reference List

Bhattacharyya, S.S., 2019. Development of an Integrated Model of Strategic Alliance. Indian Journal of Industrial Relations, 54(3).

Bortoluzzi, G., Kadic-Maglajlic, S., Arslanagic-Kalajdzic, M. and Balboni, B., 2018. Innovativeness as a driver of the international expansion of developing markets’ firms: Evidence of curvilinear effects. International Marketing Review.

Flexciton.com, 2022, “Advanced Optimization Technology for global wafer fab scheduling”. Available at: https://www.flexciton.com/technology [Accessed on: 15^th October, 2022].

Fortune.com, 2021, “The global chip shortage is driving demand for this London startup’s software”. Available at: https://fortune.com/2021/10/21/this-startup-could-help-ease-the-semiconductor-shortage/ [Accessed on: 15^th October, 2022].

Galvão, A.R., Mascarenhas, C., Marques, C.S., Braga, V., Moreira, L., Ferreira, P. and Castro, T., 2021. Sustainable International Expansion via Cooperation Networks in the Manufacturing Industries. Sustainability, 13(24), p.14013.

Hearson, M., 2018. Transnational expertise and the expansion of the international tax regime: imposing ‘acceptable’standards. Review of International Political Economy, 25(5), pp.647-671.

Hilmersson, M., Pourmand Hilmersson, F., Chetty, S. and Schweizer, R., 2022. Pace of innovation and speed of small and medium-sized enterprise international expansion. International Small Business Journal, p.02662426221085193.

Informi.co.uk, 2022, “How will Brexit affect my supply chain?”. Available at: https://informi.co.uk/managing-people/brexit-supply-chain-risk [Accessed on: 15^th October, 2022].

Li, Y., Zhang, Y.A. and Shi, W., 2020. Navigating geographic and cultural distances in international expansion: The paradoxical roles of firm size, age, and ownership. Strategic Management Journal, 41(5), pp.921-949.

Mckinsey.com, 2022. “The semiconductor decade: A trillion-dollar industry”. Available at: https://www.mckinsey.com/industries/semiconductors/our-insights/the-semiconductor-decade-a-trillion-dollar-industry [Accessed on: 15^th October, 2022].

Robson, M.J., Katsikeas, C.S., Schlegelmilch, B.B. and Pramböck, B., 2019. Alliance capabilities, interpartner attributes, and performance outcomes in international strategic alliances. Journal of World Business, 54(2), pp.137-153.

Shiphub.co, 2022, “World’s top semiconductor producers”. Available at: https://www.shiphub.co/worlds-top-semiconductors-producers/ [Accessed on: 15^th October, 2022].

Spieth, P., Laudien, S.M. and Meissner, S., 2021. Business model innovation in strategic alliances: a multi‐layer perspective. R&D Management, 51(1), pp.24-39.

Vaez-Alaei, M., Deniaud, I., Marmier, F., Gourc, D. and Cowan, R., 2022. A partner selection framework for strategic alliances based on project complexity and partner’s past experience. Enterprise Information Systems, 16(6), p.1889038.

Walesonline.co.uk, 2019, “The companies leaving or threatening to leave the UK over Brexit”. Available at: https://www.walesonline.co.uk/business/business-news/companies-leaving-threatening-leave-uk-15725311 [Accessed on: 15^th October, 2022].