Risk Analysis – A U.S. Fishing Boat Manufacturer

Risk Analysis – A U.S. Fishing Boat Manufacturer

Potential Risks the Company in the Given Scenario Encounters in Entering the New Market

Entering a new market is a risky venture for any organization. The requirement to enter the Indian market poses significant risks. One of these risks is based on culture. Moving the firm from the American market into the Indian market introduces a significant cultural shift in the company’s managerial and operational practices. The cultural aspects that bring about this risk include language, beliefs, norms, and client preferences (Edwards, 2014). The American-based boat manufacturer would need first to understand the Indian market as a base for operation and the clients as well to avoid significant fallouts in relation to culture. The cultural risk could impact the company negatively if it fails to fit in the new market. The lack of cultural fit may lead to the development of products that do not serve the market, as well as detrimental advertising strategies.

The second type of risk that the country may encounter is the economic aspect. The economic conditions in India and the USA differ. Different monetary factors that affect the operation of businesses and their likelihood to succeed exist in both environments. The labor aspects that are pertinent to the country’s financial condition are different as well (Edwards, 2014). The company must ensure that it adjusts its operations to match the economic needs and uphold total compliance with labor and financial laws. Failure or inability to comply may affect the organization’s reputation and standing in public. This can lead to a lack of approvals to conduct business.

 SWOT Analysis of the Company

Internal Strengths of the Company

Culture of innovation

The US-based company relies on innovation in its business activities. This has led to the creation of a culture that supports innovation. The culture is characterized by incentives that encourage employees to produce creative ideas. The presence of testing laboratories provides an avenue to ascertain the viability of these ideas. In addition, the collaboration with other technology companies that could improve the company’s designs indicates the organization’s commitment to innovation.

Employee engagement

The company demonstrates a significant commitment to engaging its employees in product development processes as well as decision-making. Employees are encouraged to provide creative ideas that could lead to innovative products through incentives. Employees are empowered to take part in the evaluation of the company’s decisions which magnifies their worth to the entity.

Internal Weaknesses of the Company.

Founder employee boundary

The company’s level of employee engagement could result in blurring the boundaries that exist between founders and staff members. The consideration that management gives to employees as equal partners could eliminate any boundaries and structures that are still necessary for seamless operations.

 Authority

The founders’ authority could be overpowered or assumed since employees are considered equal partners in the organization. This may make the decision-making process difficult due to a lack of oversight.

External Opportunities for the Company

Market diversification

The company has a chance to diversify its current market from the USA to India by establishing operations in the country. This presents a significant opportunity to expand its existing operations and increase its revenue.

Entry into a new market

Entry into the Indian market offers a stepping stone to the company’s expansion plans. It also promotes the company’s ability to gain a new market share in India and other Asian regions that find its products beneficial.

External Threats to the Company

Competition

Entry into the new market will present greater competition from the regional and global companies that offer comparable products. Therefore, the company should establish inimitable competitive advantages that ensure it stands out.

Regulations

The company will encounter new regulations in the new markets, which may make business more challenging. These regulations could affect business or labor practices.

 Strategic Recommendations Based Upon the Weaknesses and Threats

The company needs to convert the current weaknesses and threats into opportunities or strengths. While upholding employee engagement is critical to an organization’s success, it is necessary to create a clear structure that communicates the company’s authority to all stakeholders. The founders’ and employees’ equal positioning should not introduce authority issues. It should be an element of promoting success. The company’s founders should ensure that shared decision-making is concluded with a comprehensive cost-benefit analysis of each proposal only to choose the most beneficial ideas. This strategy should ensure that the founders’ authority over employees is clear.

The threat of competition demands that the company create inimitable competitive advantages that ensure its preferred provider. The high customer responsiveness can be enhanced to ensure it prioritizes their needs. This attribute can be helpful in rising above the competition. Secondly, it is necessary to ensure compliance with the various regulations. Compliance will reduce business disruptions by respective agencies. Therefore, the company should ensure it complies with the various regulations in the Indian market.

Creation of a Unique Competitive Advantage

Customer responsiveness is highlighted in the previous part as a strategic move that could enable the company to rise above the competition. The creation of such a culture increases the likelihood of higher customer satisfaction. The satisfaction of clients is related to their consumption and expenditure. Consequently, when the clients are satisfied, they are likely to become repeat clients. This element in the new market is highly beneficial to the company because it will lead to stability. It will also enhance the establishment of a stable market share. This market share is expected to grow because of referrals from the existing market.

Most importantly, the organization will report increased revenue (Dawson & Andriopoulos, 2017). Such customer responsiveness may include expansion of the product development process. The company’s entry into a new market requires the company to understand the market’s cultural aspects. This aspect may demand that the organization includes the targeted clients in the process of developing the product. The origami-inspired boat is expected to facilitate fishing among Indian fishers. Therefore, the inclusion of a representative sample in the development process or conducting a study prior to actual development is important in ensuring the final product meets the target market’s needs (Spawn, 2020).

References

Dawson, P., & Andriopoulos, C. (2017). Managing Change, Creativity & Innovation. Sage.

Edwards, J. (2014). Advantages and Disadvantages of Competing in International Markets.

Spawn, L. (2020). How to Use Customer Feedback to Your Advantage. CMS Wire.

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