The following report is providing a overview of the furniture manufacturing company Adorn expanding its sales operations into a foreign country and the consequences of such a decision.
The assignment covers:
The decision to go global and how to Adorn should choose which country to expand its operations into. Discussed are such aspects as G.D.P. and demographic trends
The U.S.A. is the proposed country to expand into.
With this, data was gathered from many different sources to analyse the country and trends of the U.S. economy. Analytical tools such as P.E.S.T., S.W.O.T. and Porters Diamond Model are used to better understand the environment with in the U.S. and how Adorn needs to adapt to those markets. Also the ease of doing business with in the U.S. with regards to the relative ease of setting up and doing business within the U.S., compared to other countries. The furniture industry and its future is discussed in depth with regards to local manufacturing industry, imports and consumer changing perceptions within the United States.
Finally considerations such as regionalism, e commerce and international terrorism and the impact on global expansion
1.1Reasoning for considering Globalisation of Adorn4
2Analysis of Globalisation4
3The United States7
3.1.1Political – legal environment8
3.1.3Socio – cultural environment18
3.2S.W.O.T. of setting up operations within US26
3.3National competitive advantage27
3.3.3Related support industries29
3.3.4Corporate strategy, structure and Rivalry30
3.3.6Concerns regarding this model30
3.3.7Conclusion of the Diamond Model31
3.6Trends within the United States furniture industry34
3.6.1Change in perceptions:34
3.6.2Economic changes within the furniture industry34
6List of references42
7Appendices: List of Tables44
8Appendices: List of Figures47
Adorn is a furniture manufacturer that is producers to clients specifications. It utilises highly automated processes development and production of its products, Adorn’s core competencies and competitive advantage include high automation of manufacturing processes, producing specialised and well designed furniture for the user in practicality and style.
1 Reasoning for considering Globalisation of Adorn
With the current global economic recession it would be advisable to enter foreign markets with the intention of sustaining or increasing the organisations profits through increasing the company’s market base and sales. Taking a more proactive stance to the slowdown in demand would be following in Nissan South Africa’s successful approach of increasing sales through globalisation. As reported by Ndundu Sithole (2009);
“”Nissan South Africa will boost production and expects to increase its local market share despite a domestic and global economic slowdown, managing director Mike Whitfield said. Local car sales have been in negative territory in the past 18 months, falling by 30.1 percent in March, and the global slump has slashed vehicle exports. Nissan S.A. expects new product lines to boost output to about 40,000 units from 28,000 in 2008. He...