Organizational Strategy for Proton's Global Expansion

Consultancy Report – Organizational Strategy for Proton’s Global Expansion

Katrina Collins
BBA 484 Global Strategies
Dr. Laura Pogue
April 3, 2006

Strategic Plan

Selection Proton is currently operating in 50 countries. The company is thinking of exporting to places like Iran, Syria, China and Indonesia. In order for the company to become global it will need to think about expanding its business to markets such as South America where they are not currently present. Proton should also consider expanding their manufacturing sites to each country in which they operate so that they will be able to reach their markets quicker and will have more local responsiveness. The parts can still be developed in the countries that they are being developed in but should be located close enough to the manufacturing plants so that turn around time on inventory and supply is faster which can save the company money.

Resourcing In order to achieve the mission, Proton will need to develop alliances in the different countries, with other car manufacturers. This will help them with the research and development of cars more quickly and can also give them help with keeping down the costs of the manufacturing of the cars. They can also receive assistance in the technical aspects of the production of these cars. Questions can be answered as to what type of engines are most likely to sell and what accessories or components are rated the highest in the current market for the country. This will help them to get a better chance at marketing a product that will sell fast and will give the company a better return on their investment. The country is already in a “Rights to Signing” agreement with Egypt and should look at making the same agreement with other countries and manufacturers. This will help them to move into other markets more quicker and will help their brand be recognized.

Controlling I would operate the country in the transnational form so that they can begin alliances with different companies around the world. This would also help them in the transition of becoming a global company. The company would become a part of a global alliance with loose characteristics of a strategic alliance. The government can still see over the operations of the company from the home base but there would need to be a considerable amount of changes made in the organizational structure. There will need to be country managers would will have control of operations from their country and work in a network with those from the other countries. In order to handle the cultural aspects of the company, the company will develop a strategy will be culturally fit. The country would operate as Geocentric, which is totally different than what they are doing now. This will allow optimizing and promoting of learning between the different constituent parts of the company.

Competitive Strategies

In order to establish a competitive advantage the company will need to develop alliances with companies in each country that will allow them to learn more about the development of the cars for that country. The company will need to know what the current trends are for the country and what is selling more. This will allow them to develop products that are similar to those being marketed in these countries. Each country subsidiary would be responsible for the operations in that country. They would still have to follow orders from the central headquarters where most decisions will still be made.

The Corporate Plan

Mission Statement

The company’s mission is to develop and manufacture the finest and highest quality products that can be sold around the globe with market presence in each country. Products will be developed that will meet the needs of the local customers in each market. Proton will develop a strategy that within the next 10 years, they will be a company that is known globally and has earned a significant market share in each country. The company and its employees will strive to become the number one car manufacturer on the globe and will be able to directly compete with companies such as Volvo and other companies that have a global presence.

Financial Resourcing Plan

Proton would need to carefully consider the alliances and partnerships that it has created with companies. The company would need to make sure that they have a large economy of scale and scope. This will allow them to produce a product that will be available to the most number of people and are manufactured with standards that are suitable for the vast majority.

Organizational Plan

The organizational plan would include revamping the organizational structure so that there will be more operational control placed in different countries. This will be done through the country subsidiaries, which will be responsible for reporting to the main office. The central headquarters will still be in overall control of operation. They will decide the best locations for the operations and what functions will be handled where. Marketing and sales will be done in all countries of operation. In order to service the countries more rapidly we must have a place where there is inventory of the vehicles and there is a sales staff ready to take care of the customers. Manufacturing of the vehicles will take place in more countries than what they are currently being done. The specific countries will be determined by the central headquarters. The countries that manufacturing will take place will be those countries will it will be more cost effective. In the countries where it will be too expensive to build the cars, we will export to those countries but have marketing and sales done in those countries. The labor policies for each country will be different so to make sure that our country is following the guidelines of the country, we will make sure that the policies are made to abide by them. There will be some policies that will be the same throughout the company that deal with the specifics on employee work ethics, discipline, hiring and firing.

Narrative

Proton is currently handling most of their functions from their home country. This is where most of the manufacturing, research and development and all other operations take place. This is not really a good strategy because the company is not doing as well as they should. Sales have dropped tremendously because of the lack of ability to compete with the foreign markets. Through the alliances, the company should be able to develop better model vehicles and earn a better market share. The new strategy will be great because the company will have more market presence, the vehicles will be more acceptable by local customers, the company will have more local responsiveness, and the company should see a tremendous return on investment. This strategy will also help to strengthen the company in areas such as research and development, technology, and turn around on products. In becoming a global player, Proton will be faced with managing the different cultures. There will be a strategy so that management of the company will be culturally fit. By forming a group of managers in a network that will work hand-in-hand, this will help the company integrate the many cultures and learn from each one.

References:
Segan-Horn, S. and Faulkner, D. (1999) The Dynamics of International Strategy. Thompson Learning.

Proton Online. Proton Malaysia/ Proton Worldwide. www.Proton.com

Jones International University. BBA 484 Global Strategies, Module Theme Readings. www.jonesinternational.edu

References: Segan-Horn, S. and Faulkner, D. (1999) The Dynamics of International Strategy. Thompson Learning. Proton Online. Proton Malaysia/ Proton Worldwide. www.Proton.com Jones International University. BBA 484 Global Strategies, Module Theme Readings. www.jonesinternational.edu