MGMT690-2305A-02 Unit 1 IP 1
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Unit 1 IP Title: Navigating Resource Challenges in Global Expansion: A Comprehensive Strategy for
Furniture Manufacturing
Payton D. Stanford
MGMT690- Unit 1 IP 1
Dr. Gialanella
11/19/2023
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Unit 1 IP Abstract:
This research paper aims to analyze the critical role of manufacturing resources leading to the development and implementation of a global strategy for a custom furniture manufacturing
company. Our company faces some tougher challenges in the domestic market. This furniture manufacturer led by John and Deborah Ferrer, is contemplating a developmental strategy for global expansion mainly led by a downturn in the housing market and a decreased gap from other competitors in the market. This study will integrate insight from a special focus on Germany as the chosen country for expansion. The paper explores the specific resource challenges associated with this decision and outlines a comprehensive strategy to address them.
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Unit 1 IP Introduction:
Global expansion presents a myriad of opportunities and challenges for our furniture manufacturing businesses. Our company is seeking global expansion and taking a firm approach to a new international market. “Global expansion in manufacturing isn't just about reaching new horizons; it's a symphony of innovation, precision, and strategic marketing. A strong marketing approach is the compass guiding products to resonate with the world, turning every challenge into an opportunity for growth." (Carlson Ryan et. al. 2019). As our organization seeks to venture into new markets, the efficient management of our resources and streamlining products into new markets becomes a strongly encouraged consideration. This paper aims towards the implications of resource constraints in the context of our furniture manufacturing company seeking global expansion, with a spotlight on Germany - a country renowned for its strong economy and commitment to quality craftsmanship.
Why should resources be a concern in a global strategy?
Resources are a pivotal consideration in global strategy due to their multifaceted impact on operational efficiency. Resources are the lifeblood of any business. Our company’s resources influence operational efficiency, regulatory compliance, and product quality. For this furniture company led by John and Deborah Ferrer, whose brand is synonymous with the consistency of product quality, understanding and managing resources on a global scale are crucial. The importance of creating and meeting supply chain demands with high-quality products is a main point of aim for the strategy. As the supply chain process will seek an increase in demand, the
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Unit 1 IP quality of the products being introduced to the new German market will need to set a tone above local competition. Product quality can be described as "Quality isn't just a measure; it's a commitment. In manufacturing, the pursuit of excellence is not an option – it's the cornerstone.
that builds trust, fuels innovation, and crafts a legacy that withstands the test of time" (Munoz-
Torres et al. 2021). The transition to a global strategy introduces numerous complexities such as varying legal frameworks, and market demands, both of which impact the allocation and utilization of resources, compliance with local regulations, and the ability to maintain product quality.
Resources Concerns in Global Expansion:
Mike's concern about the legal and regulatory challenges associated with shipping domestically made fabrics globally outlines the significance of textiles as a critical resource. For some examples, Legal barriers may include trade restrictions, intellectual property regulations, and compliance with local standards for imported textiles. These challenges may vary significantly across different countries, posing a considerable risk to the company's operations in a global market. In the selected country for globalization, Germany, potential resource concerns may include adherence to strict regulations related to product quality and safety. When entering this manufacturing company into a foreign and new market such as Germany needs a plan to navigate product creation to fit the complex safety standards for Germany’s foreign trade guidelines. In research gathered from the work titled Process and Procedures for Importing Goods into Germany the Center for WTO and International Trade describes; “Determining the classification of goods (HS code) is a very important step in determining the import tariff on that good. It should be noted that the World Customs Organization (WCO) developed the 6-digit HS
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Unit 1 IP code, and it is harmonized across most countries in the world Therefore, national HS codes may vary from country to country” (the Center for WTO and International Traders 2022). Determining the trade restrictions will be most crucial for determining what resources will be valid for use through manufacturing in a new global market. precisely which standards apply to our products as well as obtain any timely testing and certifications needed. language barriers may
pose challenges in communication and coordination with local suppliers and partners, further complicating the effective utilization of resources.
Impact on the Decision to Move to Germany:
The resource constraints mostly follow from the decision to go global. Integrating into the German market will primarily this company greatly. Big contributors will be the cost of production and the cost of expanding into this new market. This requires acquiring land through acquisition and developing manufacturing and storing capabilities in this new market. Our company will first have to identify a market approach to this new German market. There are three main routes the company may aim for as expansion moves forward. These markets include Multinational, International, and Global approaches. These markets can be best pictured from insights gained from the completed work titled “What is Global Strategy”, which describes these markets as; “As international activities have expanded at a company, it may have entered several different markets, each of which needs a strategy adapted to each market. Together, these strategies form a multinational, international, or Global strategy. For example, a car company might have one strategy for the USA – specialist cars, higher prices – with another for European markets – smaller cars, fuel-efficient” (Lynch 2015). Global international strategies span the entire range of a company's functions, possessing efforts to minimize engineering and
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Unit 1 IP manufacturing expenditures as well as establish service center networks worldwide to deliver localized assistance. Implementation of the international strategy would be the ideal strategic aim
for this manufacturing company. Further explained by Lynch, “An international Approach the organization’s objectives relate primarily to the home market. However, we have some objectives regarding overseas activity and therefore need an international strategy. Importantly, the competitive advantage – important in strategy development – is developed mainly for the home market” (Lynch 2015). This international Strategy can offer strengths for the company's products and services across all markets for efficiency, this approach would primarily focus on this company achieving the highest economy of scale possible.
How will this impact your competitive strategy in the German market?
Resource challenges necessitate innovative approaches to maintain this company's commitment to product quality, a factor that distinguishes our brand in the market. This may involve investing in research and development to identify alternative materials that meet both global standards and local regulations. Some materials can be negotiated with local providers to acquire goods that are necessary and maybe meet cost demands by acquiring the materials overseas. Locating suppliers within the new market can be a challenge, especially with the problem of language barriers. John Wagner argued that “in an effort to optimize buying externally, companies are instituting sophisticated new buying processes and changing the relationships they have with their suppliers" (Wagner 2013). Language is not the only barrier in which this company will need to break ground. The company also needs a competitive strategy in the global market that emphasizes our ability to adapt to diverse resource landscapes while upholding core values in the design of the furniture. Communicating the company's
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Unit 1 IP commitment to compliance and sustainability can enhance its reputation and competitiveness. By
actively addressing resource challenges, the company can differentiate from even the most established competitors in the market. This will ensure a safe and probable positioning of this company’s identity or brand that not only delivers superior products but also navigates global complexities with agility and foresight.
Conclusion:
In conclusion, global expansion for John and Deborah Ferrer's furniture manufacturing company presents a complex interplay of challenges and opportunities. The integration of Mike's
concern regarding the use of domestically made fabrics as well as the importance of resources in the global strategy. The decision to move to Germany requires a refined approach to address resource constraints, particularly in textiles, while adhering to local regulations. A comprehensive and adaptive strategy, focusing on risk mitigation and product differentiation, is essential for maintaining competitiveness and achieving sustained success in this new global market. As this business navigates trade tariffs, supplier barriers, and other factors of global expansion, resource considerations emerge as a critical factor that will demand the implementation of the international market approach along with strategic attention and innovative solutions, emphasizing the need for a full and comprehensive approach to global market entry.
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Unit 1 IP References:
Muñoz-Torres, M. J., Fernández-Izquierdo, M. Á., Rivera-Lirio, J. M., Ferrero-Ferrero, I., &
Escrig-Olmedo, E. (2021). Sustainable supply chain management in a global context: A
consistency analysis in the textile industry between environmental management practices at
company level and sectoral and global environmental challenges. Environment, Development
and Sustainability, 23(3), 3883-3916. https://doi.org/10.1007/s10668-020-00748-4
the Center for WTO and International Traders 2022. (2022, April). Process and Procedures for
Importing Goods Into Germany The Center for WTO and International Trade . TTWTO VCCI -
process and procedures for importing goods into Germany? https://wtocenter.vn/german-
market/19039-process-and-procedures-for-importing-goods-into-germany
Lynch, R. (2015). What is global strategy?. Global Strategy. https://global-strategy.net/what-is-
global-strategy/
Wagner, J. (2013). The great export recovery in german manufacturing industries, 2009/2010.
Jahrbuch Für Wirtschaftswissenschaften, 64(3), 325-339. https://doi.org/10.1515/roe-2013-0304
Ryan, S. J., Carlson, C. J., Mordecai, E. A., & Johnson, L. R. (2019). Global expansion and
redistribution of Aedes -borne virus transmission risk with climate change. PLoS Neglected
Tropical Diseases, 13(3)
https://doi.org/10.1371/journal.pntd.0007213