82416026 Marketing

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82416026 Marketing & Risk Analysis An organization’s decision-making process is affected by a variety of factors. Three of these are the company culture, organizational structure as well as the mission and vision statements. The three factors all affect organizational decision making in different ways. Company culture can be defined as the behaviours and attitudes adopted by a firm and its employees. The company culture is a predictor of how things are done in an organization (Groysberg, Lee, Price, & Cheng, 2018). Whatever the company culture promotes is the trait that will be best adopted by the employees. The U.S. fishing boat manufacturer has a company culture that focuses on three key things. One is a customer-driven design. The employees are encouraged to voice their opinions on how best customer needs can be met. Even customer service is responsive because the organizational culture is customer-centric. Another aspect of customer culture is the promotion of innovation. Everyone in the organization is constantly innovating to find the most effective way to meet customer needs cost-effectively. The third aspect of the company culture is the partnership between the employees and the founder. The founder has an open-door policy that allows employees to voice their opinions or make suggestions they feel would benefit the organization. The company culture seems to ground the firm to be customer-centric in operations. The organization structure refers to the corporate structure that assigns different responsibilities and roles to different stakeholders in the organization. Organizations can either be hierarchical and centralized or they can be decentralized (Vantrappen & Wirtz, 2017). The firm in the case study seems to practice a non-hierarchical organizational structure where the founders and the employees are equal partners. The founder promotes employee freedom in proposing or criticizing any decisions that are made. The shared or collaborative decision-making process is aimed at relationship building. The main challenge with the approach is that it can sometimes be slow because of the need to collect feedback from everyone. It also increases the risk of the firm not having a specific direction because different employees may want the firm to move in a specific direction. In such instances, the mission and vision of the firm provide an anchor for the direction the organization should move towards. The firm’s mission statement is, “We will provide the most innovative customer-driven design and growth in the industry.” The firm’s mission is focused on both innovation and being customer-centric. The principles in the mission mean that even though the organizational structure is decentralized, it guides all the employees towards making recommendations based on promoting customer-centric designs and innovation as a way of achieving growth. The firm’s vision statement is, “We will be the most sustainable company in the industry.” The vision of the company steers the company towards sustainable growth and sustainable product development. It provides a guideline on how the firm innovates. The employees are encouraged to further boats using recycled materials. The firm’s missions and vision guide the decision making the most because they set the overall strategic objectives. All decisions-made are bound to the vision and mission. Competing Values Framework The first step in understanding the culture influences the market entry strategy is understanding what company culture is practised. The best tool for this is the competing values framework. Cameron (2009) explains that the framework is made up of four quadrants created by four competing values. The values are flexibility versus stability and internal versus external. The different quadrants provide the type of culture that the organization is practising. A company can have two cultures based on the

framework, but they have to be complementary. The dominant culture in the case study is the clan culture. The clan culture is in the top left quadrant that focuses on internal flexibility. The central aspect of the culture is the relationships between the employees. In the case study, the founder and the employees use a decentralized organizational culture to promote cooperation between the two. The mutual relationship creates the right environment for the organization to achieve its success. The organization also practices an adhocracy culture found in the top right quadrant. The organizational culture is externally flexible, focusing greatly on continuous innovation. From the mission statement, it is clear that innovation plays a central role in the corporate culture of the organization (Cameron, 2009). The founder has created a flexible environment that encourages the employees to be creative in problem-solving and product creation. The vision is also aimed at sustainability guiding the entire organization on the type of innovation the firm is striving for in its image. The company culture that influences the market entry strategy in the firm is the adhocracy culture. The culture is centred on innovation. As a result, the firm had no problem entering the Indian market. The NFDB requested the firm to develop the product in India while using recycled plastics waste from the country. The culture of innovation bodes well for the company because it allows the problem to be solved by relying on innovative product design. Another requirement for the company was the creation of an environmentally friendly coating. The firm also used its innovation to enter the market. The collaborative nature of the firm also makes it easy for the firm to liaise with traditional fishermen in the design of the boat to make it both functional and portable for them. The adhocracy culture based on the competing values framework guides the firm to enter the market by tailoring the product to the requirements of the Indian market. Organizational culture Every organizational structure has its detriments and benefits. Selection should be based on the firm’s strengths. The firm in the case study practices a decentralized organizational structure. One advantage of the decentralized organizational structure practices by the firm is it empowers the employees to make quick decisions that benefit the company. In the case study, the employees are encouraged to come up with ways to improve the product while remaining customer-oriented. Since they understand the day-to-day operations, they can make better decisions on the fly (Kaschny & Nolden, 2018). The second advantage is that it lessens the workload on the executive management or, in this case, the founder. Creativity is shared by the entire organization increasing the pool of ideas that can be used in making strategic improvements to the firm’s operations and products. The third benefit is eliminating conflict between management and the rest of the organization. A common challenge that centralized organizations face is a division between those with administrative duties and the rest of the firm. A decentralized structure minimizes the conflict by removing the hierarchy that causes the conflict. The final benefit of decentralization is a highlight motivated group of employees (Kaschny & Nolden, 2018). The good communication and the feeling staff members get when they believe their contribution directly impacts the organization results in greater motivation and job satisfaction which in turn results in better employee retention. As with every organizational structure, there are some drawbacks to using a decentralized approach. One of these disadvantages difficulty in the leaders moving the organization towards a strategic direction. When the employees are used to freedom, it is difficult to push the firm towards a new direction. Most of the employees will resist change. Conflict may also arise from competing schools

of thought on the direction the firm should take. Another challenge is duplication. In a decentralized organization, employees or employee teams can be working on the same innovation. It results in wastage of man-hours (O’Grady, 2019). The final challenge is in decision-making. Decision-making is difficult because the employees have the freedom to criticize any decisions and propose alternatives. As a result, decentralized organizations are normally disadvantaged when situations require quick strategic decisions. The fishing boat manufacturer seems to have gotten the right balance in organizational structure that minimizes the challenges of a decentralized structure. The strategic direction is guided by the vision and mission while the organizational culture ensures that all the innovations are customer- centric and tailored towards improved sustainability. Emerging market characteristics The characteristic of the market that a firm wants to enter plays an important part entry strategy used. In the case study, India has unique market characteristics that influence the approach the U.S boat manufacturer uses. The first characteristic is that India requires firms to set up partnerships before selling to the Indian market. The tactic is used by the country to ensure that foreign companies directly invest in the Indian market before accessing the market (Bhattacharyya, 2017). In the case, study one of the requirements given by the NFDB will force the U.S boat manufacturer to create a facility in India. The strategy also requires the firm to utilize plastics wastes from India as a way of reducing environmental wastes and finding a way to reduce the landfills. The approach used by India forces the company to change the market entry strategy. The firm would have preferred to simply export products to India but the restrictions in the market force the change. Another characteristic that has forced a change in product design is the demographics. The Indian fishing industry has a wide age-range of fishermen. Some are as young as 13 years while others who are approaching 70 years still fish. The originally designed product was more suited to the 18-45 age range. However, adjustments need to be made to make the foldable fishing boat portable even for those who are either younger or older than expected. The strategy forced the organization to find a lighter and more portable design to accommodate the difference in demographics. The boat design was also more comfortable. The firm changed the product to make it lighter by making out of lighter plastics and paper that is then coated with a water-resistant coating. India also has a strong environmental protection policy. While the product originally proposed by the firm had net-zero emissions, The NFDB pushed for the product to be made using Indian waste so that the benefits of the net-zero can be enjoyed by the country. As a result, the boat manufacturer was forced to create a new product using the wastes available in India rather than importing the already proven design. Fortunately, the company’s focus on innovation and the willingness to make changes to enter the Indian market is pushing for the required changes. If the data is positive, the firm enters the market with the conditions set by the government. Meeting Emerging Needs The characteristics of the emerging market force the organization to make some strategic changes. The first emerging characteristic of the Indian market is the need to establish a partnership within the country before accessing the market. The route that most firms take is setting up some form of manufacturing or assembly facility in India (Jain, 2018). It meets the requirements of the country while providing direct access to the market. The boat manufacturer is considering setting up a

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manufacturing facility and hiring Indian workers. Already, the firm is taking measures to meet this characteristic by surveying Indian fishermen to take their input in the design process before finalizing the decision to enter the market. The second characteristic was the unique demographic of the fishermen in India. The demographic is wider than the American demographic. The ages range from 13-70 years. The products entering the market must consider different demographic. In the boat manufacturer’s case, the firm needs to change the design slightly to make it more portable for younger and older consumers. These consumers do not have as much strength and the boat needs to be lighter. The approach used by the firm is shifting to lighter materials and adding a waterproof coat to maintain portability while still being buoyant in water. The final characteristic is India’s push for environmental conservation or sustainability. As a country, Indian hopes to ensure that it reaps the benefits while protecting the natural environment. The boat manufacturer has had to make several product design changes. First, the firm has avoided introducing any motorized boats that may damage the environment. The shallow rivers are more suited to paddle boats. The other environmental adjustment made was due to the country’s request to ensure that the waste used is from India. The request was to ensure that the country’s landfills reducing as the company continues to recycle. The product design changes mirror this commitment. Design thinking process Design thinking can be defined as a problem-solving approach that relies on following iterative steps or a methodology that results in a solution. There are many designs available. One of the most successful ones is presented in a video by Daylight (2015). The process is divided into five iterative steps that can be applied in the case study. The first step involves learning from people. For the company, this step involves an exploratory examination of the Indian fishing market to truly understand it. Already the company is planning to collect data from the Indian fishermen through open-ended conversations to help determine what type of boat is appealing to the fishermen (Curedale, 2016). Another measure that the company has taken is to initiate a conversation with the NFDB in India to get an understanding of the business environment and requirements the firm needs to fulfil. The second step based on Daylight (2015) is finding patterns in the information that has been obtained. A skilled data scientist may be sought to conduct a thematic analysis of the qualitative data obtained from the open-ended interviews with fishermen. The aim will be trying to find a way of linking the patterns and the requirements given by the government to get a holistic picture of what is required for the market in terms of product and how to make the products more appealing than existing alternatives in the market. The third step in Daylight’s (2015) video is creating design principles. One of the design principles obtained in the previous steps will probably be the need to make the product more ecological. The NFDB made it clear that environmental conservation should be the main consideration to protect India’s natural resources. Another NFDB inspired principle involves using local materials and talent. Restrictions on foreign importation in India means that the firm needs to consider building a local facility for the manufacture or assembly of the boats (Fujimori & Sato, 2015). The next design principles required is functionality. One of the patterns that emerged is that fishermen in India tend to prefer

carrying their boats home to avoid theft. As a result, the boat manufacturer needs to make its boat portable and functional for the market. The fourth step involves making the design tangible. Daylight (2015) state that the firm needs to use the design principles to determine how best to make the design feasible and operations possible. Part of the solution involves looking at the existing boat designs that exist and finding one that is the closest fit. For the boat manufacturer, the best design was the foldable boat design. The product was portable enough to allow it to be carried by the fishermen with ease. The product was also environmentally friendly. Since it was made using recycled materials, it had a net-zero carbon impact on the environment. Some measures have to be taken to meet the requirements by the NFDB. The first is manufacturing the boat from India. It will use the waste from India and contribute to environmental restoration. Second, it will be able to meet the requirements to assemble or manufacture in India. With these applications, the boat manufacturer has found a tangible way of entering the market using an already existing design that only needs to be tweaked for assembly in India. The final step Daylight (2015) recommend is constant iteration. The firm needs to take into account what fishermen or the market think of the product. One of the main iterations made involves changing to a lighter material that is then coated with durable material. Paper-based designs are created and then feedback is obtained from fishermen. Once the iterations are made, the boat manufacturer will have a practical product tailored for the Indian market. Prototypes of the product can be created and tested in the market. After this, plans can now be made to start production. The firm will need to lease or buy a manufacturing facility, equip it and hire staff. Licenses and permits must be obtained before products are produced. Marketing can be outsourced and the company will officially have entered the Indian market. Future iterations can be made to further improve the product based on consumer feedback. How they affect the design thinking process 1. Company culture The company culture of the boat manufacturer is based on innovation and collaboration. The innovative company culture will have the most impact on the organization. In specific, the boat manufacturer relies on an adhocracy culture that focused on flexibility and innovation as the external strategy. In the case study, this allows the firm to innovate in the development of the design principles and making them tangible. The employees will be able to make recommendations and provide new ideas on how best the firm can meet the unique needs of the Indian market. Most likely the idea of using the existing foldable boat design and iterating it or the market will be successful. Likewise, the firm will be able to improve the product in the future based on the fishermen responses. 2. Organizational structure The organizational structure of the firm is decentralized. The decentralized organizational structure aids the boat manufacturer. Most of the employees have been actively involved in the operational aspects of the business. The increased knowledge and relative independence mean there will be no shortage of candidates who can head an Indian branch of the organization. Another benefit is that the firm is already suited to the collaborative design process. It will be able to take the ideas

proposed in the Indian market and integrate them with the firm’s existing product. This is suited mainly for the iterative part of the design thinking process. 3. Emerging market culture Emerging-market culture will also influence the design thinking process. In particular, differences in the culture of the market the firm is already operating in and the emerging market’s culture will influence everything from the first to the last step of the design thinking process. The emerging-market culture is the reason why the firm will have to learn from the people. The differences in the markets will be used in the formulation of design principles. The design principles will then be used in making tangible real-world designs and products that will be tested and then introduced. An example of this is the greater age gap of 13-70 years among fishermen. The difference will mean the creation of lighter boats that are more portable. Ethical Statement The boat manufacturers ethical statement is, “We will make decisions that are sustainable for customers and the environment.” The statement suggests that sustainable production and development are the key ethical considerations during market entry. In the case study, it means that the product being developed for the market must be environmentally sustainable. This is the reason why the firm is considering the non-motorized foldable boat that does not contravene any of the environmental laws in place. Another aspect of sustainability is ensuring that the product is affordable to the local fishermen. The retail price of $200 is not too steep and can compete in the market. Its portability will be the main appeal for consumers to buy slightly more expensive products. Sustainable production is also a consideration. The product will be made from recycled plastics from India’s landfills. As a result, the firm will be environmentally sustainable with a net-zero rate. By using waste, the product helps to clean up the Indian environment. In both production, cost-effectiveness and ecological conservation, the boat manufacturer will have adhered to its ethical statement.

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Task 2 Potential risks Whenever a firm is entering into a new market, it faces several serious risks that could adversely influence it. One potential risk that the firm can experience is the failure of the product after its redesign for the Indian market. One reason for this may be a difference in the types of plastic waste in the market. There are different kinds of plastics. These plastics are broken down based on the characteristics and the composition. Some common examples include PETE, HDPE, PVC, LDPE, PP, and PS plastics. The plastics common in the United States may not be the same as those in India. As a result, the recycled materials developed may also be different. There is a possibility of catastrophic failure in the product due to this difference. The waterproof coating may adhere differently to the recycled waste in India resulting in an inferior product. The company may end up making huge losses investing in an endeavour that results in an inferior product to those sold internationally. Despite having a culture centred on innovation, it may not be possible to produce the same product. Worse still, the cost of materials processing may be substantially higher than expected. The result is a higher cost of production. Another potential risk that may emerge is a local company may decide to replicate the same idea. The foreign direct investment model that India practices is aimed at giving its citizens expertise and employment opportunities rather than simply opening up the market (Jain, 2018). The boat manufacturer has to set up a facility and hire Indian employees or form a partnership with an existing Indian manufacturing firm. The danger is that the design can be stolen by some of the locals and then tweaked to make it appear like a new product. The new product would be a direct competitor that will take up a significant market share. As a local company, the product would be exempt to some of the taxes that foreign investors are required to charge making their products cheaper in the market. This is a serious possibility that can render the foray into the Indian market bad. There may even be scandals involving the foldable boats created that can negatively impact the firm’s image not only in India but also in America. Entry into the Indian market presents a significant risk that needs to be addressed. The third potential risk that may emerge is high operating costs that end up making the venture a loss for the company. Setting up a facility in India will require leasing land or a warehouse, getting the equipment and hiring new staff. Unfortunately, there is a chance that the operational costs will be high. There is even a risk that hiring local workers will not help in operations. In such a situation, the firm will be forced to use expatriates before the skill levels of the Indian workers rise enough. The final risk is that the adoption rate in the Indian market may not be as predicted. The investment is based on the hope that the company will be able to capture a sizeable portion of the market. However, this is not a guarantee especially when it comes to a long-lasting commodity like boats. It will be difficult convincing Indian fishermen to switch from their traditional boats they are used to new foldable boats. Failure to capture the market can result in huge losses, considering how costly the investment truly is. SWOT Analysis Strengths The U.S boat manufacturer has several different strengths that aid it in the proposed entry into the Indian market. The first is a strong adhocracy culture based on innovation. The entire corporate

culture is geared towards innovative problem-solving. As a result, the employees are equipped to notice and solve problems that most other companies cannot take. The innovative approach is suited for a foray into the Indian market that is quite different from the U.S market that the firm had success. The innovation will allow the firm to create a product that is suited to the Indian market while following the requirements set by the NFDB. Another strength that the firm has is the decentralized organizational structure. Decentralization means that the employees have a strong motivation to ensure the success of the company. As a result, they are committed to fulfilling organizational objectives, including entering into a new market. The decentralized organizational structure also benefits talent development. There are enough employees who have a firm grasp on operations and the vision of the company. As a result, the firm will not have to struggle to get someone to lead the Indian branch from the existing staff. The shared decision-making approach is what the firm truly needs to train the newly recruited staff in the Indian market. The third strength of the firm is its dedication to sustainable product design and operations. Its vision is becoming the most sustainable company in the country. The sustainable approach endears the company to the Indian government that is also trying to meet its sustainability goals. In the product design, the boat manufacturer already has existing products that meet the environmental requirements the NFDB has set for the fishing industry. Just slight tweaks need to be made to tailor the foldable boat design to the Indian market. SWOT Analysis Weaknesses Like all companies, the U.S Boat manufacturer also has inherent weaknesses. One of these weaknesses is the decentralized organizational structure. While it is a strength in some ways, the decentralized leadership structure is also a weakness in others. It is a weakness because it adversely impacts the strength of the leadership. The managers and executives do not have as much power as they would have had if the firm was centralized. Consequentially, the decision-making is also adversely impacted by the decentralized organizational design. Decisions made by the firm had to be deliberated by everyone. As a result, decisions are made slowly. There is also no clear vision from the leadership on the direction to take. Even though the mission and the vision are good, visionary leadership is lacking due to the decentralized nature of the organization. These weaknesses may become a problem in a new market where a clear vision may be required to direct the firm’s operations. Another weakness for the company is lack of experience outside the American market. Globalization can be both a strength and a weakness for the organization. The firm does not have any experience operating any overseas branch, more so one that has an entire manufacturing facility and its own unique product being manufactured. The manufacturer also has no experience in entering new markets. There is also no experience navigating the legal requirements for a business in another country, more so India with its strict FDI legislations. The inexperience in globalization is an inherent weakness for the firm in many ways. SWOT Analysis of Opportunities If the U.S boat manufacturer can leverage its strengths and mitigates its weaknesses, it will be able to exploit some opportunities. One of these opportunities is increasing its profitability by successfully entering the Indian and Asian markets. If the firm can create a sustainable product that is

appealing to the Indian fishermen, the firm will be able to increase its revenue stream. The revenue stream can further increase by exporting these foldable boats to other Asian countries that also have a large domestic fishing industry. The opportunity is why the firm has decided to invest in the market. The second opportunity is for the firm to carve out its niche in the Asian market. Already the Asian market is proliferated with boats. There are many designs from traditional wooden boats to more modern designs. However, there are no foldable boats in India or other parts of the Asian-pacific region. Considering the design is also sustainable, the boat manufacturer may be able to create a niche where the firms are the dominant player. All that is needed is a trend where fishermen enjoy the portability of the foldable boat. If the trend catches on, the business will become a success. The third opportunity is the development of a new line of products that can also be introduced to the American and South American markets. In particular, the cheap and portable design may be quite appealing to the South American market. The region has many people who live on fishing as their main economic activity. A foldable and portable boat may be appealing to such markets. The sustainable design can also be a selling point as many countries would be willing to allow the entrant of a manufacturer who designs boats while recycling some of the plastic wastes in the country. These opportunities may make the boat manufacturer a truly global brand. SWOT Analysis Threats Opportunities always coincide with possible threats. One of the main threats is the failure of the entire Indian endeavour. The failure may be attributed to several reasons. One of them is poor product quality due to differences between the plastics used in North America and India. Since different countries have different standards for plastics used, plastic waste may also be different. The foldable design may not be applicable using Indian plastic waste. Another reason for the failure of the venture would be the failure of the product to compete with existing boats in the Indian market. Already, there are other boat options in the Indian market. Some are traditional wooden boats that are cheap while others are slightly more modern boats. Fishermen do not buy new boats regularly. It is a long-term product and the units sold may not be as many. If the price of traditional boats is cheaper than the foldable boat being introduced into the market, then few fishermen will be able to afford it. Considering how high the investment has been made, the manufacturer may make a huge loss. Another potential threat is high operational costs that may steal into the firm’s revenue. The regulations of FDI in India force the manufacturer to invest in a manufacturing facility. Not only that, but the firm will also be forced to invest in a recycling plant to get the required raw materials to be used in the manufacturing of the boat. These are all costly investments just to design a product that has not been proven to be a success in the Indian market. Hiring local staff also increases the operational costs of the firm which may also eat into the revenue of the main firm. Two strategic recommendations Some strategic recommendations can be made based on the SWOT analysis that has been conducted. The first recommendation is for the firm to invest heavily in outsourcing. One of the threats highlighted is the high operational costs that the firm would have by operating both a manufacturing facility and recycling plant. Instead, the firm can outsource the recycling to an Indian based company

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that would be paid or processed recycled waste. The approach would meet the Indian government’s requirement of partnering with local firms and providing employment opportunities. The firm can then only focus on the manufacturing facility. As a strategic option, this minimizes the operational strain it will have on the entire firm before operations truly pick up. The second strategic recommendation is a shift in the organizational structure for the Indian branch of the organization. While a decentralized design is effective for the organization, it relies on highly skills and highly capable employees. Since India is a new facility, the local employees will not have the expertise or the experience. Instead, a centralized structure can be adopted by the firm before the employees are truly onboarded into the corporate culture. Only then can a decentralized organisational structure be introduced into the Indian branch of the firm. Justifying the strategic benefit The strategic recommendation that needs to be justified is the first one involving outsourcing and minimizing operational costs in India. As highlighted, the high operational costs not only increase the enormity of the losses that the firm can possibly make, they may also reduce liquidity by requiring revenue from the North American branch to sustain the operations in India before breaking even. Mitigating this risk is crucial to long-term success of the entire business. As a result, the firm should outsource as much as possible. Outsourcing is an effective method of reducing operational expense. First, the firm can seek partnerships with an Indian firm that is experienced in recycling. The firm can then be instructed on the type of plastic waste required and how to recycle the product so that it can be directly used as raw materials in the foldable boat manufacturing. Another measure involves investing greatly in infrastructure to reduce the need for human labour in manufacturing. Automation of the foldable boat will increase quality and reduce human-error. It will also reduce the cost of the product by reducing operational costs. The adopted approach will allow the firm to meet the requirements set by the NFDB. The benefit is increased liquidity and lower operational costs for the entire organization. It also reduced the cost of the foldable boat making them more affordable. As the demand grows in Asia, economies of scale will increase and revenue streams will slowly increase.

82416026 Marketing

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