QBM2-task2

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Western Governors University *

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D081

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Management

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Jan 9, 2024

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Innovative and Strategic Thinking D081 Task 2: Risk Analysis Western Governors University Charlene Waters, ID # 010319170 9/5/2022

A. One risk which the company will face in entering the new market overseas could be a lack of communication between the employees in the first location in the U.S. and those in the second location in India. The companies will be separated by both geography and time differences, which will limit the amount of collaboration that can take place between the two locations. While the first location’s structure is flat, carrying that structure over to the new branch could lead to significant differences in the culture of the expansion. In the U.S. office, the coworkers can reach the founders at anytime for collaboration, however since in the new extension office they wouldn’t be able to do that, it could lead to work differences, decreased communication within the Indian team, or decreased collaboration between the offices and team members, because they will be so separate from the team already present in the U.S. Another risk the company faces with entry to the new market is poor product performance with the new materials that are required for the company per the National Fisheries Development Board (NFDB). To get the endorsement from the NFD, the company must use recycled Indian plastics to construct their boats. This change in materials could lead the company to design or manufacturing difficulties if the boats are more expensive than the original models or if they do not perform as well due to the required changes in materials. These changes can open the company up to a poor product, especially if the defects aren’t caught in time prior to production, which could damage the company’s reputation and hurt their market entry. B. 1. Strengths: 1. One of the biggest strengths of the boat manufacturing company is its products. The boat’s net-zero environmental impact, foldable design, and affordable price sets the company and its products apart from the competitors. Another strength of the product is the fact that it has a net-zero environmental impact and that it helps to perverse the natural ecosystem through its use when fishing. 2. Another strength of the company is the environment which the founders have created within the company. The decentralized company structure, with an internal environment of innovation is a strength because it promotes the employees to reach their full potential of innovation, as well as makes everyone feel like they have a voice and a listening ear when they have ideas. Employees will feel more valued in that environment and the company’s incentive structure for rewarding employees for being good at their jobs will further make it a great place to work and have a career. 2. Weaknesses: 1. One potential weakness of this company is the uncertainty of the NFDB’s endorsement of their product. The company has already

invested significant capital resources into this project, and if the NFDB were to continue to require more items from the company prior to their public endorsement, it could significantly threaten the profitability of the boats they are designing specifically for this market, and the branch’s profitability as a whole. If the NFDB were to expect the company to do too many changes or upgrades to the product prior to completion, eventually the product will either be no longer be profitable or no longer affordable. This company is putting a lot of capital on the line in hopes they will receive the recommendation and could lose a lot if that recommendation has too high of a price that it is no longer worth it. 2. Another potential weakness of the company would be the separation of the two plants. Since the company does not have any additional locations within the U.S., this Indian expansion will be their first try at a second location, and there are a lot of ways that could lead to failure. The Indian market could value different things than the American market, jeopardizing the company’s competitive position. The second location being in India could also lead human resources problems such as language barriers preventing the company’s values and ethics being carried out within the location. The company will also not be able to communicate directly with the Indian fishers hired to help design the products, requiring the use of translators. Using translators will require additional time and resources for meetings, innovation meetings, and collaboration. Unlike how normally the team would be able to contact the founders ad lib for collaboration, the Indian employees will need to schedule more formal meetings to allow all necessary set up to take place. 3. Opportunities: 1. One opportunity of the company would be to open a second branch closer to home. If the American branch can successfully manufacture and create all that is needed for the demand within the U.S., the company could consider the fishing market within Mexico. Mexico is full of rivers and coastline which the boats could be useful for, in a location that would not have quite so much physical and time separation from the first branch. 2. Another opportunity the company could look into is a small motor for their boats. Since the market of fishers they are targeting goes up to 70 years old, some of the people using these boats may not have the physical strength or stamina to paddle the boat as required to use a completely nonmechanized boat. The company could look into a small motor which could help these older customers with the physical demands required to operate the boat. The company could research ways to help the motor be environmentally friendly and not disrupt the natural ecosystem. 4. Threats:

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1. Due to the large availability of 3D printers, and the relatively simple construction materials of the boat, one threat to this company’s business would be people making their own instead of buying the company’s boats. Especially as the boat would gain popularity internationally, the markets in India and Asia could begin to make spin- off products that are sold for less money that could threaten the market the company is hoping to take advantage of overseas. 2. As with any coastal region, the risk of large, powerful storms disrupting normal life would be a threat to the company’s expansion into the Indian market. The boats the company produces are only suitable for calm water, which would mean that the fishers cannot work if there is a storm going on outside. This could lead to the fishers looking into more durable watercraft to allow them to continue to fish despite the seasonal weather variations. C. Strategic Recommendations: A. The company should patent their boat design to protect it from competitors stealing their design, manufacturing the boat cheaper with less sustainable products and more environmental impact, and selling it to the company’s targeted consumers. This patent will not stop individuals from creating their own boats independently, as identified in the answer to question B4#(1), however it will stop people from commercializing that design and profiting off it. B. The company should also get the NFDB’s promise in writing to endorse the company once it meets the agreed upon terms as far as materials and design. The recommendation of the NFDB will help the company’s launch into the Indian market because the consumers in India would know and trust the NFDB, and with the endorsement of the NFDB, the consumers will know they can trust this company and their products. 1. Because the NFDB’s recommendation is so important to the market launch in India, the company should get a more formal agreement of endorsement for their products if they do specific changes to the product. This will prevent the NFDB from not endorsing the product in the future because the company will not make infinite changes to the design or materials of the project. This will make the market investment sounder, knowing they would have the NFDB’s endorsement of their project as soon as they are able to meet the post-consumer plastic materials requirement. The NFDB’s recommendation will help the company earn trust of the local fishers because this company will be unknown to the fishers, however the NFDB has a good reputation with the locals. The NFDB’s reputation will help the fishers know the company is trustworthy and worthy of their business.

QBM2-task2

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