Profiling of companies in different sector Essay Example
Profiling of companies in different sector Essay Example

Profiling of companies in different sector Essay Example

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  • Pages: 9 (2388 words)
  • Published: August 22, 2017
  • Type: Essay
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The three companies in this survey operate in different sectors within the fabrication industry. Both Shine and IAC are British companies. All three companies design and fabricate products for the business-to-business market, but Zarlink focuses on specialized markets such as medical, communication, and optical industries. Shine operates in the food equipment market segment, while IAC serves as system integrators with multiple divisions.

To demonstrate the domestic and international activities of these companies, Table 2 provides information on their size in terms of turnover, number of sites in the UK, experience overseas, and number of international markets entered. According to Table 2, Zarlinks is classified towards the higher end of small and medium enterprises (between ?... million), IAC is considered mid-sized (between ?... million), and Shine Ltd falls towards the lower end of the small and medium enterprise category (between ?... million).

In terms of age and experience, Zarlink has been established for..., Shine has ..., and IAC has ...

Subject

Sub-Catego

...

ry

Industry Profile: Design and Manufacturing
Firm Size: Size in terms of turnover, age, and international and domestic experience
Barriers/Challenges: Competition, domestic focus, fiscal commitment, language, and local representation/presence, management resources
Stimulation for Enlargement: Transition from telecom to medical industry, specialized/niche market, growth, unique concept
International Brand Potential: Management qualities, specialized market - niche, opportunity
Entry Mode Choice: Local representatives, acquisition of a manufacturing unit, similar culture
Management/Support: Local individuals, regular visits by management forces, modern electronic communication, full technology support from the UK
Management Vision: Creating value in a focused market, expansion
Importance of Entrepreneur/Decision-Maker: Decisions made locally by an "intrepreneur", centralized decision making
External Aid: WAG, UK Government, European Commission (FP7), Wales Trade International (WTI), In-house Financed
Lessons Learned: Importance of time, in-depth local knowledge and frequen

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visits, communication, building relationships
Firm Network: Relationships drive growth and opportunities
Innovation: Services and products

Table 2: Summary of findings
Barriers/Challenges: The main challenges identified by both companies include competition, the decision to focus on the domestic market, financial commitment, language barriers, the need for local presence and management resources.Zarlink and IAC both faced challenges in funding their planned international expansion. Zarlink had no budget or money for their expansion, while IAC's ventures were fully financed in-house. Both companies acknowledged the complexity of foreign market development due to cultural, legal, and consumer differences. Zarlink emphasized the differences in local limitations and legalities even within the European Union. IAC stressed the importance of understanding cultural differences when expanding into new markets. Zarlink also mentioned the need for prior research, analysis of the target market, and building relationships, allowing enough time for the market to develop.Both companies emphasize the importance of making fully informed decisions before entering the international market. This includes considering the risks and evaluating the market thoroughly. The process of supporting international expansion requires a significant amount of time and complexity due to dealing with different cultures and markets. Both companies acknowledge the high cost of management resources, such as acquiring personnel and setting up infrastructure that will serve the company for years to come.

Zarlink, in its initial international expansion, considered acquiring another company but ultimately realized it was not necessary. Instead, it opted for a joint venture but found that the benefits were outweighed by the imposed restrictions, particularly in terms of culture and cost control. IAC also noted the importance of having a local salesperson who is primarily an engineer with a good understanding of

the issues. Therefore, it is not feasible to recruit from afar as the company does not have a specific product. Setting up a manufacturing unit was deemed the most suitable option for IAC. Another challenge faced by Zarlink was the temptation to stay in its domestic market rather than expand internationally.The text discusses the dedication, quality, and educational degree of UK staff and employees in both IAC and Zarlink. However, the administration of both companies realized that their clients were located outside of the UK, specifically in the United States and the European Union. While IAC did not have a problem with competition as they believed they were the main players in the market, Zarlink was concerned about the limited number of participants in its market. Both companies faced challenges in delegating management duties and developing routines and structures to handle growth. This section describes how these companies overcame the obstacles to internationalization through their specialized niche markets, motivations for growth, unique concepts, and international brand potential. Each company employs different specialist strategies, with Zarlink using a multi-market strategy and IAC using a total market strategy. Zarlink operates in a specialized niche market due to the growing medical market caused by an aging population. On the other hand, IAC does not have a specific product.According to Zarlink, they targeted the medical implant electronics market in healthcare and focused on a niche within that market that is large for them, but too small for major players. On the other hand, IAC's expansion abroad is a response to opportunity and strategic planning. According to IAC's research interview, their growth in South Africa is a long-term strategic goal,

but they initially responded to opportunities that led to research and the acquisition of a manufacturing unit. Both companies believe they are unique in their own ways. Zarlink states that their products are made with creativity and originality without giving in to the pressures of competition in similar areas worldwide. They operate specialized facilities with integrated solutions to help their clients design and lower costs, while also reaching the market as quickly as possible. Zarlink has introduced the world's first swallowable medical devices that support new monitoring, diagnostic, and therapeutic applications (Zarlink, 2009). On the other hand, IAC believes that they are not unique but are simply "good."Zarlink designs, manufactures, and supplies electronic faculties for implant devices, emphasizing that the quality of their products is universally beneficial and can contribute to sales in countries with a growing medical market. The importance of management in the international decision-making of both Zarlink and IAC is highlighted, as their positive attitude towards expanding internationally is driven by the desire to take risks and seize opportunities. While Zarlink used to operate in the telecom industry, it shifted its focus to manufacturing medical, optical, and communication products due to the global nature of the telecom market. On the other hand, IAC aims to expand globally by utilizing a Greenfield entry mode.Due to the mentioned fiscal commitment barrier, it can be argued that both companies were willing to trade off absolute ownership control for higher risk equivalent of comprehensive agreements. Zarlink's chosen method of entry involves establishing an international sales team. Initially, the company considered acquiring another company or starting a new operation, but ultimately decided against it. Joint venture was

also considered, but the benefits did not outweigh the imposed restrictions. The use of cost-effective and low-control entry strategies not only reflects the financial limitations imposed on the company at the beginning, but also the nature of the business and its products determine which market the company should enter and what type of entry method to embark on. According to Zarlink, it chose distribution as an entry method due to the small size of the business. On the other hand, IAC entered by purchasing a manufacturing unit. The reason was that South Africans prefer buying local products, so management wanted to invest locally by buying a factory. IAC arguably had to adapt the entry method to meet local demands and quickly seize the opportunity in the market.The company did consider using agents, but they found that it did not fit their product portfolio as they wanted to maintain complete control over their business operations. In this research study, it was discovered that managerial support for international expansion included employing dedicated local individuals to manage overseas sales teams, conducting regular customer visits, and using modern electronic communications (Zarlink). IAC provides its international subsidiary with full technological support directly from the parent company in the UK. Both companies stay informed about all aspects of the business and regularly visit their overseas operations, either distributors (Zarlink) or setup operations (IAC). Through these relationships, they gain insights into markets, local conditions, and customer needs. Consequently, both organizations can incorporate any necessary changes and improvements into the rest of the administration. Zarlink's main driver and vision for expanding internationally is to create value in a targeted market for stakeholders such

as shareholders, local suppliers, owners, and employees.IAC's main reason for comparing was for enlargement purposes, and they also stated that constructing a similar model in South Africa was a motivating factor. The fact that both businesses are expanding into new international markets demonstrates their ability to identify and capitalize on opportunities for foreign market development. For example, Zarlink's identification of a niche in the medical market was crucial for their start-up and their decision to move away from telecommunications.

When it comes to decision-making for international operations, the two companies have different approaches. IAC follows a centralized decision-making process, where the managing manager drives the decision-making, although the team is also involved. The reason behind this is that "everyone else has specific tasks to perform". On the other hand, Zarlink operates with a decentralized decision-making system, where decisions are made locally. In IAC's case, decision-makers' attitudes towards relationships with external business partners and sometimes competitors played an important role in their internationalization efforts in South Africa.

In terms of financial support, Zarlink utilized training grants from the local Welsh Assembly Government (WAG) to develop the skills of local employed engineers and turn them into "business people".Zarlink utilized funding from UK authorities and the European Union Seventh Framework Programme (FP7) to develop new technologies that facilitated the company's growth and expansion. In contrast, IAC funded its international operations internally, with limited assistance from Wales Trade International (WTI) for travel expenses. However, IAC explains that obtaining funding from the Welsh Assembly Government (WAG) is a lengthy process, making it difficult to operate at a suitable pace. They emphasize the need for local knowledge and in-person visits, stating that

face-to-face interactions are more effective than emails. On the other hand, Zarlink mentions that their business requires long design cycles, so allowing ample time for the market to develop and relationships to mature is crucial. Both companies recognize the importance of networking for international business operations, as it provides essential support and assistance. Additionally, both companies acknowledge the significance of formal networking with other businesses for effective management.Zarlink and IAC, two companies, found that utilizing exhibitions and trade missions organized by MediWales helped impact their international expansion. Zarlink emphasizes that MediWales provides resources and opportunities that a small company cannot afford on its own, such as a large market base and shared results. IAC similarly believes that forming network relationships drives growth because they need to interact with real people to make an impact, rather than simply sending out a catalog of products. Both companies benefit from using networks because they gain exposure and expertise they wouldn't have otherwise. At the early stages of growth and expansion, resource limitations are apparent. IAC found that the best way to expand internationally is through business relationships with clients, partners, and sometimes even competitors. On the other hand, Zarlink developed extensive distributor networks to establish after-sales service and customization capabilities. IAC overcame their lack of knowledge about South Africa by interacting and networking with others in the industry.This research indicates that there is a greater emphasis on incremental invention, which refers to improvements made to products, services, and processes in response to customer demands. Additionally, there is a focus on radical invention, which involves the creation of new products, services, processes, and markets. IAC adopts an incremental approach

to invention by utilizing other people's products in innovative ways to meet the needs of their customers. Unlike the traditional customer-centric approach, IAC's innovation strategies primarily revolve around internal marketing efforts. The company believes in the value of hard work over invention, asserting that while innovation can be found in various small ways within the organization, it cannot replace the importance of hard work. On the other hand, Zarlink is more oriented towards radical invention due to the nature of its business. Zarlink operates within a gray area of invention and technology. Developing new products and marketing them typically takes four to five years for Zarlink, and they aim to capitalize on these innovative products for approximately two to three years before introducing a new one. However, the company aims for its products to remain on the market for around ten years before developing a new one for a specific purpose.Due to the significant technological advancements in this administration, it is crucial for Zarlink to form partnerships with other administrations. The company regularly collaborates with EU support and various universities including Cardiff, Southampton, IMEC (located in the Netherlands), and IMTEK (located in Germany). These administrations each have their own unique histories, but they also share similarities in terms of strategy and internationalization. Two types of similarities exist: Firstly, Zarlink has achieved strong and sometimes leading competitive positions on a global scale. For instance, their medical products are being utilized by the top five medical companies worldwide. In contrast, IAC's operations are primarily regional, focusing on the UK and South Africa. Secondly, Zarlink has obtained strong global positions, with their products available in numerous countries around

the world. The company also holds a significant market share in key markets, particularly within the medical sector, and possesses a notable portion of the global market. What sets Zarlink apart in terms of internationalization is their emphasis on innovation following their departure from the telecommunications industry. It can be argued that their rapid globalization was driven by the development of innovative products. In comparison, IAC has taken a different path from Zarlink.In contrast to Zarlink, IAC has concentrated its gross revenues in the UK and South Africa, showing a preference for direct selling, control, and manufacturing abroad. Unlike Zarlink, IAC has not pursued global expansion through groundbreaking innovation. As a result, IAC's product range has not been constrained by the need to focus all resources on a single global product. This explains why IAC's product portfolio is broader than that of Zarlink.

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