Elecdyne SWOT Analysis | Country SWOT For Labour

Elecdyne SWOT Analysis Country SWOT For LabourIntroductionElecdyne is a Japanese small medium enterprise based in Tokyo, which started telephone circuit in 1990 with a number of five workers. Over ten years, the growth of the smart set has change magnitude succeederfully, staff strength has change magnitude to 100 workers and with the use of engine room licensed from a number of multinationals, the company instanter produces a wide range of electronic products which include televisions, CD players, DVD players, hi-fi equipments, Mp3 players etc.A brief history into the Japanese economy shows that during the 1980s, the Japanese economy was the envy of the reality. GDP per capita had travel from $5,000 in 1960 to $15,000 in 1980, and by 1990 had eclipsed $22,000. Through the towership of companies like Sony, Japan had become the clear leader in innovation of consumer electronics products and senior lavishly volume school electronic assembly. The combination of growing ind igenous demand, orbicular consumer electronics product leadership, and many years of investment in manufacturing technology and capacity certainly benefited Japanese electronics producers the 1980s.The realize Domestic harvest-tide (GDP) in Japan expanded at an annual rate of 3.80 percent in the last quarter. Japan Gross Domestic Product is worth 4909 billion dollars or 7.92% of the world economy, according to the World Bank. Japans industrialized, free market economy is the second-largest in the world. Its economy is mellowedly efficient and competitive in aras linked to international trade, alone productivity is far lower in protected areas such as agriculture, distribution, and services. Japans reservoir of industrial leadership and technicians, well-educated and restless work force, high-pitched savings and investment rates, and intensive promotion of industrial development and contrary trade produced a mature industrial economy. Japan has a few(prenominal) natural r esources, and trade helps it earn the foreign exchange needed to purchase raw materials for its economyOverviewJapan has a history of struggling with deflation. The 1990s are often referred to as Japans lost decade because of its 10-year struggle with falling prices. As a result, a stagnant Japanese economy dampened internal consumer and business demand, as well as signifi stinkert investment in domestic electronics production capacity. As a consequence, Japanese production has grown at only fractional the rate of the total manufacturing over the last ten years, and local anesthetic production share is on a trajectory to decline to1980 levels over the undermentioned five to ten yearsOver the past two years, Elecdyne has remained stagnant the company had an initial success competing with price but is presently finding it more and more difficult to compete given its need to pay for licenses, distribution of products is limited as supplies are within the Japanese market only, diff iculty of hiring research graduates, and its high wage rates as relative to Eastern Europe and China,In line of battle to detect the pros and cons the company is undergoing, a SWOT analysis will be carried out. The analysis looks at internal factors, the strengths and weaknesses of the business, and external factors, the opportunities and threats facing the business. The SWOT analysis will give a clearer picture into the status of the company and the business environs wherein it is operating in at the present meter.STRENGTHS20 years experience in producing electronics100 staff workforcePossession of equipments needed fro production legitimate Product varietyWEAKNESSLimited market(supplies only to Japanese market)Poor financial position lack of resourcesNo growth in the last two yearsLack of innovationNo branding loyalty5% cut put through on priceStaff is less motivated inefficient to recruit RD graduatesLack of international operations low gear market shareOPPORTUNITIESFlexibili tyHigh chance for innovationAdvances in technology and the ability to mete out via the internetNew market opportunities could be a way to push elecdyneChanges in technology could give elecdyne an opportunity to bolster future success.Structural changes in the industry open early(a) doors and opportunities for elecdyne.THREATSAggressive competitorsIncrease in licence followIncreased competition from overseas is a nonher threat to elecdyne as it could lead to lack of interest in their products/services. The actions of a competitor could be a major threat against elecdyne, for instance, if they bring in unexampled technology or increase their workforce to meet demand. A slow economy or financial slowdown could nurse a major impact on elecdynes business and profits. Lack of international operations. Rapidly changing market Products become old very quickly.High cost of fag outPOTENTIAL STRATEGIES FOR ELECDYNEIn smart set to compete in the electronics market, listed below are some strategies that can be useful to Elecdyne.Reduce product range to a few Introduce the company to E-Business Company can move to an area of lower cost Source cheaper suppliers to reduce cost Develop marketing activity to leaven their products Re-branding of products in order to boost company name Offer work placements for students in order to boost RDRECCOMENDATIONAfter proper and careful analysis of Elecdyne Electronics Company, inorder for the company to grow promptly and remain in market, we the management hereby strongly recommend that the company be moved to another unpolished preferably a region that is bit of the TRIAD market, so as to gain access to more markets, deepening relations with the overseas economy.Significance of GlobalizationThe World Bank defines globalization as the freedom and ability of individuals and firms to initiate voluntary economic transactions with residents of other countries. Milanovic (2002). In this definition, freedom means the lack of barri ers in the cross-border movement of capital and drudge force, among other things, and capacity means that there is the ability to provide commodities and services across borders or to conduct economic activities in other countries. Looking pricker at the past, it appears that globalization advanced as technology and teaching-carrying capacity for transport, communications, finance, insurance and other aspects developed and political barriers to the movement of trade, capital and other items were removed. These developments boosted income levels, which in period of play further deepened economic ties. Hence globalization is a trend that brings about economic development. (Boyacigiller, 1990 Harzing, 2001). In order to enjoy the benefits of globalization, it will be necessary to promote technological innovation in companies without delay and promptly adapt economic and social schemas to respond to technological innovation, eliminate barriers and foster human resources that are ca pable to carry out these changes. Heizo (2004) Structural reform is important in Elecdynes relations with overseas economies Structural reform stimulates the domestic economy and is also important in the process of deriving benefits from globalization. In other words, the major objectives of structural reform are to ensure that the market mechanism fully functions, broadly enhance productivity and move labour and capital, among others, from low productivity areas to high productivity areas. This will also allow Elecdyne to reap benefits from closer economic ties with overseas economies. In business, the success of overseas operations has been attributed to several factors, such as good strategy, smart marketing, efficient production and excellent management.Among them, effective expatriate management has been well authenticated (Mendenhall and Oddou, 1986 Dowling et al., 1999). Despite the fact that the company has had no contact with overseas market, we the management of Elecdyn e electronics have decided to deduce a strategy on going global foc development more on countries within the TRIAD market (which are Europe, North America and South East Asia). Hence we have come up with five possible countries that we could relocate to taking into consideration two main issues- Access to technological expertise to avoid reliance on large multinationals, and cost minimisation.These countries have been chosen based on some of the following reasonsAdvanced technologyWide expanse of landFavourable business environmentLow cost of raw materials and productionHighly good labour etc.Analysis of the five countries using SWOTCOUNTRY 1-GERMANYIt is the seventh largest country by area in Europe and the 63rd largest in the world. As Europes largest economy and second most populous nation (after Russia), Germany shares borders with more European countries than any other country on the continent. Its neighbours are Denmark in the north, Poland and the Czech Republic in the east, Austria and Switzerland in the south, France and Luxembourg in the south-west and Belgium and the Netherlands in the north-west.Therefore Germany would carefully be analysed using the SWOT analysis,StrengthsGermany is the UKs number one European export market and number two world-wideamong the worlds largest and most technologically advanced producers of iron, steel, chemicals, machinery, vehicles, machine tools, electronicsMarket- Germany hosts the largest concentration of OEM plants in EuropePersonnel Germanys excellent highly-skilled labour force. 750,000 highly-trained and experienced peopleRD- Germany is home to 42 percent of all European OEM and tier 0.5 supplier automotive RD centers.Has some of the worlds best universities, these include Technical University, Munich Germany University of Bonn, Germany etcImportant research institutions in Germany are the Max Planck society, the Helmholtz-Gemeinschaft and the Fraunhofer society. They are independently or externally connect ed to the university system and contribute to a capacious extent to the scientific output.WeaknessesThe socialists are a strong force and there is labour union problem.The wages are high which increases the costs.Cultural differencesComplex business cultureStrict safety and packaging regulationsOpprtunitiesA total of 15 billion euros made available by the establishment for RD projects in cutting edge technologies.Easy access to other EU countriesHighly developed E-commerce serviceHigh demand for electronic productsThreatsThreat from new emerging marketsProtection of environment and climateMounting pressure to reduce the CO2 emissions.adjustment time for adapting the high German standardsStiff competition from local and global competitorsCOUNTRY 2- POLANDPoland is the 9th largest country in Europe it has a population of over 38million people, which makes it the 34th most populous country in the world and one of the most populous Union. Its natural resources include coal, sulphur, c opper, natural gas, silver, lead, salt, arable land. Poland would carefully be analysed using the SWOT analysis,Strengthsrelatively low cost of labour, affirmative geographic location on transit routes,large internalMarket (compared to other Central and Eastern Europe countries).availability of highly qualified labour forcepresence of universities, support of authorities, the largest market in central Europe, and possibly the lowest labour costs on the continent,Member of the EULocation among East and WestLong industrial traditionStable economyStable political systemWide educational systemBiggest country of the EU members in the CEEDiversified industryStill attractive employment costsAttractive tax systemMultinational companies such as ABB, Delphi, GlaxoSmithKline, Google, Hewlett-Packard, IBM, Intel, LG Electronics, Microsoft, Motorola, Siemens and Samsung have set up research and development centres in Poland.The Polish consumer electronics marketgrew by 4.5% in 2005 to reach a v alueof 938.5 million.WeaknessesEU Accession whitethorn drive cost of living higherPoor communication infrastructureInsufficient management cultureWeak ability of domestic RD institutes to cooperate with industry and make commercial use of scientific search resultsShortage of financial instruments for SMEs and innovation development and low ability of entrepreneurs for self-financing of development investmentVery high levels of unemploymentPoland imports much more in electronics goodsthan it exports. The value of imports is morethan twice the value of electronics exports.In 2005 Poland imported electronics goodsworth EUR 6,911.3 million. The growth rate(over 2004) was almost 22.0%.OpportunitiesThe strong inflow of FDIin this sector in LCD screens, mobile phones, domestic audio and video equipment,appliances, automotive controls complemented by electronic contract manufacturers(Flextronics, Jabil, Kimball) and telecom equipment manufacturers (Lucent, Alcatel,Siemens) creates opportun ities for sub- release, electronic components, sum chain and testing services.Poland is becoming the manufacturing hub for TVs in EuropeThreatsCurrent policies are not bringing changes about fast enough to maintain implementation of information societyIndustries in Poland will face higher costs with accession into the EUThere is an increase in competition as multinational companies are investing in the polish market.In Poland the leading manufacturersof TV sets are the international companiesJabil (commissioned by Philips), Daewoo,LG Electronics and Thomson.COUNTRY 3- INDIAThe Republic of India is in South Asia. It is the seventh-largest country by geographical area, the second-most populous country, and the most populous democracy in the world. It is bordered by Pakistan, China, Nepal, Bhutan, Bangladesh and Myanmar.Its natural resources include Coal, Iron ore, Manganese, Mica, Bauxite, Titanium ore, Chromites, Natural gas, Diamonds, fossil oil etc. India would carefully be analy sed using the SWOT analysis,StrengthsIndia is now the worlds twelfth largest economy by market exchange rates and the fourth largest in palatopharyngoplasty terms (2003) after US, China Japan.inexpensive high-skilled labour needed for theindustry is available in abundance in IndiaIndias low manufacturing costs in skilled labour and raw materialsAvailability of engineering skills.And opportunity to meet demand in the populous Indian market, are driving its electronics market.The electronics market in India, at US$ 11.5 billion in 2004, will be the fastest-growing electronics market worldwide over the next several yearsAbundant low-wage skilled/semi-skilled labour Indias strategic location offers a promising manufacturing/exporting base Abundant supply of raw materials Deregulation and liberalisation of industrial policy Incentive packages for Export bear upon Zones (EPZs) and ExportOriented Units (EOUs) are very attractive India is changing rapidly and offers an attractive opportu nity based onmarket size (200 million centerfield class by the year 2000) and growth The non-resident Indians estimated to number over 15 million have majorimpact on the Indian economy, industrial policies and foreigncollaborations India is poised to be a major industrial power by the turn of the century.It is advantageous for American firms to position themselves as partnersin this fantastic growth. The business climate of India is improving (Naidu, 1984)India is one of the largest recipients of foreign direct investment (FDI) in the world. In FY2004/05, India received $3.75 billion.WeaknessesInfrastructure that needs to be improved at the early possibility.Easing of foreign investment proceduresFrequent power failures and shortages leading to disruptionsOpportunitiesThere is a strong 100 150 million middle class thathas considerable discretionary income making India an attractive market forconsumer goods.ThreatsA restructured government duty that now makes domestically manufact ured goods more expensive than imported goods with zero tariffImport licensing regulations for non-high tech items remain a majorbarrier.UK companies are well positioned to take advantage of this growing export and investment market.Indian policy does not favour the use of limited foreign exchangefor non-essential products.COUNTRY 4- TURKEY bomb calorimeter is an emerging market with a population of around 72 million, 50% of which is under the age of 28. Turkey has the worlds 13th largest urban population at about 50 million. Its the worlds 15th and Europes 6th largest economy. Turkey is also a springboard to the markets of Central Asia the Middle East.Turkey ispolitically stable,the government having been in office for nine years. Today, Turkey is investing significant sums in upgrading its infrastructure, including projects to build new dams, airports, roads and water and sewerage systems. Its recent, record economic growth, its talented, young workforce and its geographical loc ation as a prime hub for regional market access makes Turkey a hugely attractive destination for trade and investment.StrengthsNational minimum (gross) wage, which is currently YTL 608 per calendar month (approximately 260 per month)Average basic salary Japan 250,000 450,000 yen per month (UK 1700 3200 p.m.)Turkish made colour TVs have a good reputation amongst European consumers re price qualityExperienced local labour supply in abundance. As at 2009 approx. 2000 manufacturing companies in the field of electronics, approx. 30,000 employed in this sectorWeaknessesRaw materials for the electronics sector have the highest import rate as these cannot well be sourced locallyTurkish is still the official language of commerce, although English and some German are increasingly spoken. A professional interpreter would be required for official meetings.In a year, total amount of overtime cannot exceed 270 hoursOpportunitiesFinancial incentivesStrong export orientationExports of Turkish -made consumer electronic products have increased since 1990 in 178 countries, mostly directed towards the European marketsAccess to European market.Opportunity to expand markets to countries which include Romania, Germany, Portugal, Bulgaria, Jordan, Kazakhstan, Azerbaijan CroatiaThe Turkish electronics industry is young but dynamic. It is committed to competing on an international scale by producing high quality, well-priced goods supported by a wide range of products.On-going RD activities, engineering quality efficient after-sales serviceThreatsThe consumer market is now moving towards demand for LCD Plasma TV creating a need for Turkish manufacturers to invest in new technologiesAggressive competition from national MNEs. Arcelik Beko (subsidiaries of KOC Holding) second-largest TV producer in Turkey. Has 15% approx. European market share. Beko has strong international reputation. Both have a wide product portfolio and their own technology products using plasma, LCD, MEMS t echnologies. Both companies have purchased international acquisitions such as Grundig AG (Germany) Home Intermedia System Division (2004). Arcelik has also established a partnership with Ubicom (Silicone Valley, USA) and plans to integrate the Ubicom microcontroller stem into its projects where new technologies unique in their field have been used (Smart Appliances will be launched soon to consumer market).COUNTRY 5-CHINAStrengthsHuge consumer base. All the time being lifted out of povertyCheap production. Already 30,000 factories over there.There are several free trade zones, 53 new high tech zonesIn 2003 China supported 1,552 institutions of higher learning.If Hong Kong is included it has immense technical expertise and language skills as well.If Hong Kong is included then it has an outstanding supportGNP increasing an average of 9% annually(Benson, 1996) and ranked third in theWorld (Jing, 1993).Export growth of 25% and imports up 15%(Landy, 1996). result continue to dominate l ight andmedium-tech industries because of thelarge market in China and the pool of labour.Leads world in direct foreign investment $135Billion (Taninecz, 1996). Foreigninvested companies equal 31.5% ofall Chinas exports (or about $46.9 billion).This netted about $8.4 billion in taxes(Taninecz, 1996 and China The NumbersGame, 1995.Worlds most lucrative market (Schafer,1996) of which China represents one-sixthof the worlds population(Taninecz, 1996). pleonastic labor in rural areas andimpoverished farm lands (Gao, 1994) andgrowing 10 million per year. Estimatedto reach 250 million by 2000.Lower wages than Japan and Taiwan.Weaknesses putrescence is a problem.Government controls everything and joint ventures are encouraged.Intellectual property rights not developed.Average inflation is 15%, and surpluslabour has resulted in risingunemployment and inequalities in incomedistribution (Benson, 1996).Railways, roads, communications, andpower supply are below standard.Employees need custome r servicetraining.Roads are jammed with thousands ofbicycles, buses, trucks, and taxis.OpportunitiesOpportunity for lower cost but high quality production.As technological advancements are made we can hire better RD staff.Good place to control operations due to proximity and infrastructure.Direct Investments or Joint VenturesEquity and contractual ventures providequicker access to the market. Partners inChina can help with the bureaucracy,customer base, and distribution.ThreatsAmerican turning point can hit ChinaCorruption can lead to loss of reputationUnderdeveloped Intellectual property rights can mean technology can be stolen by suppliersEffectiveness of investments in Chinawill only be evident in the long-run andpolicies make it hard for non-Chinacompanies to make money.Lack of a legal structure similar to thoseEasily understood (Taninecz,1996).Having investigated these five countries based on their strengths and weaknesses, we the management team of Elecdyne have decided to s hortlist these countries down to three which are1. Germany2. Poland3. China.