Internationalization and Cultural Implication for Joint Ventures in Saudi Arabia

International business text has paid particular interest to the study of internationalization and entry mode approaches of companies in various segments. However, very little studies that consider cultural implications in internalization have been accomplished. This paper shall review different literatures on internalization and cultural implications for joint ventures in Saudi Arabia.Advertising We will write a custom essay sample on Internationalization and Cultural Implication for Joint Ventures in Saudi Arabia specifically for you for only $16.05 $11/page Learn More First, a general explanation of the internalization process shall be presented followed by an in-depth review of joint ventures in Saudi Arabia and the cultural implications of doing business in Saudi Arabia, a nation dominated by the Islam, religion. A conclusion that summarizes the key points shall then be presented. Internalization During the process of internationalization, companies increasingly spread their business functions and activities outside their national borders (Ahmad and Kitchen, 2008). International extension compels companies to construct three tactical decisions including: which target markets to go into, the right time of entry, and the way to penetrate those preferred markets (Hill, 2008). Besides, a firm has to design a marketing plan with guidelines on how to enter the alien market and lay down a control mechanism to keep an eye on its business progress (Hill, 2008). Foreign market choice is a compound process and is separated into four phases including: state recognition, preliminary viewing, thorough viewing and final assortment (Johansson, 2008). To emerge victorious, firms must identify market prospects and discern appropriate foreign markets. Kirzner (2005) reveals that the market can not be at equilibrium due to the gaps amid the demand and supply. Hence, firms should identify these gaps and monitor the markets vigilantly for investment choices. According to Hohenthal et al. (2006), companies face diverse economic, cultural, political and organization’s situation from their home. As a result, firms may choose markets that are related to their state of origin to avoid insecurity in an alien nation (Johanson Vahlne, 2006). Time of entry is another significant decision that influences the cost and profits of investment (Kwon Konopa, 2003; Sivakumar, 2004). Market information plays a very important role in entry timing (Mitra Golder, 2007).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In case a company accumulates adequate information on the economic and cultural surroundings of alien markets; it is fitting to penetrate those markets. Deficiency of knowledge and risk evasion hinders several firms entering indefinite and risky borders (Griffin Pustay, 2007). An essential subject in international extension is that according to the timing of entry, companies face different stages of institutional insecurity, which influences the competence of the entry plan (Papyrina, 2007). Entry manner is a type of strategy and dedication of resources that a company adopts when it settles on entering an alien market. The selection of the best entry mode is amid the vital strategic decisions for companies in the course of internationalization (Nakos and Brouthers, 2004). Assuming appropriate entry modes can help a company to achieve enhanced performance and endurance in alien markets since it involves diverse threats (Ekeledo Sivakumar, 2005). Entry mode preferences are separated into two features: equity and non-equity modes. Equity entry modes incorporate joint ventures and sole ownership (Wild et al., 2008). According to Griffin Pustay (2007), non-equity modes are further separated into market leaning modes and contractual modes. When a company adopts an equity mode, it’s supposed to make a prefer ence among establishing a business from the start, purchasing an established firm, or a blend of both approaches (Griffin Pustay, 2007; Wild et al., 2008). Every entry mode approach has merits and demerits. Companies may pursue a range of criteria to select an appropriate entry mode. To acquire elevated returns from alien operations, companies may necessitate high resource dedication. Nevertheless, this augments the threat of international venture. Hence, companies must exercise superior control over their alien operations and partners (Blomstermo et al., 2006; Ekeledo Sivakumar, 2005)Advertising We will write a custom essay sample on Internationalization and Cultural Implication for Joint Ventures in Saudi Arabia specifically for you for only $16.05 $11/page Learn More Theoretical Views of Internalization Internationalization Theory As per the internationalization process theory, companies will pursue a regular process to internationalize their activ ities overseas (Johanson Vahlne, 2006). A company’s deeds during the institution of international extension begin from little resources dedication to a following greater dedication and power. Companies chiefly enter the markets that are well-known and have less paranormal space with their local state. According to Andersen ( 2003), this theory supposes that â€Å"for alien activities, a company moves via four phases starting with no consistent export deals, then export through host state mediators, followed by export via a foreign sales subsidiary, and lastly, foreign manufacture by an entirely owned subsidiary† (p. 57). Several scholars have condemned the internationalization process theory (Root, 2004). The series of phases was constrained to a precise state market (Andersen, 2003). The conjecture also ignored joint ventures and other contractual entry modes (Sharma Erramilli, 2006). Besides, this conjecture is too deterministic in character and is only significant in the premature stages of internationalization as markets turn out to be homogenous and supernatural space decreases (Melin, 2006). Networks Theory The networks method is usually founded on sociology of organizations. As Zacharakis (2005) proposes, the local state networks are initial point for the worldwide expansion of companies. Enduring competitive advantage is acquired via synergy. When a company has an enduring competitive advantage, its potential and resources are long-lasting, hard to spot and recognize, imperfect, transportable and difficult to imitate. The, theory then stresses the impact of firm-specific resources and trade networks on the global tactics of companies. In line with this theory, a system of interpersonal and inter-organizational associations that form the performance of firms to internationalize is the effect of the business and social systems but not via the internalization system of the market (Malhotra et al., 2005).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More While the network theory presents a priceless approach towards the function of systems in internationalization, it fails to clarify the outcome of environmental aspects. Eclectic Paradigm Theory According to Dunning (1988), the eclectic paradigm also known as the ownership, localization and internalization model stresses that a firms’ global extension and entry tactic relies on a company’s resources together with relational and host state factors. Grounded on this perspective, if the local market has a location advantage greater than the target alien market, making sales to other countries is an appropriate entry mode. In case the host bazaar has a position advantage, the contractual entry mode is likely to be considered by companies (Sharma and Erramilli, 2006). In case the risk of agreement with home partners is elevated, foreign direct investments become the most suitable mode; if not, licensing is assumed (Sharma and Erramilli, 2006). This theory extended to joint venture mode (Agarwal Ramaswami (2000). The theory was expanded by considering the abilities and potential of the partners, spatial amalgamation amid positions and joint organizations (Sharma and Erramilli, 2006). Regardless of its experimental support, this conjecture is unable to offer an incorporated view for the elucidation and calculation of entry mode selection. It fails to explain why two companies operating in an identical business and with parallel rights internationalize. The model also disregard the effect of local state and internal aspects like a firm’s assets and manufactured goods character on the preference of entering alien markets. Additionally, it presumes that in absence of market failure, foreign direct investment does not take place but companies are usually implicated in alliances to enhance their competitive pose (Ekeledo and Sivakumar, 2005). Transaction Cost Theory The evasion mode of action in alien markets is low-control modes, although when compa nies experience elevated transaction costs allied to bargaining, supervising and executing a contract, they will prefer high power entry modes. Transaction Cost (TC) theory, argues that when competition is perfect, companies are synchronized and resources can be relocated among companies (Ekeledo and Sivakumar, 2005). Whilst a market is entirely aggressive, the market will control transactions by price system. This theory supposes that in the market where persons are usually investors, information will be unevenly shared among all trading firms, and asset exactness influences the character of the transaction (Cheng, 2006). The TC is not capable of validating the selection of entry mode in the fresh global business scenery. It is not able to balance foreign direct investment (FDI) with exporting successfully as it focuses on market malfunction situations that outcome in FDI. Besides, the theory does not acknowledge that strategic fears can inspire a firm to use a joint entry mode. Al though this theory gives reasons as to why a company may favor FDI as its entry mode, it neglects the function of location benefits (Ekeledo and Sivakumar, 2005). Resource-Based View to Resource-Advantage Theories Barney (2005) deems that companies have a basis of competitive advantage rooted from their priceless resources like assets and abilities. Firms can battle and attain their long-term aims if they have adequate resources and employ them efficiently (Sharma and Erramilli, 2004). The resource-based view (RBV) theory proposes that a company’s achievement in the market does not solely rely on environmental aspects but also on the company’s role and power on the environment (Barney, 2005). This conjecture argues that companies with precious capabilities and resources support high power modes, particularly when it pursues an international strategy (Ekeledo and Sivakumar, 2005). Hunt (2006) built on the thoughts of RBV in his resource advantage (RA) conjecture. He ass erts that since firm resources are varied and comparatively still, a number of firms may benefit from competitive advantage and improved performance. In addition, the specific manner of function in indefinite markets relies on the sort of resource advantage (Malhotra et al., 2005). Though some scholars view the resource based conjecture as the most outstanding clarification for the international development of companies, it fails to account for the selection of some entry mode policies including joint venture. Additionally, gauging some insubstantial assets seems tricky (Malhotra et al., 2005). Factors Affecting Internalization of Firms In general, business organizations do not pursue any exclusive model to internationalize their processes since they face diverse environmental surroundings. They may go into an exacting target market via different entry approaches based on their definite resources, abilities and tactics. Two sorts of factors control the international tactic, market c hoice and the selection of entry mode that is external and internal aspects (Quer et al., 2007). Internal aspects incorporate tactical considerations and firm-specific resources which can be controlled by companies. External aspects like industry factors and country factors are typically outside the power of the company (Ekeledo Sivakumar, 2005). Koch (2004) recommended that market choice and entry mode selection are influenced by several internal features, for instance the tactical concerns, a company’s resources , alien business practice and networking, and external features including latent and risk, target market and comparison amid host and home markets. Joint Ventures in Saudi Arabia Joint ventures are the leading type of multinational business in Saudi Arabia. Besides, joint ventures are commonly favored by most industrial investors in Saudi who are in search for foreign allies. A joint venture in Saudi Arabia normally involves a business amid a company that has super ior business and technical abilities and a company that boasts superior local acquaintance and broad commercial potency (Mababaya, 2002). One of the toughest pleas of joint ventures is that they significantly decrease, by the sum of the partner’s input to the business enterprise, the fiscal and political threats which are the chief barriers to direct foreign investment. Most entrepreneurs feel that the existence of a home partner in a business enterprise overseas safeguards absolute expropriation in the more wobbly nations in the globe. Similarly, some other emerging nations do not allow a subsidiary run by an alien licensor to pay royalties. An additional benefit of joint ventures is that they ease admission into a novel market and access to market data. Joint ventures are also beneficial in pooling the required capital, knowledge and skills, which are feasible amid local and alien partners (Ali, 2009). Jointly, the partners provide capital which either one solely would not afford or fear to risk. With the increasing demand for private investment among other motives, most people believe that the all-inclusive joint business venture will eventually turn out to be the most vital means of private foreign investment in the world. In the emerging world, Saudi Arabia included all types of joint ventures lead international activities (Mababaya, 2002). Actually, joint ventures are employed four times more often in less industrialized nations than in industrialized nations. Nevertheless, all these does not mean that joint venture in the less industrialized nations, counting Saudi Arabia, does not pretense any possible disadvantage. From the stance of multinational businesses, one general problem they encounter is finding suitable partners in the alien nations, who have both administrative talent and funds (Ali, 2009). Some global companies favor totally owned subsidiaries overseas as they are not ready to sacrifice sovereignty of action in their fabrication and marketing actions either locally or overseas. For them, joint ownership means joint administration, takings and control. A number of companies may try to evade joint venture due to the complexities occurring from disparities in cultural values and principles of business, which force them to compromise so as to persist and do well (Ali, 2009). In some emerging nations, joint ventures may equally be negatively affected by detrimental business environment occurring due to substandard communication services, poor infrastructure and bad market projections. Apart from the need to deal with cross-cultural disparities, the abovementioned problems of cross-region joint ventures do not exist in Saudi Arabia. Actually, a joint venture amid an alien entrepreneur and a Saudi partner is deemed the best, in addition to being the most common method of doing business in Saudi Arabia (Mababaya, 2002).Multinational organizations having joint ventures in the territory profit from the accessibility of first-class infrastructure, up to date communication amenities and low-priced public services. Similarly, Saudi Arabia’s strategic position being in the middle of West and East allows it to be an excellent base for supply in the close bazaars of the Middle East and other places. Joint ventures with Saudi partners are as well striking due to the existence of an established economic and political atmosphere; knowledgeable personnel in marketing and administration; good fiscal, credit and borrowing services from banks; as well as tax holidays (Ali, 2009). Fresh incentives to alien investors have additionally been established in the Foreign Investment Act. Under this fresh act, alien investors are permitted have complete ownership of ventures and to enjoy liberty to send back profits and capital (Mababaya, 2002). Similarly, a licensed business venture mutually owned by a Saudi resident and an alien partner or entirely owned by an alien investor shall have all the motivations, ben efits and securities of a national venture consistent with all relevant policies and orders. In every joint venture, the alien partner should be set to realize and consider the desires of his local complements in the business. In fact, practicing a joint venture across state borders requires trust, thoughtfulness, taking several risks, setting-up connections, conciliation skill and tolerance on both parties concerned. Trust is an essential requirement for the collaborating group to fruitfully pursue their joint aims. Equally, partners’ dedication must be there for the joint venture to thrive. Alien companies should also consider investment guidelines of the regime in the host nation. In several Asian states and in many other places, foreign direct investment is permitted but foreign impartiality is limited to less than 49%. In Saudi Arabia, the regime does not bar the institution of a 100% alien controlled company, although pursuing it will deny the global business a chance t o get incentives that are typically given to joint ventures in Saudi Arabia. Generally, joint venture agreement or the wider notion of coalition capitalism is regular with the concept that synchronization is made on an arm’s length center or inside the open market structure. Joint ventures match with liberated private enterprise economies, where harmonization of fiscal activities takes place through non-coercive deliberate collaboration, so that the parties concerned can take lead of the recent science and knowledge. Joint venture in Saudi Arabia is registered as a disconnect joint-stock business, which is take care of just like other home joint-stock businesses with both collaborating firms fairly embodied in the board of executives (Mababaya, 2002). Concerning tenure, decision-making and management, the capacity of the alien colleague to manipulate the joint venture is directly relative to its capital contribution to the enterprise (Ali, 2009)..similarly, the costs of commo dities delivered from the joint venture to the collaborating firms are resolved freely in relation to the market relations of supply and demand. Depending on the contract amid the joint venture partners, experimental prices may be used to ease smooth stream of goods and services amid the joint venture and the collaborating firms. Similarly, experimental prices may be made rigid for the supply of production from the joint venture to some contracted cross-boundary market channels, including associates of any of the two partners. In reality, the experimental prices will later be outmoded by final prices dogged in relation to some pricing formula that is grounded eventually on the open market price method. Following this logic, the survival of joint ventures cannot be explicated via the presumption of international production or internalization theory of multinational activities (Ali, 2009). This is the case since the internalization theory deems the propensity of multinational companie s to internalize a market, for instance through vertical integration, as a way of overriding the price system or the free market system. A joint venture can also be preferred in Saudi Arabia as a subsidiary of the Saudi fiscal counterbalance program. Counterbalance programs are types of counter-trade actions used by growing economies usually in an attempt to decrease the heavy load of contract-founded imports (Mababaya, 2002). The counterbalance scheme amid contracting members may entail joint ventures, skill transfer and goods exchange. In addition, it could also contain foodstuff importation, building projects, arms procurements and supply of administration services. For instance, the Peace Shield I, a pact signed amid Boeing Co and the Saudi government is a counterbalance project. The verdict by any multinational firm doing or preparing to do trade in Saudi Arabia relies on several factors. Generally, these factors consist of: the charisma of the host nation’s location-spe cific advantages, the want to develop market shares and the want to make more gains (Ali, 2009). The organization’s propensity towards shielding and utilizing its personal company-specific advantages, such as the ownership of a relatively advanced techno logy, also manipulates its plans and resolutions to invest in a foreign country. similarly, the strategic powers and core values of a company, particularly the one that merits the title of a futurist firm, pressures the success of its policies, strategies and activities at home or globally. In Saudi Arabia, international business activities cover all types of commercial, value-adding actions outside the boundaries of global production (Ali, 2009). Some of these include: setting up global marketing agencies, appointing managers, comprehending direct import/ export, planning project administration, and seeking certification. In Saudi Arabia, main multinational car manufacturers enter the market through their selected local dist ributors or via opening their individual marketing and maintenance agencies. Car producers such as Chrysler, Mercedes Benz, Ford, Toyota, Nissan and General Motors are all embodied in the Saudi market via their individual sanctioned local agents or brokers (Mababaya, 2002). Famous multinational businesses such as Mitsubishi, Shell and Mobil have chosen to form joint ventures as a way of acquiring shares in the Saudi bazaar and close area markets. These multinational firms do not have their individual manufacture subsidiaries in the realm, despite their personal ownership-specific advantages such as machinery, administration expertise and profuse capital (Ali, 2009). Some multinational firms have diverse sorts of businesses in Saudi Arabia. For example, some firms offer consulting and technology services while still serving as suppliers for government ventures. Key multinational firms have practically no wholly industrialized subsidiaries in Saudi Arabia, since the state policy does not actually support it. What the regime encourages is for alien firms to have mutual business enterprises with Saudi firms or Saudi habitats. In isolation, multinational firms select other business paths other than worldwide production. However, this does not imply that alien companies are banned from having entire subsidiaries in the realm. As revealed before, the Saudi administration adopted the Foreign Investment Act which permits alien investors to have full tenure of ventures and grants them freedom to send back capital and labors. It is important to note that alien firms, covering no direct foreign investment in Saudi Arabia, can typically export their goods to the realm without major hurdles (Ali, 2009). Thus it is quite usual to see key brands of eminent American firms such as Hewlett Packard, IBM and Compaq in Saudi Arabia. These goods are neither formed in Saudi Arabia nor in America, but in South Korea, China or in other places. These firms choose to export their goods t o Saudi Arabia from their subdivisions in other places, rather than internalizing the Saudi souk. In theory, internalization happens only if the profits outpace the equivalent overheads (Janssen Sandberg, 2008).Foreign government rules and boundaries need to be reflected on also while internalizing a market. Internalization is the practice of creating a market inside a company. The interior market of a firm takes alternates for the missing customary or peripheral market. Economic allotment and sharing inside the internal market occurs via executive fiat, together with transfer pricing. The internalization method accounts for the rationale behind internal and domestic fabrication. Also in theory, when the business costs of the usual market are extreme, a strong incentive for firms to make interior markets will come to existence (Janssen Sandberg, 2008). Similarly, firms institute entirely owned subsidiaries across state borders so as to conquer or reduce qualms and instabilities in the provision of expected raw materials. They also wish to reduce transaction costs implicated in looking for and procurement of unrefined resources; to reduce qualms related to post- procurement sustenance; and to reduce overheads of organizing inputs. Global firms can be enticed to invest in an alien state, if the alien state has competitive advantages proportional to other states (Hamilton, 2009). In the instance of Saudi Arabia, competitive advantages include: existence of up to date airstrips and seaports; existence of outstanding inter-city public roads and good road network; and enhanced communication amenities. These benefits are quite inspiring and among the finest in the globe. Actually, Saudi Arabia has many determinants of state benefits. For example, with respect to the factor surroundings, current fundamental industries in Saudi Arabia have in past years attracted key multinational firms to venture in the realm. Big international companies such as, Mobil, Shell and Ex xon formed joint ventures in the kingdom (Johanson Vahlne, 2006). The investment income from these businesses has been extremely good. Plentiful low-cost materials are united with up to date infrastructure and low-priced skilled manual labor supply from Asia and other countries. Concerning demand situation, the Saudi bazaar for consumer and industrial commodities is the leading in the Middle East, and continues to expand every day. There is also the existence of allied and sustaining industries in Saudi Arabia, which are globally aggressive. Similarly, the situation of competition in many consumer goods sold in the whole territory is enough to cause global firms to react competitively and sensibly. In other words, how multinational firms function in Saudi Arabia and in other areas of the sphere is part of internalization practice which takes the shape of worldwide trade and joint ventures allowing entirely owned ventures among other elements (Janssen Sandberg, 2008). It is a pract ice where the groups of actors concerned have to pact with a dynamic atmosphere where the operation of change is the custom, but not exclusion. It also engrosses international co-ordination and combination of actions, if the condition dictates and there is receptiveness to market-specific necessities and circumstances. Global business players require strategic views, tactical positioning and all kinds of appropriate management practices to tackle globalization inclinations and transformations (Hamilton, 2009). They can not fuse to merely one cross-border trade option, similar to that of entirely owned global production. Sometimes, they have to make very hard choices, such as decisions related to: purchases, joint ventures, unions and licensing, for them to endure and developing the modern business environment (Hamilton, 2009). Similarly, the matter of control and ownership of transnational business is a hard decision since it is not regarded as a monopoly. At times, business partner s disintegrate and become rivals while at other times rivals turn out to be friends through joint ventures. Key business players at times fight on the international face by distributing similar goods and services while other times they work as partners through joint ventures which creates and markets similar or different goods. Hence, in the current business globe, it is difficult to come across a global firm that lacks a joint business partner in the vicinity or globally. Joint ventures constantly feature in business news. In prospect, the same tendency may persist, provided that the players find shared satisfaction and gains in their tactical decisions and dealings. Nevertheless, as nations stick to the globalization economies growingly, blockades to foreign investments may all ultimately vanish. If international ventures do not have to fret about alien government intrusion together with host state nationalization force and policy restrictions in prospect, they may be lured to lea ve joint ventures and may turn to entirely owned business procedures ( Mababaya, 2003). This situation may be coaxing, considering that joint ventures are not usually the best alternative for multinationals as it requires hard decisions regarding ownership arrangement, administration constituents and sharing profit. In Saudi Arabia, the joint venture course is still overriding, and is projected to stay so in the near future. Cultural Issues and Implications Saudi Arabia acts as the center for all Muslims in the world, since this is where the two holy cities of Makkah and Madinah are located. This implies that Islamic culture and moral values are considered central to be understood by multinational firms doing trade or preparing to venture in Saudi Arabia (Whetherly Otter, 2011). In the business area, multinational firms doing or preparing to do business in alien nations such as Saudi Arabia will have better competitive advantages and will be in a position to improve their competiti ve stances and benefits as they get more acquainted with the Islamic culture ( Mababaya, 2003). On the trade and industry front, Muslims are directed by open cultural principles, which have significant implications to real business existence. Allah instructs Muslims to be honest and not to leave justice in all interactions with people, including trades dealings. Business actions or transactions, particularly but not restricted to those bearing potential executions, are required to be documented into written agreements appropriately signed by them and their observers (Whetherly Otter, 2011). The subjects involved in the business must devotedly abide by the documented contracts and accomplish all commitments they have settled upon (Mababaya, 2003). Like a cost-effective man, committed Muslims exactingly adhere to these basic business-legal principles, and those who transact with them are required to act in a related manner. This must be borne in mentality by those who have business c oncern in Saudi Arabia or in another place in the Muslim environment. Both vendors and buyers are required to be precise in weighing commodities (Mababaya, 2003). Debtors are also compelled to compensate their debts. In case a Muslim passes on, his bequest can only be dispersed to his legitimate heirs upon compensation of any debts.similarly a Muslim lender is expected to be moderate to his debtor. He must give his debtor adequate time to reimburse him. However if he decides to decline the debt and regard it as a donation to him or her, that will be healthier for him. Appreciating the Islamic veto of usury is vital for multinational firms doing or preparing to do trade in the Muslim environment (Mababaya, 2003). Parties implicated in trade must stay away from usury. In addition, the parties concerned in business must shun corruption, hoarding and monopoly (Whetherly Otter, 2011). A few Islamic guiding principles for commerce include: openhandedness of both the vendor and the consum er; evading going into a transaction when someone else is already undertaking the deal; common consent; support of importation of merchandise and restriction to hoarding; censure of taking vows in business; and promotion of income sharing and partnership (Beekun, 2008). Islam forbids theft or burglary and regards it as a capital crime. Islam also forbids land seizure. Betting together with the buying, selling and use of liquors are all banned (Shoult, 2006). Selling of images with animated items is also not permitted in Islam. Selling of liberated individuals to slavery is as well prohibited. Other prohibited commerce includes making prophecies in exchange for money and practicing prostitution (Whetherly Otter, 2011). Islam bans all these and other illegal business dealings as they cause harms, differences and insecurity in the world. They also unlock doors to wicked actions, which make people to commit more sins. When it comes to meeting the essential wants, a Muslim is obliged by Allah to eat just what is legalized and fine. For instance deceased meat, pork and blood are not legalized by Allah the Almighty. In fact, the ban of flesh from swine in Islam is categorical and strictly observed by all practicing Muslims. Muslims should also not consume anything that is used for sacrifice or meat from any animal that is murdered by choking or by being blushed to demise (Beekun, 2008). Muslims are also not permitted to consume anything that undomesticated animals have partially consumed and any flesh alienated by raffling with bullets. Prevention of smoking in Islam is founded on the fact that Allah counsels people not to let their own hands add to their annihilation and not to consume up their possessions in prides (Ali, 2009). A multinational corporation that is conscious of all these restrictions will have the benefit of not hurting the Muslim clients. It will be in a position to shun mistakes and problems that it may encounter in trading with its Saudi ally on a cultural foundation. A global firm can augment its competitiveness by investigating on what the Muslim consumers’ desire (Ali, 2009). Any company that always holds to meeting consumer necessities will be successful in the long term. In fact, these restrictions in Islam have very significant implications to global firms. Conversely, Islam requires people to do what is good and legitimate. It motivates fortification of the environment, planting seeds and trees, preservation of natural resources and the security of individual and other’s possessions (Mababaya, 2003). To pass on while defending possessions is a form of martyrdom among the Muslims. This means that Muslims do not accept unfairness, treachery, scams, deceit, cheating, fraud, and other outlawed business dealings in their economic hunt. Allah expects faithful Muslims to take pleasure in the rewards that He has given them in legitimate ways. Simultaneously, He cautions them not to be profligate or to commit ov erindulgence in their consumption of resources. The law is toward self-control in spending. Islam stresses and pays hard efforts. A person has to labor hard to make his living. Islam also supports donations to the deprived and the disadvantaged. However, Islam dejects begging and stinginess (Beekun, 2008). Begging as vocation is forbidden. Incentive and reimbursement programs must be proportional to worker’s pros, productivity and assistance to the enterprise. Managers are required to pay wages and salaries of workers on time. The importance of time is also a component of Islamic experiences. Muslims are obliged to pray frequently; five times each day. They are also required to give Zakat occasionally in each year. They should carry out fasting and pilgrimage throughout the set periods. Time should be spent sensibly to do good deeds and bond to those who teach the traditions of Islam. Time must never be shattered in unlawful trading. When commerce is carried out with extreme honesty, justice and impartiality, it turns out to be a kind of worship (Beekun, 2008). For Muslims, everything that delights Allah is a type of worship, provided that it is conducted earnestly for Him, and provided that it is conducted in agreement with the Sunnah and the Qur’an. Muslims are required to be vibrant and progressive, as Allah cannot transform their circumstances if they themselves have not agreed to change. Both consumers and vendors have to be precise in weighing commodities and must be solid in avoiding dishonesty. The position of women in the whole Muslim humanity is actually intertwined with Islam (Shoult, 2006). In Islamic religion, sacred and moral responsibilities are similar for both women and men. A small number of exclusions subsist in this respect, although they favor the part of a woman. For example, she is excused from some sacred responsibilities like fasting and prayer during her normal monthly periods. She is too not expected to attend the compu lsory prayers held in the mosque. This happens because Islam religion considers a woman’s key roles to be that of taking care of the family and maintaining the homestead. On the money-making face, Islam does not forbid women from laboring remote to the household setting. In contrast, it has given them the freedom to own and run their personal enterprises (Shoult, 2006). Regarding the matter of women in the Saudi Arabian labor force, a huge number of them are in employment. The regime is also preparing to open the private segment so as to provide work for Saudi women aligned with the kingdom’s plan towards making employment public. In this view, constructing markets and shopping centers that are special for women are a few of the strategies to create employment prospects for women in Saudi (Shoult, 2006). In conclusion, Joint ventures are the leading type of multinational business in Saudi Arabia. A joint venture in Saudi Arabia normally involves a business amid a compa ny that has superior business and technical abilities and a company that boasts superior local acquaintance and broad commercial potency. Among the benefits of joint ventures is that they ease admission into a novel market and access to market data and pool the required capital, knowledge and skills, which are feasible amid local and alien partners. Joint venture in Saudi Arabia is registered as a disconnect joint-stock business, which is take care of just like other home joint-stock businesses with both collaborating firms fairly embodied in the board of executives. In assumption, internalization happens only if the profits outpace the equivalent overheads.Foreign government rules and boundaries need to be reflected on also while internalizing a market. Global firms can be enticed to invest in an alien state, if the alien state has competitive advantages proportional to other states. In the instance of Saudi Arabia, competitive advantages include: existence of up to date airstrips and seaports; existence of outstanding inter-city public roads and good road network; and enhanced communication amenities. Actually, Saudi Arabia has many determinants of state benefits. For example, with respect to the factor surroundings, current fundamental industries in Saudi Arabia have in past years attracted key multinational firms to venture in the realm. Saudi Arabia acts as the center for all Muslims in the world, since this is where the two holy cities of Makkah and Madinah are located. This implies that Islamic culture and moral values are considered central to be understood by multinational firms doing trade or preparing to venture in Saudi Arabia. In the business area, multinational firms doing or preparing to do business in alien nations such as Saudi Arabia will have better competitive advantages and will be in a position to improve their competitive stances and benefits as they get more acquainted with the Islamic culture. On the trade and industry front, Muslims a re directed by open cultural principles, which have significant implications to real business existence. For instance, Muslims are expected to be honest and not to leave justice in all interactions with people, including trades dealings. Islam also forbids theft or burglary, land seizure, betting, buying, selling and use of liquors, selling images with animated items, fortune telling and prostitution. When commerce is carried out with extreme honesty, justice and impartiality, it turns out to be a kind of worship. For Muslims, everything that delights Allah is a type of worship, provided that it is conducted earnestly for Him, and provided that it is conducted in agreement with the Sunnah and the Qur’an. A multinational corporation that is conscious of all these restrictions will have the benefit of not hurting the Muslim clients. It will be in a position to shun mistakes and problems that it may encounter in trading with its Saudi ally on a cultural foundation. A global firm can augment its competitiveness by investigating on what the Muslim consumers’ desire. Any company that always holds to meeting consumer necessities will be successful in the long term. In fact, these restrictions in Islam have very significant implications to global firms. References Agarwal, S. Ramaswami, S. N. (2000).Choice of foreign market entry mode: impact of ownership, location and internalization factors. Journal of International Business Studies, 23 (1), 1-27 Ahmad, S. Z. Kitchen, P. J. (2008). Transnational corporations from Asian developing countries: the internationalization characteristics and business strategies of Sime Darby Berhad. International Journal of Business Science and Applied Management, 3 (2), 21-36. Ali, A. (2009). Business and Management Environment in Saudi Arabia. New York: Routledge Andersen, O. (2003). On the internationalization process of firms: a critical analysis. Journal of International Business Studies, 24 (2), 209-231. Barney, J. B. (2005). Strategic factor markets: expectations, luck, and business strategy. Management Science, 32 (10), 1231-1241. Beekun, R. (2008). Islamic Business Ethics. 2nd Ed. Herndon: International Institute of Islamic Thought. Blomstermo, A., Sharma, D. D. Sallis, J. (2006).Choice of foreign market entry mode in service firms. International Marketing Review, 23(2), 211-29. Cheng, Y. M. (2006). Determinants of FDI mode choice: acquisition, Brownfield, and Greenfield entry in foreign markets. Canadian Journal of Administrative Sciences, 23 (3), 202-220. Dunning, J. H. (1988).The eclectic paradigm of international production: a restatement and some possible extensions. Journal of International Business Studies, 19 (1), 1-31. Ekeledo, I. Sivakumar, K. (2005). Foreign market entry mode choice of service firms: a contingency perspective. Journal of Academy of Marketing Science, 26 (4), 274-292. Griffin, R. W. Pustay, M. W. (2007). International business: a managerial perspective. 5th ed. N ew Jersey: Pearson Education Inc Hamilton, L. (2009). The international business environment. New York: Oxford University Press. Hill, C. W. (2008). Global business today. 5th Ed. New York: McGraw-Hill Hohenthal, J. Johanson, J. Johanson, M. (2006) Market discovery and the international expansion of the firm. International Business Review, 12, 659-672 Hunt, S. D. (2006). Foundations of marketing theory. Armonk, NY: Sharpe Janssen, H. Sandberg, S. (2008). Internationalization of small and medium sized enterprises in the Baltic Sea Region. Journal of International Management, 14, 65-77. Johanson, J. Vahlne, J. E. (2006). The internationalization process of the firm – a model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8 (1), 23-32 Kirzner, I. M. (2005). Competition and entrepreneurship. Chicago: University of Chicago Press Koch, A. J. (2004). Selecting overseas markets and entry modes: two decision processes or one? Marketing Intelligence and Planning, 19 (1), 65-75. Kwon, Y. C. Konopa, L. J. (2003). Impact of host country market characteristics on the choice of foreign market entry mode. International Marketing Review, 10 (2), 60-76. Mababaya, M. (2002). The role of multinational companies in the Middle East: the case of Saudi Arabia. London: University of Westminster. Mababaya, M. (2003). International business success in a strange cultural environment. USA: Universal Publishers Malhotra, N., Agarwal, J. Ulgado, F. (2003). Internationalization and entry modes: a multi-theoretical framework and research propositions. Journal of International Marketing, 11 (4), 1-31. Melin, L. (2006). Internationalization as a strategy process. Strategic Management Journal, 13, 99-118. Mitra, D. Golder, P. N. (2007). Whose culture matters? Near-market knowledge and its impact on foreign market entry tinning. Journal of Marketing Research, 39, 350-365 Nakos, G. Brouthers, K. (2004). Entry mode choice of SMEs in central and Eastern Europe. Entrepreneurship Theory and Practice, 3, 47-62. Papyrina, V. (2007). When, how, and with what success? The joint effect of entry timing and entry mode on survival of Japanese subsidiaries in China. Journal of International Marketing, 15 (3), 73-95. Quer, D., Claver, E. Andreu, R. (2007). Foreign market entry mode in the hotel industry: the impact of country- and firm-specific factors. International Business Review, 16, 362-376. Root, F. R. (2004). Entry strategies for international markets. Lexington: D. C.Heath Sharma, V. M. . Erramilli, M. K. (2006). Resource-based explanation of entry mode choice. Journal of Marketing Theory and Practice, 4, 1-18 Shoult, A. (2006). Doing Business with Saudi Arabia. City: GMB Publishing Sivakumar, K. (2004).Simultaneous determination of entry timing and involvement level: an optimization model for international marketing. International Marketing Review, 19 (1), 21-38. Whetherly, P. Otter, D. (2011). The bu siness environment: themes and issues. Oxford: Oxford University Press Wild, J. J., Wild, K. L. Han, J. C. Y. (2008). International business: the challenges of globalization. 4th Ed. New Jersey: Prentice hall Zacharakis, A. L. (2005). Entrepreneurial entry into foreign markets: a transaction cost perspective. Entrepreneurship Theory and Practice, 23-39. This essay on Internationalization and Cultural Implication for Joint Ventures in Saudi Arabia was written and submitted by user Jason Mcbride to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Famous Blessings, Sayings, and Songs About Hanukkah

Famous Blessings, Sayings, and Songs About Hanukkah The name of this Jewish holiday can be spelled many different ways, but the two most widely accepted are Hanukkah and Chanukah. The holiday is also known as the Festival of Lights. In honor of the celebration of Hanukkah, here are some blessings, proverbs, thoughts, and even a song from famous people such as American film producer Ralph Levy, American author Dave Barry, poet Hannah Senesh, and many others. Dave Barry In the old days, it was not called the Holiday Season; the Christians called it Christmas  and went to church; the Jews called it Hanukkah and went to synagogue; the atheists went to parties and drank. People passing each other on the street would say Merry Christmas!  or Happy Hanukkah! or (to the atheists) Look out for the wall! Chinese Proverb It is better to light a candle than to curse the darkness. Allen Ginsberg From: Psalm III Let the crookedness and straightness bespeak the light. Ralph Levy Now, near the Winter Solstice, it is good to light candles. All the nice meanings of bringing light to the world can be beautiful. But perhaps we are concentrating on lighting the world because we dont know how to light up our own lives. Hanukkah Blessing May This Festival of Lights bring Blessings upon you and All Your Loved Ones for Happiness, for Health, and for Spiritual and Material Wealth, and May the Lights of Chanukah Usher in the Light of Moshiach and a Better World for All of Humankind. Rabbi David Hartman The major question, which we must ponder on Hanukkah, is whether the Jewish people can develop an identity that will enable it to meet the outside world without feeling threatened or intimidated. The choice, hopefully, need not be ghettoization or assimilation. We can absorb from others without being smothered. We can appreciate and assimilate that which derives from foreign sources and at the same time feel firmly anchored to our particular frame of reference. Emma Lazarus, The Feast of Lights Kindle the taper like the steadfast star Ablaze on evenings forehead oer the earth, And add each night a lustre till afar. Ralph Levy Hanukkah - Another View We have focused on the miracle-thing and I think we often overlook the message of Hanukkah. To me, the core of the holiday is the cleaning of the temple... The accomplishment was in restoring the temple to the purpose for which it was built. Now think of the temple as a symbol. Perhaps it represents my life. The world has tried to use me for its own (perhaps good, but none-the-less extrinsic) purposes. But now I can rededicate myself to my own original purpose. II Maccabees 10. 6-7 They celebrated it for eight days with gladness like Sukkot   and recalled how a little while before, during Sukkot,   they had been wandering in the mountains and caverns like wild animals. So carrying lulavs ... they offered hymns of praise   to God who had brought to pass the purification of His own place. Charles Reznikoff From the poem: Meditations on the Fall and Winter Holidays The miracle, of course, was not that the oil for the sacred light - in a little cruse - lasted as long as they say; but that the courage of the Maccabees lasted to this day: let that nourish my flickering spirit. Adam Sandler From the song: The Hanukkah Song   Put on your yarmulke, Here comes Hanukkah! So much funukah, To celebrate Hanukkah! Hanukkah is the festival of lights. Instead of one day of presents, we have eight crazy nights. Hannah Senesh Blessed is the match consumed in kindling flame. Blessed is the flame that burns in the secret fastness of the heart.

International Marketing Theories Essay Example | Topics and Well Written Essays - 2750 words

International Marketing Theories - Essay Example The theory that is most applicable for companies that produce fast moving consumer goods is Quelch and Hoff who suggest that it is better for companies to achieve economies of scale by concentrating on the total demand of a number of countries; this can help them achieve a higher learning curve through an accumulated experience. Companies like Procter & Gamble have concentrated their detergent production for example in fewer plants thus taking advantage of lower costs because of economies of scale. But, like products many companies can also use a global communication approach by standardizing the product and also the promotion technique at both ends. Same ads can be used to target similar markets, thus economies can be achieved if expensive commercials are used. And we see popular examples like Lux which is truly an international brand name and the same premium position that its focus is. Similarly as products grow in their life cycle national brands also go global. These global bran ds capture the global customers as its market in the sense that it really sees the customers similarity and wipe out any differences that it may see to target then with a single stick.

A Raisin in the Sun Essay Example | Topics and Well Written Essays - 1250 words

A Raisin in the Sun - Essay Example This causes disagreements between the family members as everyone has different ideas on how the money should be used. They rent a house particularly in a white neighborhood, but they are not very welcome. This is evident by the way Karl Lindner the white neighborhood’s representative asks to buy them out with a very generous offer. At the end of the play, the family leaves with their pride of being black and refuse the money offered by the white people. This paper therefore seeks to analyze the play A raisin in the sun and show how racism was deeply rooted back in the 1950’s and the manner in which blacks always wanted to pursue the American dream where they would hope to have â€Å"life, liberty as well as the pursuit of happiness†. Looking at the social climate of the 1950s and 1960’s as displayed by the play, it is easy to see that black people lived in poor conditions as compared to white people. In this era, most of the public buildings in the white n eighborhood were full of racial segregation. White people did not mingle or live together with black people as they were thought to be of an inferior class. Many whites were also of the belief that by having black people in a white neighborhood, the value of their property would go down1. ... given in the year 1952 by the Women’s committee to end discrimination in the medical services, it was seen that there was a high connection between high death rates in black people and hospital segregation2. Still in the schools black children attended sub-standard schools as compared the white children. In most of the public schools together with colleges, racial segregation was rampant and blacks attained marginal education as compared to white children. Despite the fact that the Supreme Court in the year 1954 made a ruling using the Brown v. Board Education, that school segregation was not constitutional, it took quite a number of years for it to be implemented. In terms of the economic climate that the blacks faced during the 1950s, there was a lot of racial discrimination, which led to blacks getting very low paying jobs. After the Second World War, black veterans went back home so as to share their victory and live the American Dream. This however was not to be a reality for them as they were prohibited from settling in the upcoming suburbs. This is similar to the raisin in the sun play where Mama and her family are being asked to leave particularly because it is a white neighborhood. In the 1950’s black Americans have no choice but to live in cramped areas whereby even finding good jobs is equally hard. Unfortunately, candidates who are educated and are highly qualified for good jobs are not also lucky and they also face racial discrimination when the hiring process is on; for this reason, they have to settle for odd jobs. Black American population between 1940 and 1970 had drastically increased from 50 percent all the way to 80 percent. In the south, many black Americans lost both mining and share cropping jobs particularly due to the government investing

Museum Paper Essay Example | Topics and Well Written Essays - 1000 words

Museum Paper - Essay Example There are various writings on the coffin that indicate of the mummy’s social identity as a fertility god. The major aspect of the writing is the prayer that ensures that Irethorrou is supposed to receive meals that entail of â€Å"good and pure things† to achieve its eternity. The lineage of Irethorrou is outlined on the coffin, and tis includes of the Akhimim city. Based on the information written on the coffin, we note that Irethorrou was a wardrobe-priest, responsible for caring for the god’s statue. This means that the Egyptians purified the statue, cleaned it adnd clothed it on a daily schedule. The major aim of Irethorrou was to specialize in fumeal rituals, since he was a servant of the funerary duty Osiris-Sokar. The mummy boy is wrapped in linen and it has amulets made of stones. They are positioned strategically at crucial points on the swaddling linen. It is important to note that the positioning of the amulets in the linen layer close to the body is described to posses’ magical effects that are connected to the Egyptian belief in resurrection. The amulets are placed on the Mummy in a manner that enables individuals to realize the traditions associated with the treatment of the head. These aim at reawakening and reanimating the body. We note that there are amulets placed on the right eye of Irethorrou, and they have direct associations with the atef god. The deities are situated together with a belief that they will work in a speeded and secure manner to ensure that Irethorrou resurrects. However, we note that the life and death of Irethorrou is not indicated however, it is estimated that the mummy lived to be around forty to fifty years. The cause of his death is not identified although various bumps on its back skin characterize the infection of a deadly disease. The Cantor Arts Center is an art collection center that entails of different works from the entire globe. The collections usually

Analysis Of Strategic Changes Of Tata Steel Group Marketing Essay

Analysis Of Strategic Changes Of Tata Steel Group Marketing Essay Figure 1 Tata Steel currently is a major player in global steel industry. In year 2005 (Figure 1), Tata Steel operation was mainly focused in Indian subcontinent and revenue generated was close to US$ 5.0 billion only. However their initiative to expand their operations globally proved very successful over last five years. From being a mere local steel producer, they transformed themselves into a major global player in steel producers (Figure 2). They have been aggressively involved in capacity expansion by acquisitions and organic growth. Business Standard once commented that Tata Steel moved into its next target to become the worlds second largest steel company by 2012 with the help of its most expensive bet worth US$ 12.9 billion on Corus Group. Figure 2 Table 1: Worlds Top Ten Steel Producing Nations (in million tonnes) Last two years has been very difficult period to global steel industry because of worldwide recession. The global crude steel production for year 2009 was 1220.0 mpta (million tonne per annum) as reported by World Steel Association lower by 8% against that of 2008. The decline in demand was due to deterioration in economy experienced by key steel end users. Table 1, shows the growth/decline in terms of crude steel production for the top ten steel producing nations. However, by acquisition of Corus and other assets, Tata Steel now ranks among worlds top ten (Table 2) largest steel producers with current steel production capacity of 32.0 mpta. After five years of its expansion programme, Tata Steel is now worlds second most geographically diversified steel producers. Table 2: World Top Ten Steel Producing Companies Mission Statement In its mission statement Tata Steel expresses that while honesty and integrity are the essential ingredient of a strong and stable enterprise, profitability provides the main spark for economic activity. Founded way back in 1907, Tata Steel stress on their core ideology in its vision statement by making emphasis on their people, supplier of choice, innovative approach and their conduct. Tata Steels vision statement is now became a tangible asset, which provide right direction to their managers and employees. Tata Steel has highly skilled employee asset of 81,000 spread over five continents. Tata Steel stress on creating differential value for their customer with help of continuous improvement in their business process and product technology. Value Chain Analysis The value chain is an economic tool used to determine the strategic resources available to a company. Basic principle of the Value Chain Analysis is that the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firms disposal. To transform a short-run competitive advantage into a sustained competitive advantage requires that these resources are heterogeneous in nature and not perfectly mobile (Barney, 1991, p105-106; Peteraf, 1993, p180). Effectively, this translates into valuable resources that are neither perfectly imitable nor substitutable without great effort (Barney, 1991, p117). Tata Steel has few major strategic capabilities which are valuable, unique and non-substitutable. Tata Steels Strategic Capabilities Tata Steels strategic capabilities are presented in Table 3, below. Table 3 Resources Competences Threshold Capabilities Threshold Resources Threshold Competences Steel production plants at various geographical locations. Production and Sales management. Offices and buildings at various geographical locations. All other general management skills. Sufficient supply of raw materials for steel making. Sophisticated IT skills. Sufficient cash flow. Safety management. Pool of skilled personnel. Excellent customer service. IT System in place. Efficient management structure. Logistic, freight and shipment facilities. Effective employee welfare system. Capabilities for Competitive Advantage Unique Resources Unique Competences Varieties of products which caters to industries like Infrastructures, Automobiles, Aviation, Energy etc. Very competent sales team with high negotiation skills which create market for their products. Tata and Corus brands. Excellent use of IT systems for very effective use in sales process. Highly capable management team. Continuous developing and upgrading new products to serve different industry levels. Online portal Metal junction for buyers. Highly skilled managers and directors who improve and support the company success. A century experience in steel making. Integrated supplier and buyer management. Strong financial backing from group. Lowest cost steel producer in world. Very strong presence in India which is a big market for their products. Enterprise Risk Management (ERM) to eliminate risk associated with various processes. First mover advantage through innovative products processes. Continuous Improvement Process (CIP). Excellent RD for cutting edge technology and products. Operational efficiency and excellent quality control. Many proprietary products such as Tata Tiscon etc. Long-term relationship with buyers and suppliers. Porters Five Forces Analysis Tata Steel has registered double digit growth in past few years except their European business. By applying Porters Five Forces analysis principal, we can evaluate the Tata Steels market competitiveness and its current and future strategy towards intense competition faced at various fronts. Threat of New Entrants: Low Threat to new entrants in any industry sector is a major challenge. However in steel industry entry barrier is high hence threat of new entrants are relatively low based on factors such as huge capital investment, economies of scale, government policies and product differentiations. Steel industry requires huge capital investment to set up an integrated steel production facility plant which is currently close to US$ one billion/mtpa as per Steel Manufacturers Associations recent estimate. This deters any new entrants entering in this field. By increasing their production capacity to 50mtpa and wide variety of products they can lower their cost, hence more profit, sustainability and these conditions are unfavourable to any new entrants. Raw material is a major issue with corruption related to mining allocation and land acquisition, it makes difficult to new entrants to come in this field. Various regulatory clearance and environmental issues also pose big barriers to new entrants. Entry barriers in terms of product differentiation are very low in steel industry. Competitive Rivalry: High The steel industry is truly global in terms of competition with large steel producing countries like China significantly influencing global prices through their aggressive exports. In steel industry, branding is not very common hence little differentiation exists between their competing products. Tata Steel faces stiff competition with their competitors such as Arcelor Mittal, POSCO etc. Bargaining Power of Suppliers: High Tata Steel enjoys greater autonomy in raw materials supply as they own mines for raw material supply. Tata Steels fully integrated supply chain system keeps abundant supply of raw material for their plants. However, other steel producers, who dont have their own mines, have to rely on raw material suppliers. On global level raw material market is dominated by the three mining giants BHP Billiton, CVRD and Rio Tinto. They make mineral market as oligopolistic and supply two-thirds of the processed iron ore to steel producers hence command very high bargaining power. Other steel producers, who dont have their own mining operations, must buy raw material at market prevailing price and pass that hike to consumers which makes them less competitive. Threat of Substitute Products: Low New materials may pose threat to viability of steel. Aluminium, plastics and other composite materials are being considered as substitute in sectors like auto, aviation etc. Concrete is another substitute material that may pose threat to use of steel in infrastructure and energy sectors. Some of the substitute materials such as aluminium itself are very costly, hence doesnt pose very big threat against steel producers. However the growth led by infrastructure sector, automobile sector, aviation sector and consumable goods will keep demand up for steel hence more growth for Tata Steel. Bargaining Power of Buyers: Average Bargaining power of buyers is very limited due to their fragmentation. Big players of the major steel consumers in sectors such as auto, aviation, energy etc may squeeze greater amount of bargain. On the other hand these bulk consumers may offer long term procurement offer to the company hence more revenue generated. However, small and retail consumers are scattered, though they consume significant amount of steel production, dont have the same bargaining powers as in case of big players. Tata Steel Group SWOT Analysis SWOT analysis of any firm provides knowledge about the challenges and opportunities faced by Tata Steel group in future. They are detailed below. Strengths Tata Steel has acquired vast mineral reserves which is a key to their operations. These reserves can cater their raw material demand for next three decades. Tata Steels mineral reserves are located at various strategic geographical locations such as India, Australia, Canada, Mozambique, Oman, Ivory Coast etc. Tata Steel has very capable, credible and reliable top management. Their successful global expansion plan in last five years proved this. Tata Steel has successfully acquired and integrated Corus Europe, NatSteel Indonesia and Millennium Steel Thailand. Tata Steel uses custom made state of art integrated information management system for their routine operation. Their advanced RD capability has improved further by acquiring Corus which is world renowned for its product innovation. Tata Steel uses Tata Groups strong distribution and retail network. Its Groups demand for steel is very high due to their presence in most of the sectors. Currently Tata Steel produces 32 mpta of steel and by completion of DPCL project its total capacity will reach to 50mpta which will make it second biggest steel producer in world. Tata Steel has structured risk management process in place in their operation known as Enterprise Risk Management (ERM). ERMs key function is to identify risk at every level and mitigate the same. Tata Steel mitigates very well the cyclicality situation which occurs in steel industry occasionally by its broad spectrum of its product portfolio. Tata Steel expansion plan has consolidated its position worldwide and by diversifying its portfolio and market is in process to become a pioneer in steel industry. Tata Steel has very strong brand value for its products. This has strengthened further by acquiring Corus which itself is a big brand. Their successful integration with Corus was a benchmark in corporate history. Weakness Tata Steels substantial debt burden of US$9.8 billion is a major weakness. Their debt equity ratio is currently 1.77, which reflects company finances are met by debt due to Corus acquisition. Its European business (Corus) has a high exposure to spot price and a high operational gearing thus creating very high risk of price volatility. Tata Steel relies for some raw material on international suppliers, which expose their profitability in case of steep rise in their prices. Tata Steels Indian operation is very much hampered by lack of infrastructure, shortage in power supply, lesser productivity, bureaucratic hurdle in export etc. Additional levies and tax imposed by local government put them in less profit making situation. The subsidies provided by some nations (China etc) will make their product less competitive in price hence reduce their demand. Opportunities Currently the emerging economies are undergoing huge infrastructural developments, which require significant amount of steel in all sectors. In India the scope for expansion of its steel products are enormous in every sector, which Tata Steel can exploit very well with its increased production capacity. As per World Steel Association estimate, the consumption of steel will be doubled in next two decades. By Acquiring Corus and improving its own RD activities, Tata Steel moved towards a better product differentiation and enhanced product portfolio which provide them new opportunities over its competitors. Their geographical locations with integrated operations and marketing strategy are a key factor in capturing market share and increasing their financial performance. They can implement Coruss advanced automation technology in their own plants to improve productivity, economies of scale, cost reduction, increased output and operational efficiency to achieve better performance. Following recent recession, various assets (minerals, plants facilities etc.) are available at a very low price due to their financial difficulty. Tata Steel, with strong backing from its parent group can secure future supplies of raw materials for steel making. With increased steel production capacity of 50 mpta, they will be the second largest steel manufacturer after Arcelor Mittal and most geographically diversified company with wide variety of product mix. Threats Steel Industry is major source of greenhouse gas emission, which makes them very vulnerable against many litigation and legislation in future. The raw materials used in steel production are non-renewable and their source is depleting very fast. Due to rising cost of steel products, the end users are looking for substitutes of steel; which can be a major threat to Tata Steels business. Intense competition among international steel player and cheap steel available from China are another major threat to Tata Steels performance. Tata Steels huge debt is one of major threats against them. The rising interest will increase their debt burden. Future Outlook Following two years of worst global economic downturn, the world seems to be regaining some economic stability. There is moderate growth from developed world; however emerging economies are registering very strong and sustainable growth with robust domestic market. Before recession, the steel demand was very strong with over 6% growth during last decade; this is primarily driven by robust growth in BRICS nations (Brazil, Russia, India, China and South Africa), South East Asia and Middle East. By 2025, as per forecast BRICS countries will have 46% of global population and will consume 65% of the global production and will have three quarter of the global GDP. The raw materials for steel making are going at record due to high demand, higher freight rates and monopoly of three big natural resources companies. The effects of the above factors are reflected in higher steel price and decrease in profit margin of steel companies. However Tata Steels strategy adopted over last five years for securing long term contract for raw materials supply or acquiring new raw material mines at various geographical location has helped them to keep their prices competitive and making whole operation as viable. Tata Steels integration with Corus has completed successfully and producing better result than expected. Tata Steels strategic effort of capacity expansion and effort to secure raw materials source at various geographical locations yielding positive results. Tata Steels upstream integration process ambition will lead them to achieve 100% self-sufficiency in India and around 50% self-sufficiency in Europe in next 5 years. Tata Steel is investing heavily in RD to get breakthrough technologies and develop new products and services that reduce the production cost and environmental impact over the product lifecycle. To improve its processes, priority is given to energy conservation schemes; in technology break-through such as Ultra Low Carbon Steel making and in other innovative projects where the Group has proprietary technology. Conclusions It was the best of times, it was the worst of times, this famous quote meant a lot to Tata Steel. Five year back, just after starting of their ambitious global expansion plan, they were hit by worldwide financial tsunami which tested their resilience. Their well formulated and proved business strategy has shown resilience and ability to withstand the unprecedented highs and lows of a future that often comes unheralded. They have taken proactive initiative across all geographies to minimise aftermath shock of recession. Their strategy began to pay off towards the last quarter of year 2009, when they rebounded to profit after the turmoil of recession. Undeterred by the economic turbulence, the Company continued to place emphasis on working practices in health, safety and corporate citizenship, with specific initiatives taken in all these areas. In addition, a continued focus on engineering solutions for customers is helping it maintain its position of a product pioneer. Tata Steel believes in staying alert to future opportunities while never letting go of its core values. This is the philosophy that has underpinned its growth over the years and one that remains its key driving force. The strategy adopted by Tata Steel during last five years to become a global player paid off. They increased their revenue and production by six fold by capacity expansion or acquisition. They achieved raw material self-sufficiency of 50% by year 2010 and by year 2012 they aim to increase it to 60% by more investment in mines acquisition. In last five years Tata Steel became a global player from a local steel producer with currently global presence in 50 markets and manufacturing operations in 26 countries. Appendix A: Reference List Tata Steel Group Annual Report 2009-10 G Johnson, K Scholes R Whittington (2008), Exploring Corporate Strategy, 8th Edition Text Cases, Harlow: Financial Times Prentice Hall http://www.tatasteel.com Barney, J. 1991. Firm Resources and sustained competitive advantage, Journal of Management, 17 (1): pp99-120. Barney, J.1995. Looking inside for competitive advantage, Academy of Management Executive. 9(4). Pp49-61. Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view, Strategic Management Journal, 14 (3), 179-191 Porter, M.E. (2008). The five competitive forces that shape strategy, Harvard Business Review, January, 78-93. Porter, M.E. (1996). What is Strategy? Harvard Business Review, Nov-Dec, 61-78.

religions function in society Essay -- essays research papers

Religion has many functions within a society, both social and psychological. According to Ferraro (308) three such social functions are social control, conflict resolution, and intensifying group solidarity. Religion seems to help maintain a social order. It appears to do this by encouraging what a given society deems acceptable behavior and discouraging socially inappropriate behavior. â€Å"Every religion, regardless of the form it takes, is an ethical system that prescribes proper way of behaving.† (Ferraro 308) This social order of rewards and punishment is reinforced when backed by supernatural authority. Thus one’s neighbor may be exorcized from his or her community when a behavior is seen as socially unacceptable or inappropriate. Examples of this in the Jewish-Christian community would be the breaking of the Ten Commandments such as stealing, committing adultery, or murdering.   Ã‚  Ã‚  Ã‚  Ã‚  Another social function of religion is to â€Å"enable people to express their common identity in an emotionally charged environment† ( Ferraro 308). Group solidarity is intensified for those who practice it. When members of a religious group come together to practice religious beliefs, they often bond by participating in other non-religious activities as well. (Ferraro 308) People find religion an easy way to identify with one another. Religion helps to form community, schools, and even government. People who are ‘more’ religious tend to hold more conservative attitudes on sexuality and personal honesty. They are also likely to hold more conservative attitudes about family life, being more likely, for instance, to support the use of corporal   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Vaeth 2 punishment in disciplining children. Strongly religious people also tend to be more accepting and satisfied with their lives and marriages. This is perhaps because they do not question what is unknown. It is perhaps merely accepted upon faith. (Brinkerhoff, White, Ortega 295-305)   Ã‚  Ã‚  Ã‚  Ã‚  Religion also plays the role of reducing stress and frustrations that often lead to social conflict. (Ferra... ...d in a variety of religions.   Ã‚  Ã‚  Ã‚  Ã‚  Rituals are usually practiced within a group of people, many times forming a community such as a church. Going to service every Sunday is a ritual. Meeting a group of friends every Friday night after work for a drink is a ritual. Rituals are spiritual and nonspiritual, religious and magical.   Ã‚  Ã‚  Ã‚  Ã‚  The core elements of religion, belief, ritual, and myth bring people together just as much as they divide them into groups. Religion helps people find personal identity and fit into a community. Being divided into groups is not necessarily a bad thing. It is human nature. If mankind isn’t divisive over religion, it’s over politics, if not politics, then something else. In my perspective, it is not religion that creates the division; it’s the people. According to Ferraro, (322) â€Å"religion has played an important role in global social change through liberation theology (whereby Catholic priests and nuns work for social reform and justice for the poor) and religious nationalism (whereby religious beliefs are merged with government institutions).†   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚