InternationalManagement_MNG00313_assignment2.doc

southern cross universitystudent name:tai yat wahstudent id no.:21752874 (scu)/30907005(hkit)unit name:international managementunit code:mng00313tutors name:ms jean leeassignment no.:assignment 2assignment title:case study -robert bosch australia pty ltddue date:27th april, 2012date submitted:26th april, 2012declaration:i have read and understand the rules relating to awards (rule 3.17) as contained in the university handbook. i understand the penalties that apply for plagiarism and agree to be bound by these rules. the work i am submitting electronically is entirely my own work. signed: (please type your name)tai yat wahdate:26th april, 20121. what were the various external and internal factors that impacted on rbaus internationalization process? there are several external and internal factors that impacted on rbaus inter internationalization process and will be illustrated by using the aid of swot analysis respectively in the following sections. according to swot analysis, external factors are opportunity and threat while internal factors are strength and weakness (davis (2000) p.112-124). for external factors first, i find out that the threats are governments policy, competitors and low loyalty of customers. first of all, the local governments policies have posed a great impact on the whole domestic automotive industry. according to the case, for example, the australian government has decided to reform the domestic automotive industry and made the import tariffs decreased more than 25% (davis (2000) p.118). additionally, because of the reduction of the level of tariffs in the local automotive industry, this offers an opportunity for competitors to enter the market. as we all know, the fiercer competitors are, the more competitive the domestic environment is. it has posed a great threat as competitors are offering high potential products or services to the local market (davis (2000) p.119). at the same time, the customers and clients that buy an organizations products or services. for instance, the existing clients of the company may choose to leave as there is a better choice for them. this results in the closure of nissan australia on the grounds that rbau was unable to compete in the new competitive environment. it is thus makes rbau loss of 30% market share as well. although this had an immediate impact on the companys domestic growth, it also creates an opportunity for rbau to consider internationalizing. the objective of internationalizing its business was to expand rbaus economics of scale and scope. on the other hand, for the internal factors, the strength of rbau namely are the high competence of its research development team, a highly skilled and motivated multicultural workforce and high-tech manufacturing. according to the case, for instance, rbau had a workforce of almost two thousand employees. besides that, the company employed more than two hundred engineers and fifty people working at foreign research department which located in germany. it is obvious that the manpower is really powerful as it is one of subsidiaries of bosch in australia. whats more, it is unbelievable that its high-tech manufacturing ability is much higher than the parent company bosch. for example, when nassar, ceo of ford walked into bosch and asked for the parent company to manufacture and supply a vehicle security. initially, bosch rejected as a result of being unable to develop such high-tech system. however, this was not a problem for rbau. the internal factor of rbau is the weakness that development of the company was constrained by its role within the bosch global network as well as the authority to operate outside of the australian domestic market was limited (davis (2000) p.122). for instance, rbau cannot decide which markets to export and exports products to overseas clients must get the parent company boschs consent before implementation. and the culture is different when it shifts its business from domestic market to the new market in germany. the personnel who are working in germany must get along with its culture.in short, rbau is a highly competitive and potential if the company freely internationalizes its business. in this case, both internal and external factors pose different level extent influences on rbaus internationalization process. 2. how does the control and coordination at bosch head office impact on the growth potential of rbau? the control and coordination at bosch head office has a great impact on the potential growth of rbau. i would like to illustrate how these factors affect its growth via analysis the control and coordination provided by bosch respectively. for the control perspective, we can see that control belongs to centralization (shuja, s m (2001) p.245). for example, the control from bosch is centralized and this results in the limited authority of its subsidiary rbau. although rbau is a highly competitive and potential if the company can freely internationalize its business, the parent company bosch still holds its control tight. rbau had to ask for permission first before internationalizing its business and was constrained to decide which markets to export its products. in addition, the transfer pricing policies were set by bosch in germany. moreover, when rbau became an exporter of vehicle security systems to a major european car manufacturer, the boschs headquarters started to place restraints on the expansion of rbau on the grounds of posing a threat to its powerful position within the bosch global network. it creates the barriers and difficulties for rbau to expand its business in germany. when it comes to the operations coordination perspective, although rbau could choose the cost and customer price, and advertise its market freely in the initial stage, only to provide the vehicle security to boschs germanys headquarters. bosch would then sell the system on to european customers as if it was its own product. this arrangement of this decision did not negotiate with its subsidiary rbau before. until rbau suggested that manufactured and exported vehicle security systems in the name of the bosch group, then the company was allowed to maintain control and coordination of the products. obviously, the coordination between rbau and bosch is low because of the centralized system of the whole organization. furthermore, it is commonly believed that rbau was a great brand and built a good reputation in the automobile industry in germany (mcconnellogue, c. 2007 p.7). everyone in germany knows that rbau is a great quality product. the loyal consumers may be felt disappointed to the products that were using the name of bosch as the perception of the quality of rbau they used previously must be great and high-tech while bosch were not. but now was changed. consumers may suspicious about that weather the quality of bosch is the same with rbau (churchill (2006) p.28). this affects its sales eventually. what is more, the morale of the staff of rbau must be low and difficult to be motivated to achieve boschs objectives. this is because their previous great efforts on the brand of rbau was ignored and under the undemocratic situations. those staff was also indirectly discouraged and become less committed to develop new products.from the above mentioned examples and potential problems aroused, we could see that control and coordination poses an enormous impact on the growth of rbau. 3a. is what way did good luck play a part in the international success of rbau? in my opinion, it is absolutely not because of good luck. rbau was successful in the internalization business. the reasons behind that were shown in the following: first of all, rbau a successful organization as it is an adoptive and entrepreneurial organization (davis (2000) p.106). for example, rbau realized that the level of import tariff has been gradually reduced by the government so that the domestic legal environment has been changed in australia and that change posed a great threat on the companys growth. owing to having the highly skilled manpower and research team, rbau tried to internationalize its vehicle security systems in order to expand the companys economies of scale and scope. undoubtedly, the company succeeded. moreover, the desire for change for this kind of organization is high (shuja, s m (2001) p.209). take rbau as an example, the company was willing to change during the international process. initially, rbau was a great success in the supply vehicle security systems to a major european car manufacturer. then the company boschs headquarters placed restrictions on the expansion of rbaus strategies for internationalization as the company displace its image as a technology leader in germany. however, rbau figured out a way and negotiated with the companys headquarters. at last, it comes to an agreement that rbau could manufacture and export vehicle security system in the name of the bosch group. from this situation, we can see that the culture of bosch is willing to change all the times.furthermore, the key to success is focus and innovation. in the case, we could see that rbau specialized and focused on manufacturing and supplying single vehicle security system during the internationalization process. additionally, the company had a high caliber research and development team in germany plus was willing to invest the research team. therefore, rbau was good at understanding what the local markets needs, and develop the most innovative and high-tech security system to its target clients while its parent company bosch could not. because of focus and innovation, the products meet the clients needs. apart from that, flexibility accounts for the reason why rbau succeeds (davis (2000) p.96). according to the case, rbau was willing to accommodate low volume orders. the company also willing to support crash programs that had short deadlines and required strong cross-functional teamwork etc. in short, rbau offer the flexibility to its clients and does while others do not. the last critical point makes rbau succeed is the effective cross-functional development of products. for instance, the ceo of ford europe, jac nassar, asked the parent company bosch to develop a high-tech security system. but bosch refused to do so as it did not have the expertise to comply within the timeline specified. and if operated in divisions, that made cross-functional development of products difficult. on the other hand, however, this was not a problem for rbau because the company had all its subdivisions located at one large production plant in melbourne in australia. rbau thus can develop, manufacture and even import overseas products effectively and efficiently as so to response instant needs of its clients.3b. does this mean strategic planning is a waste of time? why?no, it does not mean strategic planning is a waste of time. apparently, strategic planning is a waste of time but it does not. first, strategic planning is significantly important to the growth of an organization (shuja, s m (2001) p.105). strategic planning helps determine where an organization is going over in the coming year and how it is going to get there. additionally, the functional of planning such as setting goals and figure out the internal factors and external factors will be happened and how to solve difficulties when there are barriers are crucial to organizational survival. for example, rbau have done a lot of considerations before implementing the internalization because the company understood that it had limited authority to decide which markets to export, and there might be have a conflict with bosch if doing so. therefore, rbau had comprehensive e