Business Strategies Found in Asia Pacific and Its Future
Upon completion of this paper many avenues pertaining to business in Asia Pacific will be discussed. The nature of doing business in the region involves an understanding of many elements. These elements include the characteristics of the industrial and institutional environments of business there. There are many different business systems used in the region and knowledge of how these firms operate is important. How these firms operate with in a business system carries over and predicts a firm’s ability to compete. Its success and growth are directly related. It is also important for one to have an awareness of the differences in culture and how culture plays a huge role in doing business within the region. It is significant to assess the potential of this area as a collection of key markets and players within the global market. It is due to the advent of telecommunication and computer technologies that the global marketplace is rapidly shrinking. Globalization has sharpened competition. More than ever, it is imperative a corporation build an international presence to remain competitive. The Asia Pacific market has been at the tail end of benefiting from this new business tool. Therefore, the countries and areas of commerce are relatively untapped and a new world to take advantage of for future gain. Challenges exist such as: how to take advantage of new resources and how governments design and implement supportive policies and strategies. Also “Powerful factors are driving globalization: falling trade barriers; fast paced technological advances; declining communications and transport costs; international migration; and highly mobile investment” (Wignaraja, 2004). As a result, this is an extremely crucial character and will flourish as a new business mecca in the near future. It seems despite differences in business practices and cultures, the people in this region have embraced the new technologies in such a way to facilitate massive growth in a short timeframe. This is why focus on this region is so immensely significant.
This paper asks three questions pertaining to the Asia Pacific business climate and marketplace. First one was asked to choose two countries out of the nine Asia Pacific countries identified by Lasserre and Schutte and indicate how cultural differences between the two countries and Australia would mean adopting different methods of conducting business. This may mean changing the frame of reference but really it implies that an organization’s management must think outside the box and encourage innovative ideas. Creativity and embracing the notion of possibility are a must. Flexibility to change and openness to new experiences is needed in order to maintain a passionate level of understanding amongst co-workers from different cultures. The ability to communicate on multiple levels is what makes or breaks a company especially on the international scene.
Second, this paper presents a hypothetical situation. Your company has a joint venture that manufactures consumer consumable goods like soaps, detergents and other hygiene products out of the Philippines for marketing in China and Indonesia. There are many strategies and management techniques to consider for this situation. Keeping in mind, the explosion of telecommunications in the region and those two specific countries, it is extremely important to focus on an e-strategy that includes use of e-marketing and e-commerce as tools for using the Internet for advertising and promotions.
Third, this paper asks one to consider what the Asia Pacific market will look like by the year 2010 or five years from now. Which countries in the region will be the best markets for each of the following: (1) raw materials, (2) consumer consumables, (3) fast-moving consumer goods, (4) consumer durables and (5) luxury goods. These items are defined as discussed below. Raw materials include any natural resources the country may have that add value to its gross domestic product or GDP. Consumer consumables as mentioned earlier are products that a consumer uses and to be replaced. Fast-moving consumer good are popular and in high demand. These could be considered high tech like computers or cell phones. Consumer durable goods are products that last many years and do not need to be replaced instantly. Examples are the automobile, clothing and furniture. Luxury good are items of high value and cost. These items are usually purchased with disposable income. This products range from yachts, racecars, and cutting edge entertainment systems like plasma screen televisions or first class travel packages at Club Med. Analysts can forecast and predict how a market will flourish and what products will remain trendy over time and to which nationality of people. These forecasts can examine where these good and services will take place and what areas of a region stand to benefit from production for such goods. Analysts do this by looking at the current market and projecting how long a trend will remain or the likely hood of a trend permanently becoming enmeshed in the market. From the standpoint of management, focus on one product is futile and corporate suicide. Diversification is key for survival and maintaining a competitive edge especially in such a large market.
This paper will explore and examine these three questions as well as offer analysis. In many ways the concepts of culture, strategy and market forecast interact and rely on each other to facilitate the act of doing business. It is safe to assume they carry equal impact and each has an intricate function.
The Influence of Cultural Differences
As a leader in an international organization doing business in the Asia Pacific region knowledge of cultural differences and its influences is crucial for the sake of harmony, productivity and morale. A leader must be able to establish themselves within the structure of the existing culture and this requires understanding the differences in point-of-view and the essential needs of the employee and the customer. The leader must also establish clear communication of the organization’s objective and goals. Before entering a market like Asia Pacific, one must consider a well-defined strategy and be flexible to adopting new methods of doing business to meet environmental needs. Because of existing differences, a new framework is born. An organization needs strong, effective leadership to keep communication open while remaining respectful. For the purposes of this paper, China and Japan were chosen as two countries within the Asia Pacific to analyze in relation to how Australia interacts with them. This requires an understanding of Maslow’s Hierarchy of Needs as well as knowing the differences between high and low cultures. A look at what defines the cultures of Australia, China and Japan is also needed in order to see how existing cultural differences influence business practices.
According to E.T. Hall, all communication both verbal and nonverbal is contextually bound. What we pay attention to or do not attend to is largely a matter of cultural context. Cultures act as “selective screens” and can be divided into categories, low- and high-context. In low-context cultures, the majority of the information is explicitly communicated in the verbal message. In high-context cultures the information is embedded in the context of the relationship. High- and low-context cultures also differ in their definition of social and power hierarchies, relationships, work ethics, business practices, and also in time management. Examples of low-context cultures include: Scandinavian, German, Swiss and North American. In contrast, Mediterranean, Korean, Vietnamese, Japanese, Chinese, Middle Eastern, and Latin American cultures appear on the high end of the continuum. High- and low-context cultures differ in ways, which may create conflict when people from different cultures interact.
Maslow’s Hierarchy of Needs is simple in nature. David Hampton writes, “The central idea is that human needs are physiological, safety, love, esteem and self-actualization are arranged in hierarchy of prepotency. People are in state of want all the time. One is motivated mainly by the next level of unsatisfied need” (Hampton, 1987). This is because people have different needs and wants at different times, what motivates then changes. In general from a work perspective, the need to survive is fundamental, almost unspoken as a level of safety must be achieves before other needs can be met. This in itself acts a motivator because loss needs to be avoided. This idea of safety reinforces for the organization it first must practice establishing an environment familiar to the locals. In order for this, one must first know the specific needs of the culture as different areas value needs on the hierarchy in their own way. For instance, Hampton points out “for Japan love and safety needs seem to occupy a higher level than self-actualization” (Hampton, 1987). The opposite is found of China where a sense of belonging comes first in their culture. The theory illustrates its simple points but does not allow for multiple variations and the hierarchy demonstrates limitations because of this.
From need grows perception. Not only can one be perceived through words and actions but also body language. One’s preconceived notions can distort the simple act of communication. Hampton explains, “even the simplest perception is organized by the perceiver, the perceived characteristics of any part are a function of the whole to which it appears to belong” (Hampton 1987). When functioning on the international scale, it is easy to forget that multiple stimuli can obscure perception and other overall message. This creates miscommunication and problems.
An effective leader will take a chance at being uncomfortable to promote dialogue amongst people of different cultures. Leaders have the ability to influence, inspire and relate stories to their employees. This in turn creates an environment of trust and pride. Upon studying cultural relations, only then does one see the universal themes. The connection begins at a fundamental level of human sociology where the use of story is central. Howard Gardner reflects, “the ultimate impact of the leader depends most significantly on the particular story that he or she relates or embodies, and the receptions to that story on the part of the audiences” (Gardner, 1995). By telling stories, allows for a certain level of openness or vulnerability on the part of the leader and makes them human. By opening the line of communication, gives the employee knowledge of their environment and develops trust. The leader’s role is to sell the idea of commitment within a culture. Odiorne suggests, “if employees know what is expected, and what help and resources are available, they can then be relied upon to govern their actions to achieve the commitments they have made” (Odiorne, 1987). This sets the stage for goals and achieving high performance. The culture in turn feeds off this energy and excitement.
Across cultures there are varying definitions of leadership that have direct effect on business operations and strategy. Because of differing value systems augmenting the strategic plan is not unheard of but it is best in order to remain cost effective and on schedule that a company study its new environment before entry into the market.
Australia, out of three countries used for this study appears to have the most Western of influences. It many ways Australia remains mysterious and fascinating to outsiders because of its independent spirit and devil may care attitude. Maybe it is due to its history of being a former penal colony for England and its geographical location, that is has remained literally an island unto itself. Still Australia has based its way of existing and functioning in the world off the mother-daughter relationship it had with England. The structure of its government, laws and society are still influenced by the British way. It is interesting to see the British culture transplanted to such a diverse place. It is this influence that makes Australia a low context culture. They value open communication and a free flow of thoughts.
China is considered a collective due its communist framework and therefore has vastly different values from Australia and Japan. “In part, this was due to the collectivist tradition and the socialist ideology which both emphasized non-individualist gains” (Benson, 1998). Because of communism, Chinese believe everyone is to be treated the same. This limits the amount of freedoms one can experience and creates an oppressive atmosphere. This has contributes to China being isolated from much of the Western world until recently. John Benson explains, “China is a country whose existing practices and socio-economic background are far removed for advanced economics in terms of the political system, the concept of private ownership and the role of trade unions” (Benson, 1998). This creates barriers to entry because an organization must follow the host country’s laws and regulations. This can be costly and time consuming. This is slowly changing, as technology becomes a part of the infrastructure and outside governing forces like the United Nations influence change of labor practices.
As a result of this collective social structure, the Chinese have different needs. They are not individual but team oriented. They have not been exposed to Western labor concepts like benefits and incentives. They are content to work for the sake of working and living. Benson writes, “Teamwork allows workers to regain autonomy and responsibility for their own work. This method is also cost effective and fewer middle managers are needed” (Benson, 1998). As a result of such teamwork, it can be confusing to an outsider to tell who is the decision maker and who should be approached for dialogue. In this respect, it is imperative one study the situation in a detailed manner but also keep an open mind as the player may change. Also because many Western systems are based on individual performance, for a country like China, new methods are needed. Instead of reviewing everyone separately, a team evaluation will be needed. Motivation and repercussions of bad work should also be communicated at a team level to have the greatest impact.
Japan’s society is based on feudalism or the shogunate period where the people were dependent on the warrior class. As a result, the Japanese do not have much independent spirit like their Australian counterparts. Throughout Japan’s modern times, the Japanese have developed their own definition of leadership that has a direct relationship on business practice. Mark Fritz explains, “leadership is the ability to articulate visions and goals to make the members of an organization contribute and cooperate spontaneously” (Fritz, 2003). This element of egalitarianism impedes the development of Japanese personality and this makes it difficult for an outsider to have the ability to create passionate leadership. This may make it harder to identify the decision maker unless one has knowledge of the Japanese leadership structure. The followers are placed in a situation of high expectation where karoushi (death from overwork) is not unusual. The leadership is male and age dominant where marriage is a factor for climbing the ladder. It creates a symbol of maturity, responsibility and integrity. The Japanese businessman is also expected to participate in corporate entertainment like karaoke. It is also a plus if he is fluent in English and has an MBA (Fritz, 2003).
These factors can influence the smooth operation of a multi-national corporation and cause problems of culture understanding if management is not carefully selected. It is sexiest to say but hiring a young single woman would be an obstacle in this area. A Western person also needs to adapt their way of communicating which is not loud or participate in open dialogue. Japanese conservation tends to be one-sided. Fritz compares the difference in dialogue as “communication in Japan is said to be like bowling as it tends to be in one direction. There are spectators around without much involvement. Communication in the West is like playing tennis — the players mutually send and receive the ball” (Fritz, 2003). If an organization can instill loyalty and patient capital in the employee, as Lasserre and Schutte identify “the two most integral elements of business for Japanese leaders” (Lasserre and Schutte, 1999) then they have become a part of the collective. By simulating that of the high-culture and introducing elements of the collective, this changes the attitude of the Japanese worker. In a sense, all workers become a part of the organizational collective culture. A Westerner should keep this in mind as to promote a smooth transition, continue striving toward reaching goals and exceed needs and expectations.
Joint Venture and Strategy
This paper presents a hypothetical situation. Your company has a joint venture that manufactures consumer consumable goods like soaps, detergents and other hygiene products out of the Philippines for marketing in China and Indonesia. There are many strategies and management techniques to consider for this situation. Keeping in mind, the explosion of telecommunications in the region and those two specific countries, it is extremely important to focus on an e-strategy that includes use of e-marketing and e-commerce as tools for using the Internet for advertising and promotions.
Overall it has been a business practice to remain conservative when it comes to strategy. Every move made by a company is well researched and calculated. As a result, any opportunity to focus on markets outside the United States has remained as a joint venture only. Within the global market, there are higher standards set by foreign buyers. A proactive foreign investment strategy in the form of joint venture emphasizes the targeting of a few sectors and host countries, overseas promotion offices as public-private partnerships, competitive investment incentives and radically streamlined investment approval processes. Our organization called New England Old Soap Company has chosen this format of entry because it minimizes the risk involved for the company. Also as a joint venture the company also limits its involvement with the joint venture’s operations. For an example, Acme Soap Suds before our interaction with them was a completely owned and operated Chinese company located outside of Beijing. As a joint venture, our company has money and interests invested in the global success but our company does not own Acme. As a result of the joint venture, Acme also benefits from this agreement, as they have been able to expand their factory locations to the Philippines.
Until the joint venture, they had not ventured outside of China due to trade barriers and other political laws. With the advent of new labor laws in China, the company had been looking to partner up with another soap producer to gain a global presence. Having a larger factory in the Philippines allows the joint venture to take advantage of the country’s natural resources such as its cheap labor force. They are willing to work harder and faster than Acme’s Chinese workers. This allows the joint venture to save money to be invested in other areas of the company such as research and development for diversification of the product line. Utilizing the local workforce not only saves time and money but also stimulates the local economy by creating new jobs and consumer spending. Much of its operations remain intact from the beginning and many of its employees have stayed on. Another feature of the joint venture is that our company benefits because it gets to be involved on the global scale but does not have to deal with the politics, law and tax issues other ways of entry may have. New England Old Soap Company or NEOSC still has a great say in the operations of this venture and in fact have managing directors on site to assist in everyday issues but should the venture turn sour, the loss will not cripple the company. This venture has been successful in introducing NEOSC to the world market of consumer consumables.
Many discoveries have been made as a result of market research. The best approach to the largest segment of the market, means a company must remain focused on the customer. Use of integrated marketing communication or IMC should be used to achieve this goal. IMC as a concept encompasses the use of tools like advertising, public relations and direct marketing in different types of media (Tri-Media, 2005). Pacific Asia is the second largest market in the world and consumer growth is expected for the future. This is because as disposable income growth drives greater consumption of consumer goods, especially non-durables, which in turn drives demand for packaging. As emerging nations in the region recover from the Tsunami tragedy but also grow wealthier over the next five years, they will adopt Western lifestyle tendencies, demand for packaging will rise steadily. Table 1 below illustrates the relationship between consumer spending and growth for the global market. Changing consumer demand (associated with rising incomes and changing tastes) for more sophisticated, customized and environmentally friendly products places new demands on Acme and NEOSC.
SPENDING in 2001
%GROWTH in 2002 (est)
Table 1: Consumer Spending and Growth. (Food and Drug Packaging Data Watch. 1 May 2002.)
The plan from NEOSC’s point-of-view was to allow the joint venture’s interest in the Philippines factory to act as a production plant for the Oceanic region. Executives have discovered through close study of demographics that China and Indonesia are the most open markets to penetrate with the joint venture’s new e-marketing strategy. In a cross cultural corporation like ours that has many different divisions, one would think each separate area has its own approach to marketing its own unique product. This is not effective management technique. For the sake of cutting expenses and manpower, our company has chosen to have one central marketing division that will use multiple outlets spreading the word about our soap. From the standpoint of creating leads for sales within larger chain stores like Wal-Mart, marketing is focused on direct marketing. Direct marketing at this level involves mailing flyers or postcards to potential buyers but also running advertisements to public weekly. It also falls under e-marketing as sending email postcards as well. Another factor that our business must consider at all times regarding marketing strategies is the legal public relations parameters in which joint venture must do business in the two demographics. We must keep in mind the different laws and parameters that may apply to promotions and advertising in those area. Also we must have a clear understanding of consumer rights within the new medium of email and the Internet. If a marketing strategy is presented to the public incorrectly, there are very costly with public ramifications such as lawsuits and loss of brand name integrity. The joint venture benefits from strict compliance of marketing techniques because they protect its image.
Introducing an e-strategy to an organization unfamiliar with such a concept or unwillingly flexible to change can be a challenge and take time to implement. This process is not a transformation overnight but more of an evolutionary process. The implementation will need to be done on a step-by-step basis at a detailed level as to save money and time. There is not much room for a mistake or misunderstanding of the plan put in place as they can be costly and create resistance to change. Therefore it must be decided by management what the exact goals are for this strategy. Are they long-term or short-term? What are the expectations for the organization? What do they hope to gain? It is believed that by introducing a new company wide computer system, this will reduce inefficiency for customer orders, automate tracking of inventory and encourage communications across the company. These are positive outcomes that have a direct relationship with operating costs. By having the tools to promote these activities within the store, creates a uniform way of doing business and maintains the company’s image and identity to the public. By promoting these functions, will aid in reducing overall costs of operation, therefore, allowing the company to invest those funds back into the project or later when the project is completed into other company interests such as acquisition of new stores. By introducing a new computer system and an integrated tracking format for customer orders both in store and online, makes the management of supple easier for the employees. This type of automation may require outside sourcing to an independent IT company as to avoid continued cost involved with maintaining such a system. This reduces costs of hiring new employees and training of existing staff. Developing economies like China and Indonesia hold out hope that information and communication technology will deliver tangible improvements in their standard of living. John Gillies writes, “it is important national e-trade strategies contribute to economic performance and social justice” (Gillies, 2003). A competitive strategy, “tailor made to national circumstances has a major influence on the creation of business competitiveness” (Wignaraja, 2004) or in other words by promoting a close-knit active business-government partnership is the key to a well-managed competitive strategy for management to implement.
In today’s global marketplace, it is necessary to introduce the concepts of e-Business and e-Commerce for a company to survive the competition. Factors like: flexibility, creativity, openness to use of technology and innovations, communication across the organization and talented employees are a must for competitive advantage. This paper asked one to consider the scenario of the joint venture in regards to the implementation of e-Business. These paragraphs explored the joint venture entry as an organization ready for e-Business and the tools needed to implement this type of strategy or e-Strategy. The joint venture of Acme and New England Old Soap Company are at a point in its development where it should take advantage of technologies. This will make the cost and time spent doing business less and add a competitive edge if the plan should be implemented.
The Future of the Asia Pacific Market
This paper asks one to consider what the Asia Pacific market will look like by the year 2010 or five years from now. Which countries in the region will be the best markets for each of the following: (1) raw materials, (2) consumer consumables, (3) fast-moving consumer goods, (4) consumer durables and (5) luxury goods. One can forecast the future of market trends by looking at present trends. For the Asia Pacific market, as the second largest economy in the world, the sky is the limit for any company or product with a desire for globalization. The following paragraphs examine which countries within Asia Pacific will flourish because of the presence of certain goods. In general over the next five years, it is expected that Southeast Asia will outperform markets in North Asia except for China.
Raw Materials/Consumer Consumables
Asia is home to the world’s largest consumer base and the greatest number of farmers. Use of technology in the form of biogenetics is expected to bloom into major industry over the next ten years. Even present safety issues with genetically modified foods or genetically modified foods will not stop this product from exploding into this arena. “It is safe to eat, safe to grow and the only way to feed growing populations with these new varieties of rice, soybeans, and corn” (Asia Holds the Key to the Future of GM Food, 2005). In this respect, the business people of Asia have recognized the need to take advantage of this new technology in order to profit. Also it is vital to the future of the world population that scientists and businesses work together to explore new avenues of feeding the world. China has recognized the need to be at the forefront of this new industry utilizing present raw materials only to augment them scientifically and present them to market in the forms of consumer consumables not only food but also other products. Companies in countries like China stand to profit from this type of production because they can diversify the product line. “China claims to have developed the world’s first genetically modified wheat in 1990, is now running ten GM rice field trials and has become the world’s largest importer of GM soybeans” (Asia Holds the Key to the Future of GM Food, 2005). However, there has been some concern over proper labeling and preparation of genetically modified foods for public consumption. Over the next five years, China will over take the American market and export to nations without strict regulations. It is expected the Chinese market for this industry will employee 20,000 more people in 200 labs across the countryside. This aligns China to be unique within this industry of biotechnology as a modest niche.
India and Indonesia are quickly on the tail of China and are “hopeful the new crops can feed burgeoning populations and produce pest free crops” (Asia Holds the Key to the Future of GM Food, 2005). Slowly both countries are easing into the technology of planting GM cotton. This in turn can be produced into other durable goods like clothes and house goods. A country that does not stand to profit from genetically modified foods is Japan. Japan is the world’s largest importer of food and a huge potential market for GM products. It is believed that such biotechnology will aid in fighting global warming. Still countries like Japan that need food, have tough government procedures for application approval and labeling laws. It is still somewhat more flexible than that of the European Union. “While a product in Europe must be labeled if more than .9% of its ingredients are from GM sources, Japan has set the bar at 5%” (Asia Holds the Key to the Future of GM Food, 2005). Other countries like South Korea and Thailand are quickly also setting their guidelines which makes these products more appealing on the market. It is believed as long as consumers are aware of the ingredients; there is no problem with genetically modified foods becoming more popular in the future. The hunger of the world population depends upon it. Businesses that realize the potential of such a variety of products ranging from wheat to cotton pants, will not only profit and grow incredibly but also aid the world’s problems.
Fast-moving Consumer Goods/Consumer Durables
The Asia-Pacific region is home not only to the world’s largest but also most sophisticated Information and Communication Technologies or (ICT) markets. The region leads the world in terms of next generation mobile technologies and broadband access and encompasses a number of emerging markets, which are experiencing rapid telecoms growth and offer considerable potential. Cell phones and Internet connections account for 83% total of the region’s fast-moving goods (Asia Leading the Future, 2005). Some of these products are meant to last over a year and can be considered durable. It has only been since the new millennium this region has experienced such an explosion and demand for these goods. In the next five years “Asia will look at the key areas influencing and driving this dynamic region’s ICT growth such as how to build upon the first 1 billion ICT users in the region to reach the second billion” (Asia Leading the Future, 2005). In order to reach this goal, Asian countries like China and Malaysia must utilize all technologies available and have the open mind to create new innovations. This factor is contingent on governments cooperating and making business practices easier to function effectively. It is important that companies keep an open relationship with such governments to flourish.
It is with these new technologies that globalization will affect even the most rural of areas, bringing the Internet and electronic media to every person in the region. This will require improvements in broadband technology. Such countries like North Korea, Singapore and Hong Kong are eager to embrace this and make it available to every home and this will open a new area of expertise for companies to profit. The idea of service and even customer service is a difficult concept to make tangible. Still in order for ICT and broadband to grow in the region, such services must be available. This will result in new telecommunication architecture and an infrastructure to support the region.
This new architecture will promote a future for the next generation of cell phone technology. Other content services will be available and advance over the next five years. Such services like online games and video conferencing will be added to the cell phone to make the product more durable.
Luxury items are considered any goods that are extra and not essential to everyday life. Currently the Asia Pacific region is exploding with media outlets such as television programming, Internet media, movies and music. These goods are sold in the form of CD’s, DVD’s and web site content pages. In Japan, whose population is over 130 million and “ranks as one of the wealthiest countries in the world,” (Paynich, 2003) shopping television is the entire craze. The direct response TV infomercial industry is booming for this country. “TV shopping has been in Japan for a decade as opposed to the United States, which has flourished in live TV shopping for the past 25 years. Although TV shopping is relatively new to Japan, it is a burgeoning [yen] 200 billion market” (Paynich, 2003). The business is prospering and as a result, television stations are competing for airtime and paying greatly for exposure. In many ways, this emerging media has taken off too quickly because Japan does not have many media outlets unlike the United States that has cable and satellite. In order for this new media to continue to grow and profit, it is important that Japanese companies work with the government to open up control of the airwaves to provide multiple options for consumers. This investment will be great but in the long run, pay off for the better. Other countries like the region will follow suit. The only exception would be Australia and New Zealand as those markets “are not far removed from the North American market” (Paynich, 2003). This makes it easier from Western companies to enter this region via Australia because of the similarities of the markets. The country even has an equivalent to the FTC. Marketers comment and find “Australia an exceptionally easy market to penetrate. We’ve got extremely good relationships with the companies there. And because of the fact that there is not a lot of translation necessarily for your product, it’s really easy to get it there” (Paynich, 2003). Still the market is not great and American companies have leapt into the market with less than favorable results.
It seems that is it the country of India that is benefiting the most from this media frenzy. Michael Wolf writes in the Times of India about the Entertainment Economy, professionals in India may finally be ready to agree that there’s no business like show business. That is because their employers are telling them to take a hike and they are loving it. Advertising, television and print media professionals are set to get a 15.4 per cent salary hike in 2005, according to a survey by HR consulting firm Hewitt Associates (Highest Pay Hike for Indians, 2005). That means a long-established trend is likely to be bucked, with the IT sector, reigning champ for the last five years, relinquishing its title as the most generous when it comes to pay increases. “There’s been a lot of activity in the entertainment, communications and publications sector in the last few years. Lots of FDI is expected to pour in. Besides, single-owner firms are increasingly turning professional,”(Highest Pay Hike for Indians, 2005) explains the current focus on the film industry. This is not to say that India is not flourishing from the IT industry and the prevalence of outsourcing from American companies. Many international organizations have seen the need to utilize India’s immense workforce to cut costs and increase not only profitability but also increase efficiency.
Overall the Asian economy remains in the spotlight on the global stage and has “emerged as a significant driver of global growth and inflation” (Chitsomboon, 2005). China and India will act as significant drivers in the Pacific Rim region. The average consumption growth in Asia between 2004 and 2005 lies somewhere between 5.7% to 6%. It is expected that these numbers will double within two years as the market recovers from external factors like the Tsunami. Construction of hard hit areas especially in Thailand will stimulate growth for the region (Chitsomboon, 2005). It is important that area governments work to rebuild customer confidence in tourism and travel. Still it is likely the Asian market will be hugely driven by United States consumers as they continue to purchase high ticket items and new technologies flourish. There is a high demand for such luxury items in the United States while Southeast Asian countries fall in second.
This paper explored and examined these three questions as well as offered analysis. In many ways the concepts of culture, strategy and market forecast interact and rely on each other to facilitate the act of doing business. It is safe to assume they carry equal impact and each has an intricate function.
It can be argued that multi-national corporations are change agents, which bring new technology and new management techniques to all corners of the world. This may be seen as a negative for those that desire to preserve cultural identity. It is believed that with understanding a new global culture can be adopted by organizations and people worldwide. To respond effectively to the demanding global environment and remain competitive, firms need to develop a range of capabilities in the areas of technology, marketing, management, human resources and finance and continuously create innovation over time. This allows an organization to not only have a global presence but to also survive.
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