Regionalization
Write a report on simcao and its regionalisation and economic issues and i need less introduction about the company and more about its regionalisation and its economic issues.
The report talks about regionalization strategy on a broad level. It highlights what regionalization means and how it enables a company to function. It gives ideas that how a company should work and achieve its target. It draws the example of an Australian company named Simcoa that provides silicon to the customers worldwide. The report also gives recommended strategies that generally provide a support to the issues raised in the companies. It talks about the economic issues focusing on GDP, Net Profit, Per Capita Income, etc. of the company. More detail of the task has been detailed below.
Simcoa is an Australian Company that deals in producing silicon to meet the customer’s requirements. Silicon is considered as one of the largest producing product to meet the Australian demand (Simcoa, 2018). The report therefore focuses on how Simcoa manages to run its business with the help of regionalization strategy developed by its professionals. It suggests ways to overcome the problems faced by Simcoa in business sector. The paper also discusses the economic issues faced in Simcoa by its workers which ultimately results in affecting or developing their growth. The economic issues will highlight the factors of business operation.
Regionalization means focusing on a particular location for business related work. Regionalization is considered to be a business strategy that helps the companies in working effectively by dividing the employees with different tasks. The companies under regionalization work on one region before operating on the other. The strategy of regionalization follows financing, marketing, managing and all the aspects that involve business (Van Langenhove, 2016). The area for which the company works is divided into many small segments and those segments are called regions under which each and every employee is assigned to perform its activity. The strategy of regionalization is an effective approach that a company must adapt in its business place. Regionalization is a method to cater the needs of each and every part of the company. It helps in facilitating the growth of business by covering all the issues and providing a strategy to make the business run on a large platform. The company has been able to achieve its target by showcasing this effective strategy that can control the organization by splitting the regions and assigning the work for every region to the individual workers. It is a common strategy that each and every company follows (Shiryaev, Litvinenko, Rubtsova, Kolpak, Blaginin & Zakharova, 2016). This is an appropriate method of working in the company by serving every part of the country separately. It gives the company a chance to serve more and more people from each and every region. The strategy has made it easy for the companies to develop its reputation in the market. It gives them a chance to meet number of customers and provide them with better facilities and services. The strategy is planned by the professionals depending upon the population of the country (Lee & Gereffi, 2015). They take care about the information and plan the strategy in a well planned manner. Regionalization is an approach that provides greater opportunities to the companies and suggests ways to accomplish their target. The strategy is widely known in the business sector as it helps in making the business operations function. Hence regionalization is said to an effective approach in making the business operations easy and effective. It gives the company an opportunity to create a satisfactory environment to the employees also (Shaw, 2013).
Regionalization and Economic Issues
The economic development of the company depends upon the amount of profit a company earns. Regionalization is strategic phenomena that enable the company to attain its goals effectively and efficiently. It makes the working of the system easy yet company faces many economic issues. The economic issues faced by the company can include increase in the exchange rate in the importing and exporting the goods and services from other developed countries. Australia being a developed country goes through the problem of economic issue by exporting fewer amounts of materials if its exchange rate decreases. This is generally faced by Simcoa and is a reason of issues rising due to the decrease in economic exchange rate (Elango & R. Wieland, 2014).
The other problem that the companies like Simcoa face includes the problem of interest rate. The producers who maintaining the export and imports of business can imply higher interest rates for the services they give to its customers and other big firms that it can become difficult for the company to pay the required amount (Kotabe & Helsen, 2014). This leads to the economic issue for the company as paying for the goods at higher interest rate turns out to be a difficult problem for the organization. This issue gives rise to other economic issues like decrease in the Net Profit of the company, increase in the demand for the materials by the customers, decrease in supply, etc.
The material used by Simcoa becomes a factor of economic crises when the importer charges higher prices for them. This disables the company to buy further goods at such a price which leads to decrease in the net profit of the company (Kolk, Lindeque & Buuse, 2014). The net profit is the annual income of the company earned in the form of profits. These profits of the company that are generated at the end of the year tell about the position on which the company stands. If the company seeks for profits and attains it, this shows that it has a got good amount of supply in the respective year (Munoz, 2013).
The economic issues like inflation and deflation is also faced by the company due to the increase and decrease in the prize of the community (Lampel & Giachetti, 2013). When the prize rises the company faces the problem of deflation in the business raised by the market and when the company sees the problem of inflation it means that it has faced decrease in the prize value of the commodity. For example, if the prices of the manufacturing product by Simcoa rises it will become difficult for them to sell the product, this will create decrease in the profits earned by the company, whereas, if the prize of the commodity of Simcoa decreases the company is unable to make the amount of profits that it targets as per the quantity (Masteikiene & Venckuviene, 2015).
Recommendations
In order to solve such economic issues the suggested recommendations can be beneficial for the company:
Simcoa can hire qualified employees who are capable in managing the business with proper strategy. This will help in making the proper growth for the business by focusing on the operation keeping in mind the economic issues that can be a hurdle and issue for the firm. The qualified employees are the professionals who know how to work by following the norms of the business properly (Stroeva, Sibirskaya, Khokhlova & Oveshnikova, 2014).
In order to maintain the proper interest rate it is recommended that company must tie up with its exporters and importers by managing their relationship positively. If Simcoa will maintain its contacts it will become easy to import and export its trade. This will become beneficial for them to attain resources on a required amount of interest. The good relationships can help Simcoa to negotiate to the importers on their own prices (Lim, 2016).
To avoid the cause of inflation and deflation, it can be suggested that the market should follow strategies for not letting the business face such problems by adapting ways to maintain stability in the market. At the time of inflation, central bank of Australia can increase the bank rate. This will make the commercial banks to lend fewer loans to the borrowers and therefore can circulate more and more money in the market. At the time of deflation, the bank can decrease the rate at which it provides the loan to the public and therefore it will increase their purchasing power. Therefore, it can become beneficial for the company to invest in the market by taking loans from the banks than from its borrowers (Ghobadian, Rugman & Tung, 2014).
The company can adapt qualitative measures which will help them to tackle the problems raised in exchange rates, interest rates, and other economic terms.
Conclusion
On the above mentioned limelight event, it has been concluded that Simcoa manages and operates its business even after failing due to the economic issues. It shows the areas which disable the company to growth and attain its target due to the economic issues like rising interest rates, the problems caused by inflation and deflation, issues on the amount of rates charged on exchange, etc. it provides the recommendations that can help the company to overcome these issues. Every organization faces the problem caused due to the factors of economy. In order to avoid these issues it important for the organization to follow the regionalization strategy effectively
References
Elango, B., & R. Wieland, J. (2014). How much does region affect performance?. Multinational Business Review, 22(1), 4-14.
Ghobadian, A., Rugman, A. M., & Tung, R. L. (2014). Strategies for firm globalization and regionalization. British Journal of Management, 25(S1).
Kolk, A., Lindeque, J., & Buuse, D. (2014). Regionalization strategies of European Union electric utilities. British Journal of Management, 25(S1).
Kotabe, M., & Helsen, K. (2014). Global marketing management.
Lampel, J., & Giachetti, C. (2013). International diversification of manufacturing operations: Performance implications and moderating forces. Journal of Operations Management, 31(4), 213-227.
Lee, J., & Gereffi, G. (2015). Global value chains, rising power firms and economic and social upgrading. Critical perspectives on international business, 11(3/4), 319-339.
Lim, G. (2016). The role of ethnic Chinese business networks in the regionalization strategy of Singaporean fish farming firms. The SIJORI cross-border region: Transnational politics, economics, and culture, 411-430.
Masteikiene, R., & Venckuviene, V. (2015). Changes of Economic Globalization Impacts on the Baltic States Business Environments. Procedia Economics and Finance, 26, 1086-1094.
Munoz, J. M. S. (Ed.). (2013). Handbook on the Geopolitics of Business. Edward Elgar Publishing.
Shaw, T. M. (2013). Beyond Regionalism?: regional cooperation, regionalism and regionalization in the Middle East. Ashgate Publishing, Ltd..
Shiryaev, D. V., Litvinenko, I. L., Rubtsova, N. V., Kolpak, E. P., Blaginin, V. A., & Zakharova, E. N. (2016). Economic Clusters as a form of Self-organization of the Economic System. International Journal of Economics and Financial Issues, 6(1S).
Simcoa.,(2018).Our company[online], Retrieved from https://www.simcoa.com.au/
Stroeva, O. A., Sibirskaya, E. V., Khokhlova, O. A., & Oveshnikova, L. V. (2014). Regionalization of the innovation management process. Life Sci J, 11(8s), 1097.
Van Langenhove, L. (2016). Building regions: the regionalization of the world order. Routledge.
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