Billabong Company Profile
Quetsion:
Explains market expansion process of the Billabong Company.
The main aim of the report is to provide a brief overview of the international business. Billabong Company has been selected in the report to explore and flourish its business at international level. It is a surf company which provides accessories to the customers. Two countries Cyprus and Laos have been chosen in the paper. Cyprus is the European country while Laos is an Asian country. Microenvironment factors of both the countries have been discussed in the report.
Billabong international limited is a surf company, which is primarily producing accessories such as skateboard, watches, snowboard, and backpacks under some other brand names. The firm was incorporated in 1973 by Rena Merchant and Gordon. The organization traded on the Australian stock exchange. The firm acquires new retail outlets and brands to move beyond the wholesale business.
The country has decided to expand and flourish its business activities and operations in other countries. Further, talking about the countries Cyprus, the country is the third biggest Island in the Mediterranean Sea, located at the most eastern corner of the European Union. A skilled workforce with unique infrastructure system and excellent telecommunications are available in the country. The country is the lowest tax regime in the European Union. There are several factors that contribute to make the country an attractive and dynamic environment for doing trade and business. Another country is Laos, the country is one of the few remaining communist states in the world and it is one of East Asia’s poorest countries. The country is highly dependent on the foreign aid and foreign countries. Billabong wants to expand and explore business in both the countries (Van Wormer and Besthorn, 2017).
It is evaluated that the company can start its business operations and activities in both the countries. Billabong Company has a great option to implement its trading activities in both the countries because there is a less competition in Cyprus and Laos (Itani and Mason, 2014). The macro environmental analysis of both the countries has been discussed below.
Political factors: The country has a certain political stability. The country is geographically positioned close to Lebanon, Israel, and Egypt which is an unstable nation. Furthermore, Cyprus joined the European Union in 2004. The company can operate and implement its business plan in Cyprus because political conditions of the country are good and unique. The country also follows a non-aligned foreign policy to develop and build a strong position in the world. The firm should evaluate the political factors to beat the competitors in the competitive market (Nugent, 2017).
On the other hand, Laos is one of the poorest countries where corruption is one of the major issues which can influence the success and growth of Billabong. Over the last few years, the government of the country is implementing effective measures to reduce and prevent corruption to make it a safe and secure working environment for doing business. The government is inspecting targeted groups and units that are involved in corruption. It helps to eliminate corruption from the country. Poor regulatory infrastructure also influences the long-term mission and vision of the firm (Singh, 2012).
Opportunities for Business Expansion in Cyprus and Laos
Economic factors: Cyprus country is affected by the economic crisis because of the economic situation of the country in Greece. The country maintains a good relationship with Greece. Approx 9% of the Cyprus imports are done with the United Kingdom. In addition, the country economy is in recession thus it can influence the long-term mission and vision of the firm. Along with this, development and construction sectors are also down. Furthermore, skilled labor and experienced labor are presented in the country( Popa, 2012).
The Laos economy is shown notable resilience growing at an average annual rate of approx 7% over the last five years. The country continues to assimilate fully into the system of trade and investment. Corruption, weak property rights, and burdensome bureaucracy are another challenges for the firm in Laos country which have a direct impact on the business operations of the company (Ifinedo, 2012).
Sociological factors: The social factors include age, sex, caste, values, culture, and customs of the people will affect the progress of Billabong. In addition, the population, and growth rate are the big challenges for the organization. The generational shift has been started in the nation which is providing opportunities to young people to show their skills and talent (Ervasti, Andersen and Ringdal, 2012).
Along with this, Lack of education and infrastructure will negatively affect the long-term vision of the firm. In Laos country, 50-60% of the population depends on subgroups and units. The language and culture difference is also a big challenge for the firm (Baird and Le Billon, 2012).
Technological factors: The technology and infrastructure system of Cyprus is unique and dynamic which helps to attain the competitive advantages in the competitive market. It also helps to achieve desired objectives and goals of the firm (Andrei, Teodorescu and Oancea, 2011).
Furthermore, talking about the Laos country, there is no infrastructure facilities in this country. Poor technology and resources are used by the country which will not provide competitive benefits to the company. The firm should focus on the resources, technology and infrastructure facilities to overcome on the competitors in the global market.
Various trade and business policies have been made by the Cyprus government to start a new business successfully and effectively. Cyprus is one of the UK’s top 50 export markets. The UK is an important partner of the country for providing facilities and services to the country. Cyprus is a member of the EU and WTO (Serenis and Tsounis, 2013). World trade organization also provides support to the country to implement and initiate new activities and operations in such country. The goods which have been manufactured in the UK are exempt from import duties (Wong and Hill, 2012). It can provide benefits to Billabong. Along with this, a Bilateral and unilateral agreement has been signed by the government to provide support and guidance to new enterprises. In addition, the country focuses on the transatlantic trade and investment partnership to make it easier foreign trade and business. New strategies and policies have been implemented by Cyprus government to gain new economic opportunities in such country. Moreover, the country uses preference programmes and trade agreements to promote and enhance foreign trade in the global market (Clarke, 2011).
Microenvironment Analysis
It is noted that the Laos government is also trying to initiate and implement new trade and business strategies and policies to grow for Billabong Company. The country has made cooperation agreements to ensure an effective and dynamic environment for investment and trade relations (Kawai and Wignaraja, 2011). Laos is one of the 10 members of the ASEAN (Association of Southeast Asian Nations). China and Europe are the trading partners of Laos which provides support to the country. In addition, bilateral and multilateral trade agreements have been made by the Laos government. The country has also signed trade agreements with nine members of ASEAN to implement effective policies and strategies in the country. In 2016, Laos signed a trade and investment framework agreement to promote and enhance trade and business. All these agreements have been made by the Laos government to enhance and encourage foreign trade and business. Now it is assumed that the company can take several benefits by starting new business operation in Laos (Bhasin, 2011).
Short-term policies: There are enormous short-term policies and strategies implemented in both the countries according to their political and geographical conditions. The countries have made the attractive and unique policies for trade and business.
Potential danger:
Cyprus
There is high and immense competition in Cyprus. In addition, the income level of the people is low in this country due to which the firm can face various difficulties and challenges during the selling the products and services. Due to immense competition, the company has not been able to attract more customers in the market. In addition, political and social factors will also influence the activities of the company.
Laos
Laos is one of the poorest countries in the world. Billabong will have to face several challenges due to lack of infrastructure and technology. Furthermore, natural resources are also not available in the country to start a new business and trade. Risk of competition is also another big challenge for the company. All these challenges will be faced by the company in Laos country.
Risks
Cyprus
- State bureaucracy and slow process is a big challenge for the firm in this country.
- Lack of transparency is also the biggest risk for the company. Bias in government consideration will affect the success and progress of Billabong.
- Risk of rivalry is also present in Cyprus market which makes it complex for Billabong to explore their trade and business in this country (Suder, 2011).
Laos
- Poor technology will affect the efficiency and effectiveness of the workers. Due to poor technology, innovation is not possible in the country.
- Lack of adequate infrastructure and education in Laos, the firm cannot attain its long-term vision and mission (Bhasin, 2011).
Opportunities
- Billabong can take advantage of effective and innovative technology and infrastructure.
- Skilled and potential labors are available in the country to carry trade activities in Cyprus country.
- The UK provides support to country thus the firm can take several benefits in the country.
Laos
- Lack of competition will help Billabong to create a good position in the global market and it also helps to maximize sales and revenue of the firm.
Conclusion
On the above-mentioned study, it has been concluded that the company can expand and explore its business activities and operations in both the countries. Cyprus will provide more advantages compared Laos, if the company initiates its trade activities in Cyprus. The paper explains the macro environment of both the countries. There are enormous reasons for choosing Cyprus to conduct the trade and business of Billabong has been discussed below.
- Cyprus will provide a large market compared to Laos. Also, it will help to stand out against the competitors in the market.
- Due to unique and innovative technologies, the company receives benefits to implement the operations and activities without facing hurdles and challenges.
- Skilled and potential employees are also the biggest strength of the country that will help to increase the number of customers in the market. In this way, Billabong can take several advantages while conducting business activities in Cyprus
References
Andrei, T., Teodorescu, D. and Oancea, B., 2011. Characteristics and causes of school dropout in the countries of the European Union. Procedia–Social and Behavioral Sciences, 28, pp.328-332.
Baird, I.G. and Le Billon, P., 2012. Landscapes of political memories: War legacies and land negotiations in Laos. Political Geography, 31(5), pp.290-300.
Bhasin, B., 2011. Doing business in the ASEAN countries. Business Expert Press.
Bhasin, B., 2011. Doing business in the ASEAN countries. Business Expert Press.
Clarke, P., 2011. Exploring the history of accounting in Cyprus. Global Business and Economics Review 3, 13(3-4), pp.281-295.
Ervasti, H., Andersen, J.G. and Ringdal, K. eds., 2012. The Future of the Welfare State: Social policy attitudes and social capital in Europe. Edward Elgar Publishing.
Ifinedo, P., 2012. Factors influencing e-government maturity in transition economies and developing countries: a longitudinal perspective. ACM SigMIS Database, 42(4), pp.98-116.
Itani, N. and Mason, K., 2014. A macro-environment approach to civil aviation strategic planning. Transport Policy, 33, pp.125-135.
Kawai, M. and Wignaraja, G. eds., 2011. Asia’s Free Trade Agreements: How is Business Responding?. Edward Elgar Publishing.
Nugent, N., 2017. The government and politics of the European Union. Springer.
Popa, A.M., 2012. The impact of social factors on economic growth: Empirical evidence for Romania and European Union countries. Romanian Journal of Fiscal Policy (RJFP), 3(2), pp.1-16.
Serenis, D. and Tsounis, N., 2013. Exchange rate volatility and foreign trade: The case for Cyprus and Croatia. Procedia Economics and Finance, 5, pp.677-685.
Singh, S., 2012. Natural potency and political power: forests and state authority in contemporary Laos. University of Hawai’i Press.
Suder, G., 2011. Doing business in Europe. Sage.
Van Wormer, K. and Besthorn, F., 2017. Human behavior and the social environment, macro level: Groups, communities, and organizations. Oxford University Press.
Wong, R. and Hill, C. eds., 2012. National and European foreign policy: towards europeanization (Vol. 74). Routledge.
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