Question

SWAP Spinning a clothing company based in the city of Ndola in the Copperbelt province of Zambia believes that the domestic market is highly competitive and limited due to the entry of Salaula (Second-hand clothing) run by many providers scattered everywhere in the country. The Company wishes to expand by manufacturing and selling its products abroad especially in the great lakes region. At this stage it has not identified where it will locate its manufacturing facility in the great lakes region. The Company believes that there are major advantages to be gained by setting up a factory in a country with a low-wage economy. The Company recognizes the need to understand the marketing environment of the country within which it establishes its manufacturing facility. It appreciates that besides labour, there are other local environmental issues which need to be fully considered before entering negotiations to build a factory. You work as a Strategic Marketing Manager for SWAP Spinning. Required a) Which environmental factors would you analyse before entering negotiations to build a factory in any of the great regions of your choice (10 Marks). b) Explain the possible cultural influence on the effects of the work force in respect of local education and training, technology, working hours and domestic amenities (10 Marks).

Answer 1

a) FACTORS TO ANALYSE BEFORE BUILDING A FACTORY IN FOREIGN COUNTRY:

ENVIRONMENT for an organisation is the area in which an organisation survives and grows and the FACTORS that can effect it is environmenrtal factors.

1. POLITICAL ENVIRONMENT- ​​​​​​​​​​​​​​Stability of political environment of that country , Local taxation policy ,Fforeign trade regulation's of the country ,social welfare policy of the country.
2. TECHNICAL ENVIRONMENT- Advancement in technology of that country , Status of intellectual property issues, Interest of government's and industries of that country in technology.
3. LEGAL ENVIRONMENT- Relevant consumer laws , Status of employment ,Health and safety and product safety laws.
4. SOCIAL ENVIRONMENT- Lifestyle trends, Income level and education of the citizens , Religion and its influence on consumers ,Attitude of people of that country.
5. ENVIRONMENTAL- Local environment issues , Environmental protection laws , Regulations regarding waste disposal and energy consumption.
6. ECONOMICAL ENVIRONMENT-  Level of inflation or deflation and its forecast , Local employment level and it's changes in future, GDP level and other economical prospectus of the economy.

B) CULTURAL INFLUENCE ON THE WORKFORCE:

1. LOCAL EDUCATION AND TRAINING - Workforce with local education can impact their growth in an MNC as thes people will not be able to cope up with the interntional workforce needs for the company which can effect the company's employment turnover cost.
2. TECHNOLOGY- effects of technology will depend on the country as some country's use high tech and advanced technology whereas some use backward and obsolete technology. Hightech technology will increase the productivity of the workers with their skills upgradation and backward technology will decrease their productivity with time and they will lack skills.
3. WORKING HOURS- The workers doing long hour shifts will be less productible than workers doing shifts with breaks as continuous working will make the worker tired whereas breaks between the shifts will refresh the worker.