The company successfully produces and sells washing machines: Strategic Management Assignment, UCD, Ireland

Assignment Brief:

You are the Managing Director of Wishy-Washy Tech Ltd. The company successfully produces and sells washing machines in South America. However, the effects of globalization are strongly affecting the washing machine industry. This trend of increasing internationalization poses big, new challenges for the company. You are responsible for the strategic realignment of the company. The Wishy-Washy Tech Ltd shareholders have formulated a clear vision for the company’s future growth strategy that they have named: “Going Global.”

You are not competing alone in the South American Market, but against several other washing machine manufacturers who are also breaking into new markets. There are manufacturers coming from the other 5 global economic regions (North America, Europe, Africa, Middle East/South Asia, East Asia/Pacific) that are also striving for internationalisation in the future so you can expect their expansion to your home region.

General:

Political problems in major countries have slowed the region’s growth in these recent years. Threats of nationalization of private economic sectors and power struggles have preventing direct investments and limited the growth opportunities of local enterprises.

Demand:

In the recent years, many international competitors have reduced their operations in South America because of the uncertainty surrounding government intervention in the private sector. This has left the home appliances market with only a few players. The fact that actual growth remained below potential economic growth also shows that the demand for home appliances rose sluggishly.

Costs:

Raw material prices in the region are relatively cheap due to its large natural resources. Logistic costs have remained relatively high over the past years due to corruption and trade barriers. In comparison to North America, one of the largest export markets, labour costs are still considered low. Production employee productivity is comparatively high.

Expert Tips:

In the past, it has been relatively difficult for companies to successfully grow their own sales force in South America. Companies have mainly found noticeable success with sustainable investments in the region through sales projects. Companies that are more risk averse should also consider a cooperation when entering this market. In South America, Asian manufacturers have an especially positive image among consumers due to their traditionally good value.