Introduction
The automotive industry has become one of the major pillars of national GDP for many countries including the United States and Japan. Recognizing the crucial role of auto industry in economic development in the coming decades, many national governments have taken proactive steps to fuel the growth of their automobile sectors. A long experience of innovative automobile technology development coupled with strength of high quality products has assisted XYZ Motors to grow fast in the domestic as well as international market. This paper will identify different strategies for fueling the growth momentum of XYZ Motors and increasing its domestic and global market share. The paper will also analyze the viability of the firm’s plan to enter the Indian market.
Strategies for Revitalizing Business
The current global automotive industry is characterized with intense competition because multinational and domestic automobile corporations are taking vehement efforts to recognize the changing market pulse and to meet individual customer needs effectively. In this context, it is necessary for the XYZ Motors to revitalize its business strategies to fit the tastes of the modern auto world. It is clear that the organization has been performing outstandingly in terms of innovative automobile technology development for many years and it is prominent for its high quality products.
Hence, the company can excel in the domestic as well as global marketplace if it is able to be conversant with the current market trends. Referring to the experiences of many other successful automobile companies such as Toyota, it is advisable for the XYZ Motors to adopt a customized product development approach to meet the interests of modern customers and thereby grow its domestic as well as international market share. In addition, it would be a great strategy for the organization to rely extensively on online marketing, specifically social media marketing, to enhance its exposure to the target audience. The XYZ Motors may also invest increasingly in R&D to develop more environment-friendly car models as it may be a promising approach in the current context of growing global warming and climate change issues.
When it comes to the viability of the Indian market, India is the second fastest emerging country in the world after China. Under the innovative leadership of its Prime Minister Narendra Modi, India has achieved a significant GDP growth rate over the last several months. According to International Monetary Fund, India is expected to achieve a GDP growth of 7.3% and 7.5% for the financial years 2015-16 and 2016-17 respectively (The Hindu, Jan. 20, 2016). Furthermore, the Indian automotive industry has been growing at a tremendous pace over the last several years, and this favorable situation in the Indian market would justify the firm’s decision to expand into the India. In addition, it is interesting to see that India has one of the world’s fastest growing passenger car markets (Krishnaveni & Vidya, 2015).
Diversity Management
It is vital for a multinational company like XYZ Motors to pay particular focus to diversity management because values and norms of people vary from culture to culture. Needless to say, Japanese and American cultures are entirely different from each other, and hence the company has to adopt culture-specific business strategies to dominate these countries’ auto markets.
Therefore, it is essential for the organization to give increased emphasis on cultural diversity while operating in the American market. While evaluating the Indian culture, it seems that different Indian States have different cultures and languages. Considering Indian people’s adoration to high-profile celebrities like cricket players and Bollywood stars, it would be a potential strategy for the XYZ to rely largely on the concept celebrity marketing in India. In addition, the company has to keep in mind that the Indian people give considerable importance to their religious beliefs and values.
Corporate Social Responsibility (CSR)
Both Japan and the United States are economically and industrially developed countries, and hence their governments enjoy a superior power over the industries and businesses. These countries have potential environmental laws in force and they are enforced very strictly throughout their territories. In this context, it is necessary for the XYZ Motors to focus particularly on the concept of environmental sustainability while operating in Japan and United States. Both these countries have strict and advanced mechanisms to test firms’ CO2 and other toxic emissions into the environment (Roychowdhury, n.d.a.). If the XYZ Motors fails to operate in strict compliance with such emission standards, the company will certainly face legal proceedings and huge fines. On the strength of their greater influence over industries and businesses, United States and Japanese governments insist companies to demonstrate their commitment towards social responsibility.
Therefore, the organization is advised to invest greatly in social responsibility programs to attain government and public support while promoting their operations in these countries. However, the situation is a little bit different in India, which still remains to be a developing economy. Compared to United States and Japan, India has weaker laws and regulations concerning environmental sustainability and corporate social responsibility. In this situation, the company can take great advantages of the India’s political and socio-cultural environments if it develops an appealing CSR budget for the country that is extremely struggling to meet the basic needs of its massive population.
Medium-term Goals
The XYZ’s medium term goals for the next 3-5 years should encompass the firm’s desire to boost sales in the US and the Japanese auto markets as well as to enter the Indian market. In the coming years, it would be really difficult for the company to confront the market competitors and to sustain its operations effectively unless it can cut down its operating costs. So as to cut down its manufacturing and labor costs, the company should plan to relocate their manufacturing facilities from United States to an overseas destination like India where raw materials and labor can be available at cheaper costs.
In addition, the company has to focus increasingly on its marketing efforts over the next few years as it is vital for a growing multinational business like XYZ Motors to spread into more and more overseas markets. As mentioned already, it is recommendable for the organization to emphasize specifically on social media marketing to cover a broader audience using lesser resources (Kumar, A & Bezawada, 2014, p.54). In addition, the company can promote health awareness campaigns or education initiatives so as to demonstrate its social commitment and to capture public concentration. Similarly, the medium term goals should include the plans to enter the Indian market within the next few years and the targeted initial sales there. The company has to increase its global market share by 15% and the domestic market share by 40% over the next three years.
Recommendations
For a growing multinational corporation like XYZ Motors, a global management team capable of dealing with cultural diversity effectively must be the primary concern. As this global management team is responsible for handling the firm’s operations in different countries, it must have the ability to address cultural variances effectively. Linguistic barriers often become an obstacle to open communication in a global management team. In order to address this difficulty, it is recommendable for the XYZ Motors to include more English-speaking people in its global management team because English is a globally recognized language. The team members should be trained to accept and respect their colleagues’ cultural traits to behave politely in a culturally diverse worksite environment.
It is advisable for the company not to include too many members in the team from a single country as this practice may result in cultural conflicts. The global management team must be comprised of executives with different skills and abilities as this approach can greatly assist the team to take instant and sound decisions in an emergency situation. Finally, the organization has to promote group cohesiveness and collaboration in this team so as to enhance the unanimity of business decisions.
Conclusion
References
Cipriani, G. (2014). Culture and Dialogue. US: Cambridge Scholars Publishing.
The Hindu. (updated Jan. 20, 2016). IMF cuts global growth forecast as China slows. Retrieved from http://www.thehindu.com/business/Economy/imf-retains-indias-gdp-forecast-for-2017-at-75/article8124019.ece
Krishnaveni, M & Vidya, R. (2015). Growth of Indian Automobile Industry. International Journal of Current Research and Academic Review, 3 (2), 110-118.
Kumar, A & Bezawada, R. (2014). “Effects of consumers’ social media participation on consumer behavior.: A marketing perspective”. In Antneh, A. Ed. Harnessing the Power of Social Media and Web Analytics. US: IGI Global.
Roychowdhury, A. (n.d.). Winter and Diesel cars. Center for Science and Environment. Retrieved from http://www.cseindia.org/node/203
