The White Rose
White Rose is a manufacturer and marketer of apparel products for both men and women and also children. The production philosophy of the company is to create products that put the body before the fabric. In its operations, the company puts equal emphasis on aesthetics, comfort and quality. Part of the products of the company includes knotted fabrics, leisurewear, and underwear for men, elastic ribbons, children’s wear, nightwear, brassieres and socks. The clientele of the company include fashion retail giants in the apparel industry like Target, Mark & Spencer, Wal-Mart. The company also does business with fashion brands like Calvin Klein, Hugo Boss, Nike ad Pierre Cardin.
The company has operations in different States throughout the United States of America. However, the company is headquartered in Secaucus, New Jersey. The company employs over one thousand people in its different stores in different states. The company’s portfolio ranges from intimate apparel, men’s underwear, green products, socks, brassieres, seamless, loungewear and active wear. In 2012, the company made over 150 million dollars in sales, a feat that marked a six percent increase from 2011. The operating income was over 8 million dollars. The company is performing flamboyantly in the U.S market. However, in a venture to increase its sales volumes, the company is endeavoring to venture into the international market. Additionally, this move is also informed by economies of scale, increase in innovation and the need for long-term security.
International Market
The company will start its international operations in Israel. The country has a very vibrant fashion and textile market. The ‘made in Israel’ label is synonymous with style, creativity, quality and imaginative design. This is in line with the philosophy of White Rose. Israel also boasts of globally reputable fashion houses. The success of an international business venture is highly dependent on the entry strategy a company adopts. The company will adopt wholly owned subsidiaries as entry strategy into Israel. This calls for sizeable investments in the production facilities, staffing and outlet offices however, there is a lucrative market and enabling environment in the country that makes the strategy worthwhile. Additionally, the company will have control on the marketing decisions and operations of the subsidiary. With this kind of control, the company can manipulate the factors of production to increase the volume of sales (Andriopoulos & Patrick 63).
Business Environment
The fashion industry in Israel benefits from an enabling environment that has spurred the industry to global heights. Firstly, Israel stands as a global center for high-tech innovation. The fashion industry has benefited immensely from this status. Fashion houses develop novel solutions of their own in order to meet specific design challenges. Israel has state-or-the-art ultrasonic bonding equipment that has revolutionized the fashion industry. The equipment cuts and seals the fabric pieces together. This negates the need for conventional sewing, thereby producing quality apparel through the use of seamless construction (Casillas, Francisco & Ana 52).
There are a number of critical factors that are potential determinants of success of the company’s venture in Israel. One of the critical factors of operation is labor. The company will require human force to perform the various activities under the vision of the company. Another critical factor of operation is space. The company will need space to layout its operations. The location of the subsidiary is of importance to the operations of the subsidiary. The location ought to be accessible, secure and spacious. Besides this, the building has to comply with the regulations of the local authorities in the country.
Cultural profile
Israel has two distinct nationalities namely the Jewish and the Palestine. These nationalities are inextricable based on their religious identities. The Palestinians are from the Arab decent and their traditions are based on the Muslim culture. The traditions of the Jews are also strongly founded on their religion. The official language in Israel is Hebrew while Arabic is the features prominently as the official language for the minority Arabs. In addition to these two languages, Israeli nationals also study English as it is taught in many schools. Among all the foreign languages, English is the most commonly spoken.
Most of the workers of the subsidiary will be will be acquired from the local labor force. There will be minimal expatriation of workers from the parent organization in the United States of America. This is so that the company gains leverage on the other fashion houses in the locality. Additionally, the nationals will identify with the company because rather than expatriating jobs, the subsidiary employee homegrown talent. I anticipate a good reception from the suppliers, distributors and the local government in the country. This is because the suppliers and distributors will be primarily involved in the operations of the company either through the supply of raw materials and other necessary equipment of distributing finished products. During the entry phase, the company will liaise with the local government in order to get all the requisite permits.
Organizational Chart
This structure outlines the hierarchy in the organization. It separates different department and at the same time synchronizes them so that their work is complimentary.
Staffing Policy
The company will adopt the polycentric staffing policy. Through this policy, Israeli nationals will manage the subsidiary although key headquarter positions will be held by nationals of the parent country, Americans. This staffing policy is appropriate for the location because Israeli nationals are familiar with the prevailing environment. This policy will also inspire goodwill in the local market. Besides this, it is less expensive when compared the ethnocentric staffing policy. It is better than the geocentric staffing policy because having some parent country nationals in key management positions in the subsidiary. This is because they are loyal to the parent organization. Additionally, host country nationals can be productive immediately and they are aware of the local business subtleties (Granger &Tina 78).
Leadership and Motivational Systems
Motivation is of paramount importance in a business enterprise. Motivated workers are generally more productive. Different motivational systems will be employed in order to keep the employees steadfast onto the path of success. Some of these systems include awards for the employee of the month, benefit packages and bonuses. Leadership systems that are going to be incorporated in the subsidiary include transactional and transformational leadership systems. In the light of this, the employees are going to be empowered through training, seminars and
Potential communication problems
As has been espoused earlier the staffing policy for top level managers will be polycentric. Given that some nationals from the parent organization will take up key management positions in the in the subsidiary, there are potential communication problems. Given the difference in cultures between U.S. and Israeli nationals, there might be potential communication problems. Personal issues at the workplace might cause a breakdown in communication in the company. This might potentially take long to resolve. Language barriers within the employees and the management might also cause a breakdown in communication. These problems can be prevented during the hiring process. For instance, when staffing the organization it is important to ensure that all the employees can speak in a common language. Personal problems can be dealt with by engaging in team building activities (Hisrich 106).
Special Control Issues
Some of the special control issues in the subsidiary include internal control on matters if financial reporting. This is because the tax regimes in Israel may be different that those in USA. In order to mitigate the risk of misstatement, the board needs internal controls in the reporting of financial information.
Concerns in the Local Community
Any concerns in the local community may arise from the expatriation of workers to work at the subsidiary. However, the staffing policy adopted by the company solves this problem because only key positions in management will be occupied by expatriates. Other positions will be occupied by nationals in the local community. Additionally, the subsidiary will be involved in activities in the local community in order to forge an understanding with the residents.
Works Cited
Andriopoulos, Constantine, and Patrick Dawson. Managing Change, Creativity and Innovation. Los Angeles: SAGE, 2009. Print.
Casillas, José C, Francisco J. Acedo, and Ana M. Moreno. International Entrepreneurship in Family Businesses. Cheltenham . Elgar, 2007. Print.
Granger, Michele, and Tina Sterling. Fashion Entrepreneurship: Retail Business Planning. New York: Fairchild Publications, 2003. Print.
Hisrich, Robert D. International Entrepreneurship: Starting, Developing, and Managing a Global Venture. Los Angeles: SAGE, 2010. Print.
