Trade Opportunity for Amdocs Company in BRIC Countries Research Paper

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Introduction

Rapid economic growth and development in various parts of the world have provided international companies with major business opportunities. Brazil, Russia, India, and China (usually referred to as BRIC) have especially been attractive to international investors. In fact, major manufacturers and service providers in developed countries have embarked on aggressive processes of establishing centers in BRIC. Entering these fast-expanding economies at these early stages is been seen as a key advantage for future growth. Contained in this report is an analysis of how an international company (Amdocs) can enter these BRIC markets.

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The analysis also provides an investigation of how Amdocs made an entry in some of these countries, China and Brazil. The study is divided into three sections: a background that provides viewpoints on the company, an issues section that stipulates challenges and opportunities of entering BRIC, and an analysis section that provides solutions to concerns mentioned in the issues sub-section. A conclusion will highlight important points made herein.

Background

Amdocs is NYSE quoted company that provides wireless (especially phone companies) with support services that include managing customer services management (Amdocs) The company has a wider clientèle that spreads through the six continents. The rapid economic development in BRIC economies has with no doubt been accompanied by an expansion of respective telecommunication companies. Amdocs has therefore seen a rapid expansion of its services to clients in those countries.

However, Amdocs has not fully taken the advantage of market potential. The future for the communication industry is especially bright considering that the economies are on a faster rise. Telecommunication companies that Amdocs has been serving in developed countries have also expanded operations to BRIC nations. Fact that they would need similar services in their new markets serve as clues that Amdocs may be needed to expand there, too. Many other companies providing similar services with Amdocs, meaning that competition is still rising.

Issues

There are five specific issues facing Amdocs management as it makes decisions on whether to expand to BRIC nations. These challenges will hereby be set in form of questions. The firsts one is: Should Amdocs take the advantage of the market potential in BRIC nations by establishing operations there? This question is best answered through cost-benefit analysis, which helps in weighing the long-run income that would be gained by entering into new markets compared with any short and long-run costs that will be faced (Balls 9). This is something that Amdocs management should take time to discuss and arrive at the most agreeable decision.

Most importantly, the management should avoid making rash decisions, or going to establish operations in BRIC countries just because competitors or client companies are doing the same. Undertaking such rushed decisions could lead to poor policies that could lead to ineffective implementation, and thus lose credibility that client companies had on Amdocs.

Secondly, Amdocs management should ask itself on the best way to venture into BRIC markets; should the company go it alone, enter into a joint venture arrangement, or buy an existing company in BRIC markets? Answers to these questions would entirely depend on the level of competition in each of the BRIC nations, sizes of operations that would have to be set up, and also government restrictions in individual economies.

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The urgency of the matter should also be considered. Just like in the cost-benefit analysis discussed above, the company management should have a heavy emphasis on maximizing long-run benefits when choosing the mode of incorporation. In answering the question, company management should further consider the interests of the other party, especially when either joint venture or takeover becomes the most preferred option. Client companies’ interest in the matter should also get some consideration, lack of which could lead to poor business relationships.

Thirdly, Amdocs management should answer the question on which is the best way to venture into these virgin markets, is it drastic or piecemeal? The drastic entry refers to starting to provide the client a bundle of services like it has been done in other markets. Undertaking this route requires enough preparation on Amdocs part. Lack of proper preparations could lead to providing companies with poor quality services or inefficient and thus destroy relationships that had thrived previously. The piecemeal approach regards providing respective client companies with only the basic services during the initial stages.

This is followed by the increased number of services to client companies as the need arises or as Amdocs gains the capacity for such operations. Whether client companies would appreciate the adopted approach is the big question that Amdocs management will have to incorporate in their decision-making process. This problem can however be solved by keeping close communication with client companies and thus improve working relationships that could last for many years to come.

The fourth question for Amdocs management to consider regards whether the company is capable of fighting off competition that is already located in BRIC markets. The first step in this process is understanding the period that respective competition has been operating in respective economies. The second would be the size of the competition as well as the size and number served by rival firms. Developing such understanding would help in the process of developing the most appropriate solutions to counter the already existing competition.

In addition, Amdocs management should consider understanding the possibility of the company, being outwitted by competitors, especially at the beginning period of operation. All these would help in the process of preparing the company for launch in any of the BRIC markets. Management should therefore consider embarking on the process of looking for solutions on the matter surrounding expansion into BRIC economies. Some possible solutions are discussed in the next section.

Analysis

Amdocs should definitely take the advantage of locating in BRIC countries, owing to the ever-expanding use of wireless telecommunication technologies in respective economies. In fact, entering the markets at this early stage will give the company a head-start against possible competitors. Further, the sector is set to expand even more. BRIC countries are consistently ranked among the economies with the fastest expanding telecommunication markets in the world (The Banker 12; Leitch 17).

According to Economist Intelligence Unit, the BRIC economies are increasingly becoming a beehive of activities for global telecommunications companies that are interested in being part of the economic boom (Financial Post 15; The Economist 6). Amdocs should see these telecommunication companies as target clients and consequently approach respective management. The company should especially start by approaching subsidiaries of companies that are already on its client base.

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This should indeed be seen as the best route in penetrating into BRIC markets, especially considering Amdocs’ track record with parent firms. In countries that lack client company representation, Amdocs management should consider requesting customers to serve as transferals (Pensions Week 9). The management of companies that have been served well by Amdocs will most likely feel obliged to give the due positive referral, and therefore contribute to increasing customer base.

Opening fully independent branches, as opposed to joint ventures and buyouts, is the best choice for the company. In fact, Amdocs has a tradition of opening independent operations in each of the countries it provides services. A major advantage of opening independent offices is the company’s well-trained staff with experience from virtually all the six companies. Inaugural employees in the new BRIC offices will therefore have a wider understanding of international businesses.

In addition, some in the labor force have had the experience of setting up operations from scratch in various other markets. Reliance on internal and internationally exposed staff does not mean that Amdocs would not embark on employing some local specialists. The company definitely needs to hire local labor for some of the services undertaken in offices or on the field. Prior to employing local employees, Amdocs management or representatives should embark on understanding government regulations lest they get started on a wrong footing.

In addition to learning of local labor laws, Amdocs representatives should embark on understanding the client company needs from respective management. This would help in developing systems that would best meet clients’ needs. This calls for the establishment of a working rapport between client company management and Amdocs representatives. Most importantly, issues that transpire from initial meetings between the two parties should be communicated to Amdocs management for further advice if needed.

This is especially important in the initial stages before the representative teams gain momentum. Individual teams representing Amdocs in BRIC countries should understand that doing more listening to customer needs would go too far lengths of helping develop products that have positive impacts on the market. In addition to asking client companies about their needs, Amdocs representatives should embark on performing their own field research and consequently deliver to clients.

According to World Bank (85), companies expanding to other countries should ensure an understanding of local customs that may affect business operations. This understanding calls for the company representatives in BRIC countries to embark on the process of investigating and learning local customs and traditions that could be in conflict with the company’s products of important processes. This would result in the tweaking of products in order to make them m, more friendly and acceptable.

Other than products and business operations, representatives should ensure respecting all local customs and traditions affecting guarding day-to-day life. The process of understanding and complying with local customs and traditions should not be left to company representatives alone. In fact, the company should ensure employing the services of consultancy firms that deal with business relocation and foreign establishment issues (Bown 11).

Management should further consider the services of cultural coaches that would help representatives in their adjustments. Using professionals to provide such services would go a long way in ensuring that company operations are undertaken in ways that are totally acceptable to local customs, traditions, and government regulations.

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Considering the telecommunication industry in BRIC countries is expanding fast, Amdocs management should consider entering the market for the long run. All plans relating to the new establishments should focus on creating a strong foundation for the company in the long run. This would allow Amdocs representatives to embark on developing and implementing policies that would attract client companies that would be served for many years to come.

Further, representatives would focus on acquiring contracts from companies that are most likely destined to be market leaders in respective BRIC markets. The long-term approach further helps in the allocation of company resources in ways that would have a long-term impact on individual and overall productivity (Yao & Yuch 125). Another advantage of preparing for the long run is that the competitive business environment provided by the BRIC companies could easily be used as launching pads to other neighboring countries as well as regions (IHT 6). Amdocs is indeed advantaged in using these BRIC markets as routes to penetrating other neighboring economies.

This is in consideration that the cost of labor in the four markets is internationally competitive. In addition, the economies have a fast-expanding technical knowledge base that is vital in running a wide range of technical and non-technical aspects of company operations. All these reasons lead to the conclusion that Amdocs should embark on establishing in BRIC countries. It has been argued that concentrating on the long run, which would help in developing and implementing strategies important for long-term business productivity. The process of understanding cultural and business norms in respective countries should be done in association with professional consultancy firms. All these processes would lead to the eventual establishment of operations in the BRIC countries.

References

Balls, Andrew. “G7 and the Brics.” Financial Times. 2007.

Bown, Jessica. The Unexpected Rise of BRIC Countries. Sunday Times. 2007.

Financial Post. “Getting Ready for BRICs.” Financial Post. 2003.

IHT. “The Brics.” IHT. 2006.

Leitch, Carolyn. “Investigating Investor Interest’s BRIC.” Globe & Mail, 2006.

Pensions Week. “Rise and Rise of the BRICs.” Pensions Week, 2005.

The Economist. “Following into BRICs Success. The Economist. 2003.

The Banker. “BRIC Nations and The World Economy.” The Banker. 2005.

World Bank, Globalization, Poverty & Growth. Oxford: OUP, 2004.

Yao, Yang & Yueh, Linda. Globalisation & Economic Growth. Singapore: World Scientific.

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"Trade Opportunity for Amdocs Company in BRIC Countries." IvyPanda, 15 Oct. 2021, ivypanda.com/essays/trade-opportunity-for-amdocs-company-in-bric-countries/.

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IvyPanda. (2021) 'Trade Opportunity for Amdocs Company in BRIC Countries'. 15 October.

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IvyPanda. 2021. "Trade Opportunity for Amdocs Company in BRIC Countries." October 15, 2021. https://ivypanda.com/essays/trade-opportunity-for-amdocs-company-in-bric-countries/.

1. IvyPanda. "Trade Opportunity for Amdocs Company in BRIC Countries." October 15, 2021. https://ivypanda.com/essays/trade-opportunity-for-amdocs-company-in-bric-countries/.


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IvyPanda. "Trade Opportunity for Amdocs Company in BRIC Countries." October 15, 2021. https://ivypanda.com/essays/trade-opportunity-for-amdocs-company-in-bric-countries/.

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