Introduction
Incentives are benefits or rewards a company offers its employees to motivate them to achieve certain goals or objectives. Inducements can help boost employee morale and productivity and increase company profits (Spisakova, 2019). These incentives are also important for companies aiming to enter new markets to enjoy social, economic, and political advantages. Transworld Minerals Inc. is a mining company specializing in coal extraction, and it decided to expand into Salaysia. Using incentives and adopting joint ventures will enable Transworld Minerals Inc. to peacefully enter and take advantage of the growing coal demand in Asia.
Discussion
In the case study, when discussing potential incentives to improve the attractiveness of Transworld’s proposal, it is important to consider domestic and international interests. In terms of Transworld’s position with the domestic Salaysian Coal Mining Company, they should consider offering a fair market price and developing mutually beneficial plans. Fair prices will benefit the company since the government will continuously hire its services. The government never found any technology to exploit the reserves (Chapter 1, n.d.). Therefore, setting fair prices will make the government cling to Transworld Minerals Inc. rather than outsourcing. Additionally, Wright should suggest additional financial incentives such as loan forgiveness programs or reduced-interest bank loans for infrastructure investments by local firms.
Similarly, it is essential for Transworld Minerals Inc. to consider additional incentives that could be included in their offer. These offers may include providing better conditions for the workers, increasing joint ventures and technology transfer opportunities and offering greater equity participation in their operations. All of these incentives must be thoughtfully weighed against the costs they will impose on Transworld, to develop an agreeable offer that both sides can accept. Finally, shared profits could equally be an attractive offer if it is structured to positively impact the local community while providing an appealing return on investment for Transworld Minerals Inc.
In the case of Transworld Minerals Inc., keeping the peace with the domestic Salaysian Coal Mining Company while internationalizing is essential. To make this happen, Transworld should look at negotiating an alliance with the Salaysian company to equalize the political advantage they enjoy. Through such collaborations, an innovative and mutually beneficial joint venture structure could be created to contribute to the long-term growth of both companies. Other possibilities include working to craft joint ventures between their respective coal operations, introducing shared technology and supply chain strategies, and even attracting investment from foreign sources that can benefit both parties.
Moreover, through a joint venture, Transworld would be able to shed away some of the costs associated with new market entry, such as establishing significant infrastructure and cultivating brand recognition from scratch. In addition, such a strategic partnership would similarly afford Transworld a certain political advantage (Chapter 1, n.d.). This advantage will be in line with its attempts to establish itself in Salaysia, similar to that harboured by the Salaysian Coal Mining Co, which has been able to successfully localize its operations despite stringent regulations. Likewise, joint opens up access to established distribution channels, customer relationships, and a lower cost of operation due to the combined resources of both parties.
Additionally, by drawing on the knowledge of experts within both companies with the familiarity of areas like local regulations or cultural considerations, any potential issues can be addressed quickly and efficiently. These soft and fast operations can create an advantageous foundation for success in the new market that individual entities would not have access to on their own. It is evident that each of these strategies could assist in reducing any risk associated with competition by creating collaborative opportunities where each company’s strengths are used to their mutual advantage.
Conclusion
In summary, Transworld Minerals Inc. is a mining company that has been in business for many years. The company has a strong track record of success and is looking to expand its business into Malaysia. To improve the attractiveness of Transworld’s proposal to the Industries Ministry, Wright should adopt incentives by working on market prices and working conditions. In enjoying political advantages, the company will have to collaborate with local companies.
References
Chapter 1 (n.d.). An Introduction to International Business and Multinational Corporations: Case Study 1.1, Transworld Minerals Inc., 18-30.
Spisakova, E. D. (2019). Position of employee benefits in remuneration structure. Transformations in Business & Economics, 18(2), 47. Web.