Risks
With the expansion of globalization, many businesses have begun to consider the possibility of expanding. Vodafone, an initially British company, also is following such ideas and has decided to start operating in Brazil and India.
When expanding to India, the company is likely to face issues that deal with the foreign exchange rate fluctuation, as Great Britain and India have different currencies. Interaction with India’s bureaucratic government system can also turn into a critical issue because the company will have to adjust to it. Operating in a country with a poor population and poor security, Vodafone may be unable to achieve the expected profit. Poor transport infrastructure and child labor can also make it more difficult to conduct business operations. In Brazil, Vodafone can face financial issues because of the high cost of living and expensive currency. Recent corruption scandals and a poor transport system can prevent the company from reaching diverse populations. Low purchasing power will not allow the company to reach its potential (Beath, Fan, Frauscher, Jarvis, & Reis, 2008).
These risk analyses reveal cross-cultural factors as they consider all critical spheres, including culture, finances, infrastructure, customer behavior, economy, and politics. The emphasis is made on the differences in the framework of each sphere, while similarities are not likely to require any significant adjustment.
Recommended Plan
It would be better if Vodafone prepares for expanding not only through business alterations but also through cultural ones. This means that the human resource management team should develop a training program for employees to know how to act in the new environment and to interact with people around them so that their relations improve and the goal of attracting customers can be obtained.
Thus, it is vital to develop guidelines for professionals to understand how to operate in a class system. When interacting with customers and other shareholders, this information will ensure that no misunderstanding will occur and that business relations will not be spoiled, as there is a possibility to offend people from the upper classes by not knowing how to greet them appropriately, etc. In addition to that, by knowing diverse issues of the population, Vodafone will be able to develop the most beneficial marketing strategies and improve advertising, which will provide an opportunity to win competitive advantage and will affect its revenue positively. Thus, human resource managers should educate British employees regarding sophisticated communication patterns (Goodman, 2014).
Exit Strategy
If Vodafone fails to reach success in the new market, the company should exit it. Considering the fact that this organization is not a start-up and is already operating in many countries all over the world successfully, it seems to be advantageous if it transfers its products back to Great Britain in case they are not bought by the representatives of the general public. The company can also try to reconsider its target audience and offer some discounts. For example, both countries have a great gap between rich and poor people. Focusing on those who are rich and offering them some products that are advantageous for business purposes as well as rather prestigious, Vodafone can possibly sell a lot of them. Then the buildings owned by the organization should be sold to friendly buyers. The overall success of Vodafone worldwide is still likely to attract the attention of local businesses and make them willing to preserve the company’s legacy (Robbins, 2016).
References
Beath, A., Fan, Q., Frauscher, K., Jarvis, M., & Reis, J. G. (2008). The investment climate in Brazil, India, and South Africa: A comparison of approaches for sustaining economic growth in emerging economies. Washington, DC: World Bank.
Goodman, N. (2014). Six steps for successful expatriate training. Web.
Robbins, S. (2016). Exit strategies for your business.Entrepreneur. Web.