Today, Enlighten Technicians (ET) are here to provide your company with answers to your curiosity about if expanding into the global market is a good or bad move. We will explore multiple pros and cons that can have an effect on your company. Before diving into where ET thinks the country and your company would prosper in let’s answer a major question. What is a global strategy? A global strategy is a well-organized plan to expand a product to one large market. Since, March of 2006, J&D Ferrer Co was able to grow their company up to ten distribution and manufacturing plants from five. In doing this the company was able to handle shipping for 48 out of 50 states. With this huge success in the United States of America, J&D Ferrer Co. has grown to be known for their superior quality and exceptional customer service. With the company’s contemporary designs that are appealing to their consumers to economically recycle and help underprivileged individuals.
My team and I have deliberated about which country would be best for J&D Ferrer Co to start its expansion and we have chosen Italy for the first expansion. Let’s start off with saying that Italy has seen a giantism rise in its furniture export revenue. With their formula for success hinging on its generations-long legacy of having master craftsmen, and also in research and development of new designs. J&D Ferrer Co. has a similar strength in vertical integration. Italy’s progress relies on its long inheritance of having expert skilled workers, and furthermore in innovative work of new plans. Your progress relies upon your in-house designers that allow for innovative work at a rapid pace. With that being said the number one thing ET is looking to keep your superior quality and exceptional customer service. When moving to Italy, if you choose to utilize their resources it will help save on funding for marketing, set up, running the business in Italy. There are five key resources for a global strategy: Adequate funds, quality, management, time, & innovation.
Your company would primarily focus on adequate funding, management, and time. Reason being is that quality and innovation is already utilized within Italy. Like, the saying “When in Rome, do as the Romans do!” and that is exactly what we have in store for J&D Ferrer Co. We plan to leverage Italy as much as possible. By using their pre-existing skilled labor workforce and raw materials. Turning focuses on adequate funding, management, and time bring the discussion of exporting out of Italy to your consumers. When exporting out of Italy, there are no restrictions. According to data, the export value of the Italian furniture industry has experienced and is expected to experience a positive trend passing from 7.5 billion euros in 2010 to over ten billion euros in the coming 2020. Meaning in 2020, you are looking at about 11.5 billion USD in the Italian furniture market.
Of course, those are only a couple of positive concerns. Some of the other pros of outsourcing are better revenue realization and enhanced returns on investment; lower labor cost and increased realization of economies of scale; wider knowledge base for better innovation; management has more time, enabling companies to focus on core competencies while not being concerned about outsourced routine activities; increased speed and the quality of delivery of outsourced activities; & reduces cash outflow and optimizes resource utilization. Some of the possible cons would include sluggish response times coupled with slow issue resolutions; shortcomings in performance vis-à-vis expectations; lower than the expected realization of benefits and results; issues pertaining to lingual accent variation; & an irate customer base coupled with enraged employee unions.
With all of this information, there is still one question that remains. How will the move of outsourcing to Italy impact our competitive strategy? The answer is that this will make J&D Ferrer Co an enormous competitor in the global furniture market. From a customer perspective, we will be able to provide lower prices for goods and services because of the economies of scale and scope that will derive from a larger global base. From a company perspective, we see new sale opportunities and attach many foreign customers. Overall, outsourcing to Italy will be phenomenal. There were multiple positives takeaways and a few negatives. Enlighten Technicians, my team, and I think that both parties will see a lot of positives to continuing your company growth.
