Module Code: ER3S72
Lecturer Name: M J Davidson Student ID: 10005838 Words: 2293
The Elecdyne is a SME for electronic products in Japan that has been created in 1990. Due to many external and internal reasons, the sales of Elecdyne have not increased over the past two years. Such as low market share (only Japanese), high salary and cost of licences. Limited market share limits the development of Elecdyne. The employee benefits is at an entirely disadvantage and thus lose talented staff with other Japanese multinationals. On the other hand, there is no new technical support that is only pay high licences fee to maintain production. Therefore, the executives of Elecdyne prepare to set up an international strategy, in order to solve the current predicament. The objectives of strategy include reducing cost of wages, to occupy more market share and technology innovation that around three different potential countries are the USA, China and France. This report shows that briefly explain and justify analytical actual situation of Elecdyne and the trends of international environment could impacted for the company. SWOT and PESTEL are necessary to use.
2. International environment
In 2008, the economy of world is facing severe challenges, in which the economic slowdown has been an indisputable fact (BBC 2009). The international financial crisis has caused great harm on economic of the USA and other developed. It is able to gradually spread to many emerging economies. Affected by the financial crisis, it decreased demand of consumer in the USA and the EU countries. Furthermore, it has negative affected the electronic products and the consumer spending has dropped significantly (Steve 2002, 172). Even if the global economy is continues to recover. However, the electronics products are increasingly important in daily life (Ashish 2006). The STEEP table will be used to analyze and predict the impact of global trends for Elecdyne in next five years.
In order to reduction labor costs shift production to lower cost countries, which means fewer people employed in Japan.
Modern society is very dependent on electronics. But also it has a negative impact on society. For example, the mobile phone makes it easier to communicate, but if people improper use of the phone (calling while driving) may increase the risk of accidents.
Computing and other electronics products are significantly for consumers spending (Ashish 2006).
Social media occupied increasingly investment for the ad spending. Such as, Facebook and Twitter (eMarketer 2013).
Electronic product design and engineering is a significant subject of majority famous universities in Japan. The students also aspire to become an outstanding electronics information engineer (Pradymna 2010).
Technology advances led to greater development of electronic products industry.
There is a solid infrastructure advantage of Japanese electronics industry (Office of Technology Assessment 1985).
According to IMF forecasts (Massimiliano et al 2008) that the world’s economic growth rate will drop to 3.7% in 2008 and decline further to 2.2% in 2009.
Consumer Electronics Association expects (2009) that global sales of consumer electronics will reach 2.5 billion units in 2009.
The costs of wages annual growth in Japan.
The electronic materials contain harmful substances and elements. That even using the correct solution which pollution of the environment is an unalterable fact. Such as, recycling, incineration and landfill (Menad et al 1998).
The Japanese government issued favorable policy for electronic industry (Peter & Luke 1999).
Table 1 STEEP analysis
The known fact was proposed that there is a financial crisis of globalization occurrence 2008. This crisis caused a profound