In preparing a Business Plan, it is a must to know the condition and situation of the country to which your business is situated. In such a way that the demand of the public in a certain State is best suited and the capital investment is not put into risk. In this case, a focus to a certain country matter. One good example is the condition of the Politics and Economy of France.
France’s Government and Economy
The country where the most famous Eiffel Tower is situated is no other than France. Its country’s capital is Paris. The third largest independent European nation and the center of a large overseas administration found in Western Europe. France has started playing its major role in world events since 17th century. It has experienced numerous crises, including the devastation of two world wars, political and social upheavals. It has, however, survived and emerged from the ruins of World War II to become an important world supplier of agricultural and industrial products and a major partner in the European Community (EC, or Common Market). At present, France is at the forefront of European states seeking to exploit the momentum of monetary union to advance the creation of a more unified and capable European defense and security apparatus. ()
From the general description above, a country France seemed to be good for business setting. The stability of the government, politics and business arena has been tested from the past centuries. From downfall, it rises back to life. This is a sign of a strong republic.
A glimpse to France’s Economy
In the midst of France Transitory period, from a well-to-do modern economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms. The Socialist-led government partially or fully privatized many large companies, banks, and insurers, but the government retains controlling stakes in several leading firms. The leaders remained committed to capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. Though the current government has lowered income taxes and introduced measures to boost employment, business investment remains listless because of low rates of capital utilization, sluggish demand, high debt, and the steep cost of capital.
As to its Gross Domestic Product (GDP): Purchasing power parity is One trillion six hundred billion and sixty-one million Dollars (.661 trillion). However, the Public Debt amounted to 68.8% of the GDP. This includes that the GDP per capita reaches up to Twenty Seven Thousand Six Hundred (,600 purchasing power parity), while the GDP real growth rate is 0.5%. Furthermore, GDP by composition sector as estimated in the year 2003 are as follows: agriculture got the lowest percentage of 2.7 %; this is followed by the industry which is 24.4%; and the services got the highest percentage of 72.9%. All facts mentioned above were estimated as of the year 2003. ()
This GDP represents the nation’s total economic output. The percentages enumerated above would give a guide for the economists or businessmen on what businesses France is suited for. From its statistics, it is best for giving services.
With regard to its industry status, France will suffice if given more support and enough effort. Machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, tourism are the industries most commonly found in that certain country.
Employment Rate
For more than sixty million population rate in France, the unemployment rate reaches up to 9.7%, while the labor force is 27.39 million as of 2003. ()
This means that employment rate is much higher. This is one of the proofs of the country’s richness. The unemployment rate of France shows that most the French Nationals are working. This is one factor that reads the economic status of the country. This is a sign that French government is really working for the welfare of its citizens.
Currency
France currency is called Euro (EUR). It should be noted that on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries. One Euro (1 EUR) is equivalent to 0.8886 U.S. dollar as of 2003. () It means, that there currency rate is high and so far, they did not suffer deflation.
Inflation
Inflation rate in France is 2.1%. The current account balance as of the year 2003 is 13.8 billion. ()
According to (Director of the Vossiche Zeitung ): “If we had an active balance of payments it would be a matter of indifferenct whether the accounts of the State showed a deficit or not, as it would also be a matter of indifference whether this deficit were covered by loans or by an increase in the floating debt or by any other means.” ().
Engineering Industry in France and China
The engineering industry is diverse and complex. It covers a wide range of activities, including mechanical engineering, metal goods, electrical engineering, electronics, instruments, motor vehicles, aerospace, and other transport equipment, covering a multiplicity of products and processes (1986). Some of these activities are more closely linked to industries outside engineering than they are to other activities within engineering itself. Some sectors have been in rapid decline in recent years, while others have grown, such that an aggregate overview may disguise differing trends in the various parts of the engineering industry.
The France engineering industry is at a particular turning point in a prolonged crisis. The competitive environment for engineering firms is not just that of market downturn during a recession (1990). It is one in which a number of major changes coincide and interact: the global diffusion of new technological and organizational norms; the impact of European inte- gration; gration; the end of the Cold War and defense procurement restructuring; and the pursual of neo-liberal government policies in the France. This is therefore a period of strategic change, in which the impacts of such major structural changes in the competitive environment tend to overwhelm the on-going processes of technological change, organizational evolution, and product change.
While in China, the engineering industry gives the advancement of technology and equipment to the different sectors of the national economy. It also determines the phase of China’s industrialization (2006). There were 100,000 construction companies employing 12 million workers and a production value of 120 million RMB or 25% of total industrial output value. These companies yield different types of equipment, from agricultural machines to precision instruments, bringing in 80% of China’s fundamental industries. The main mistakes in the engineering industry in China are its low rank of specialization and technical skill, as well as glut idleness in production, yielding to a waste of raw materials and resources. Engineering enterprises were focused mostly in Liaoning and Shanghai, however, expansion was swift in Inner Mongolia, Shaanxi, Gansu, Ningxia, Qinghai, Xinjiang, Anhui, Zhejiang, Fujian, Jiangxi, Henan, Guangxi, Yunnan, and Guizhou. With the exemption of Tibet, every province had, to some extent, a capability for engineering.
In France, company responses to change of course vary greatly, especially in such a complex and diffuse industry as engineering (1991). Virtually all companies are aiming to enhance their competitiveness, cut unnecessary costs, and increase their profits. Strategies adopted to meet these aims vary, and a clear distinction is discernible between those companies merely reacting to change in order to survive, and those who are employing proactive changes in an attempt to meet desired objectives
Within the engineering industry of France the interaction between product and process technology may have important consequences. For instance, the shift from electrical to electronic components, and from metal to plastic products, are resulting in major process changes (1983). These include a reduction in the significance of manufacturing itself within the overall production process. These same developments have important implications for skills development and training. Many of the skills for which employers reported ‘shortages’ and/or ‘recruitment difficulties’ were those related to new technologies or new ways of using existing technologies.
In functional terms there is evidence for ‘the galvanisation of employment’ as traditional occupational divisions and demarcations become increasingly redundant in the engineering industry of France. However, despite the increase in emphasis on ‘intermediate’ skills or ‘technician’ occupations, in many instances the strategy adopted to achieve functional flexibility involves the ‘training up’ of operatives to perform specific tasks previously undertaken by a skilled craftsman, rather than the provision of a more general training which might equip the individual with the full range of skills normally associated with the traditional engineering craftsman (1986). Such a wide-ranging training may not be necessary in order to meet the narrower objective of enabling workers to undertake a variety of tasks, and to therefore achieve faster production response times. In turn, in numerical terms there is evidence for the increasing use of fixed-term contracts, casual and temporary working, with many companies developing registers of workers to be called upon in accordance with production needs. Hence, for many of those working in the engineering industry, ‘flexibility’ means deterioration in the quality of employment.
Although in France, most engineering companies predicted no change in employment levels over the short and medium term, or predicted a continuation of job losses, there was a general recognition of the importance of continuing investment in training in order to maintain and enhance competitiveness. Training is most prevalent among large employers, so the demise of large engineering firms has significant implications for the numbers of individuals receiving training, and for the training infrastructure (1990). The combination of a number of the trends discussed above is tending to produce a marked change in the firm structure of the engineering industry, as both big firms, and weaker small firms, have experienced serious problems. Processes of decentralization are taking place both within big firms and from big firms to suppliers, in order to offload or spread risk, while the weaker small firms are going to the wall (Dunning, 1983).
While medium-sized firms are themselves not exempt from the pressures of a more competitive environment, there is a discernible tendency for the characteristic unit of production to become the medium-sized enterprise or the autonomous division of a bigger firm ( 1990). This has interesting implications for the future of the engineering industry, because it entails a weakening of the hegemonic role previously played by a relatively small number of very large firms. Strategic decision making in the industry may be becoming more diffused among wider and weaker policy networks.
On the other hand in China, small engineering enterprises are also distributed in communities and teams throughout the country ( 2006). These companies main job was the produce and repair of machine tools, helping mostly rural industry and agriculture. The production of these industries was 522,000 pieces of farm machinery, 142,000 machine-drawn farm tools, 719.14 million fittings, and 374.15 million other farm tools. Moreover, 34,000 metal-cutting machine tools and automobile fittings valued at RMB 800 million were produced ( 2006). These small companies provide development of the tactically significant rear areas of the country. China’s engineering industry is currently facing its biggest problem such as lack of large, precision, numerically controlled, highly efficient machine tools. The industry concentrate on main machinery, so secondary machinery and appropriateness remain in short supply. For the most part, the engineering industry has serviced the heavy industry.
The Gist of this Report in Connection with the Proposed Business Plan
Every country around the world has its distinct characteristics. One country may be said to be deprived from the richness on earth and opportunities in the global competition. Despite such fact, there is always a room for improvement. In the business world, where competition is inevitable, good if not cunning strategy is needed. Proper management and efficiency are needed wherever country you planned to establish your business.
In establishing business in France, Services has a high demand. Putting up Industries may also suffice by due perseverance. Since labor force in France gets a high percentage, proper dealings with wages and salaries to the laborers maybe one of the factors that could give a booming industry. The compensable salaries will give them motivating force to do well in their assigned task. Say for example, in the engineering industry, where payment by results takes the form, not of formal price lists, but of mutuality, account must be taken of the facts, first that the proportion of piece-workers to time-workers may alter over a period of years, and secondly that the ratio of average piece-work earnings to the corresponding time-rates may alter, either because the employers deliberately adopt a new standard ratio, or because the workers’ rate of output changes. ( 1998).
PESTEL Analysis
To be specific, political issues that concerns the business includes: the objective to limit access on information; the campaign of certain countries to eliminate those in business to operate, are these engineering companies both in France and China are being operated under the law and policies of their government? How these companies operate according to the policies of each region especially in China?
The economic issue that concerns the business on the other hand is the production of the engineering industry particularly in China and France because more and more people are dealing within this industry. Moreover, the stiff competition of the business on other countries has forced some to close down. The downturn of the business in the economic scene is evident for many.
In the societal issue on the other hand, from the perspectives of engineers, social issues are complicated as political issues and it is quite a mess in the industry. The engineering industry has a great deal to offer in serving the public, may they be government employees or consultants of the government. This issue should be addressed especially by the engineering industry in China, because Chinese society is much more traditional than France.
Technological issue basically concerns about the upgrade and maintenance and development of the engineering industry of France and China. The owner of these companies should be updated with the latest technologies or else their companies will be left behind by others who constantly upgrade their system. Furthermore, the owner should figure out the fastest technological advancement available as possible. (2004).
The environmental issue that can be linked with the engineering industry is its position or its initiative to promote clean environment to their prospective regions that they are operating. In developing countries, some people are not disciplined enough to put their trash in the right place. This can harm the environment where the engineering company is operating. Thus, it is their responsibility to promote cleanliness to their countries.
Basically, concerning legal issues, engineering business is known to have operators lacking business licenses for instance in China. Moreover, certain legal issues are the laxity of the engineering industry in China in preserving the environment.
SWOT Analysis
The strength of the industry lies in the needs of France and China in development of their economy. The engineering industry is one of the most lucrative businesses in these countries. It yields almost 50% of the economic profits of both countries. Moreover, one indicator of a country’s economic development is a good quality and high end infrastructure.
The weakness of the industry is its confusing legal rules in constructing and the use of technology. Furthermore, other weakness of the industry is the stiff competition. Because of this “neck to neck” competition, most business has been shut down. Also, the industry attracts too much attention to certain governments because it provides access to information around the globe.
In regards to opportunities, the engineering industry in first world country like France and developing country like China yields more prospective profits because of both country’s objectives of more economic development projects such as infrastructure, manufacturing and equipments and technological advancement.
Threat in the business includes competitors from other industries such as the engineering industry which is often a subordinate of the government. Furthermore, other threat on the business includes the legal issues that have long been imposed on the business, as it could affect its normal operation.
Strategic Planning
Pricing
Pricing is an incredible marketing tool. Knowing the exact price these engineering companies should charge would means the difference between financial losses, mediocre sales, or huge increases in revenues. The reason why so many products fail or produce is because business owners, corporations and marketers do not know the exact right price to charge before a launch, after a launch, or what to change the price to when there are many new competitors, not to mention the stiff competition being faced by business nowadays.
One of the elements in marketing mix is price (2004). This is important strategic issue because it is associated to product positioning. Additionally it influences other marketing mix elements such as channel decisions, product features and promotion. While there is no single guidelines and methods to establish and resolve pricing, the following is a all-purpose procedure of steps that might be followed for developing the pricing of a new product: First is develop marketing strategy. This means that one has to perform marketing analysis, segmentation, targeting and positioning. Second, make a marketing mix decision which involves defining the product, distribution and promotional tactics. Third, is estimating the demand curve. This means to understand how quantity demanded varies with price. Fourth, calculate cost which includes fixed and variable costs associated with the product. Fifth, understands environmental factors and evaluate likely competitor actions, understand legal constraints, etc. Sixth, set pricing objectives like profit maximization, revenue maximization or price stabilization (status quo). Lastly but not the least, determine pricing using information collected in the above steps, select a pricing method, develop pricing structure and define discounts.
Product Policy
Organizations operating in multiple locations across the globe have to give attention to their product planning policies. The fine distinction of customer behavior and customer likes and dislikes diverge across cultures. Furthermore, different cultures support different kinds of lifestyles. This is also important in order to determine whether the product is safer to the environment and to the consumers using it. Creating products need careful consideration and has to inform the consumers about the strategy being adapted to the product and how it is implemented. Product policy includes information’s and guidelines in using the products.
Place
Distribution is also vital in the marketing world. This is all about getting the product and services to the right people at the right time with special consideration for profit and effectiveness (2005). Successful marketing does not end when a business has created a product or service and has found its suitable target audience with a view to selling it at the right price. The next concern that needs to be faced is how they are going to distribute and market this product or service to the customers. When a product or service is acquired and bought by a consumer, it may have been purchased directly from the business or it may have been through a number of intermediaries which includes wholesaler, retailer etc. which are also known and called as the channels of distribution. Businesses, big and small alike need to concede the various types of distribution channels to exploit sales potential. Moreover, distribution channels are induced for the most part by the type and size of the business and so some of the channels explained may not be viable and possible for a finicky and fastidious business. As a result, these channels could be espoused in the future to accommodate for any changes and to help business grow and develop in the incoming future. Intermediaries and selling methods includes direct on-site which is very common for small business, products and services (Marketing and sales). This can be sold directly to the consumer directly from shop, office or home by consumers physically coming into the area to make a purchase. Another intermediaries or selling method is direct mail, which is also known as a mail shot. This type of marketing can produce sales on local, national or even global, scale. Its methods involve send out flyers, leaflets, brochures or catalogues and often target to particular consumers to selling the product or service. Another type is the telemarketing which is done through the phone and e-commerce with the aid of the internet.
Promotion
Catching the attention and keeping lucrative and cost-effective customer relationship is by no means easy. Today, however, shielding, defending and increasing the economic value of the customer franchise seem even arduous and grueling. Novel industry dynamics, altering customer demographics and minimized or insufficient or derisory marketing resources present executives with more intricacies, more ambiguity and more threats. Basically customer relationship management is an information industry term for methodologies and internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner (WhatIs, 2005). Customer relationship management includes aiding an enterprise to enable its marketing departments to distinguish and make out and at the same time target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. It also involves assisting the organization to improve telesales, account and sales management by optimizing information shared by multiple employees and streamlining existing processes. Then, allowing the information of individualized relationship with customers, with the aim of improving customer satisfaction and maximizing profits, identifying the most profitable customers and providing them the highest level of service. Lastly, customer relationship management involves providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationship between the company, its customer base and distribution partners.
Conclusion
Therefore, the efficient skills in running the business, the enough capital investment, proper management and the favorable state’s situation in politics, security and economy are the factors to be considered of to have a successful and profitable business.
Quite useful
useful
Credit:ivythesis.typepad.com
0 comments:
Post a Comment