Setting up Springfield Firearms Company in Croatia
Croatia is a country in central and southeastern Europe at the crossroads of the Adriatic Sea. Its capital city Zagreb is also the largest city in that country. The Republic of Croatia is a member of the United Nations, as well as Council of Europe and the World Trade Organization. This country is classified as an emerging and developing economy by the International Monetary Fund and as a high-income economy by the World Bank. These classifications make Croatia a desirable venue for most business opportunities including firearms manufacturing plants. Other than the country providing adequate resources and facilities for the industry, more employment opportunities, will be created for locals as well as income generation thus contributing to the growth of the economy. Presence of the company in Croatia will also enhance better relations between Croatia and the Unites Sates of America.
The internal environment in readiness of the Springfield Armory launch
Springfield Firearms Company is ready for the launch of the Croatia manufacturing plant
as the major preparations and legal formalities have been dealt with in details. Below are some of the key features that have been analyzed and thoroughly counterchecked.
Springfield Firearms Company has developed a clear planning stage that involves buying an already operating armory in Croatia and developing it according to the values and principles of Springfield. After analyzing the financial position of the company, the management was able to set aside some finances that will be used in the purchasing of the new plant. One crucial aspect that prompted the purchasing of a new plant rather than leasing is the expected increased productivity from the new plant such that the finances will be recovered within no time. Thorough technological analysis also contributed to the planning process as the company will be able to apply advanced technology to increase the quality of the arms. The marketing opportunities in Croatia are also unexploited and with the manufacturing plant being in that country, the prices of the arms will be lower hence more sales. This strategy gives Springfield more confidence to venture into the new market.
Initially Springfield will incorporate some of their top management from the mother company who will provide on the job training to the junior employees hired from Croatia. After the new plant picks up, it will be time for to allow more natives into the management. This will give a chance for the locals to acquaint themselves with the values and principles present at Springfield. It will also provide a better chance for the company to establish more local connections and stabilize its operations before other procedures are undertaken (Harzing and Ruysseveldt, 2005).
Every business must possess a strategy way in which its activities will be handled and the manner in which the responsibilities are assigned out to each and everyone. Concerning the function of organizing at Springfield, the mandate will be given to existing heads of departments to ensure that the responsibilities of the members who will shift to Croatia are delegated to the appropriate individuals. This will minimize chances of interruptions and paralysis of departments. However, activities of the Croatia plant will be organized from the parent company and all employees and transactions will be dealt with from the main company.
Implementation of major departmental policies and projects will be conducted at the headquarters. This will ensure that allocation of resources is even as well as division of labor. The strategies employed during implementation will have to obtain approval from the top management so that feasible ideas and projects may be done with before they are implemented.
The overall control of activities and transactions of the new plant will be a responsibility of the existing plant and only after the Croatia plant has successfully gone through the earlier stages of picking up when independent control will be allowed. The application of collective control will significantly help in harmonizing operations, in all regions, as well as making it easier to monitor the progress of the Croatia plant (Harzing, 2005).
Effects of the Business Environment in Croatia
The business environment will enhance launching of the Springfield Company as well as promote production of firearms. There are a number of factors and features that make the business environment in Croatia quite impressive for launching the firearms business. One of the key features of the business environment that will make the launch of Springfield Armory in Croatia a success is the increased development of infrastructures and other facilities which make business transaction easier (Croatia, 2010a). The transportation system in Croatia is undergoing modification to modernize it such that transportation of raw materials and finished products will not be a costly task. The communication systems are also more advanced with a majority of the regions being connected to the Internet such that the marketing team will do a lot of online marketing of the arms rather than physical. The manufacturing plant, which Springfield will, acquire is located in the outskirts of the capital due to the nature of emissions from firearms manufacture thus any legislations concerning location are well catered for as the area is hardly inhabited (Croatia, 2010a).
The business operation hours for most public institutions are also another incentive towards the successful launch of Springfield Firearms Company plant. Most of the financial institutions open on weekdays from 7.00 AM to 7.00 PM while on Saturdays they are opened from 7.00 AM to 12AM. This gives the accounts department ample time to carry out their financial transactions throughout the day and even on Saturdays. Financial transactions that are not completed during the week can be finalized over the weekends. The privatization of major local and foreign banks in Croatia created a major financial boom to the industry by increasing the efficiency of these institutions. Public administrations remain open on weekdays only from9.00 AM TO 5.00 PM. This gives ample time for sealing various deals and formalizing our operations in that country. However, business operation hours for other sectors are not defined because some have longer hours like in the Springfield case where the management is set to introduce twenty four working hours so that the number of firearms produced per day is increased (Croatian Ministry of Economy and Finance, 2008).
The major business activity in Croatia is in the agriculture sector. This sector contributed almost 6.62% of the total creation GDP in 2006. More than a third of the country is covered with forests with the industrial sector being largely involved in textiles, iron and aluminum and food processing. The tourism industry is also full blown. This leads to a huge discrepancy in the firearms industry as they are very few companies involved firearm manufacture. This creates a wider market as well as a whole lot of new business ideas and products. This industry has few players while the demand for firearms is very high not only in Croatia which is being faced by political instability but also globally. Thus, this is a great opportunity for Springfield to exploit a market which few are interested in venturing (Croatian Ministry of Economy and Finance, 2008).
Similarly, the fact that Croatia joined the World Trade Organization and plans to join the European Union have already been finalized thus, exploring the international market will not be a problem. Croatia depends on foreign trade especially with Germany, Italy and Bosnia. These countries have high-crime rates and most of the citizens prefer moving around in the possession of either pistols or revolvers. Thus, this is an automatic market for our products and with the assistance of the parent Springfield the Croatian plant will be able to successfully launch its products to these countries.
Over the years the Croatian government has been encouraging the establishment and development of private businesses to increase growth of the private sector. Springfield Firearms Company being a private enterprise will thus be acknowledged and given maximum support by the government to ensure that its launch is successful. The amount of support that will be accorded by the government makes the business environment conducive for Springfield to launch its armory (Croatia snapshots, 2008).
The other key feature of the creation business environment that will make launching of Springfield successful is the establishment of the Croatia Country Assistance Strategy (2004). This strategy aims at significantly reducing the distractive and regulatory barriers to the processes involved when foreign investors are entering the Croatian market. This minimizes the bureaucratic procedures involved when establishing new business adventure.
The cultural environment
The cultural aspect of Croatians has little or no effect on production of firearms because the industry is not new as Springfield is acquiring a company that has been producing firearms. Thus, the business has been present all along but now the ownership and operations will change hands. A large population of the Croatians is made up of Roman Catholics who value peace and respect for human life. According to (Croatia, 2010b) as long as the products that are produced in a specific area do no directly or indirectly affect the health of health, then there is no questioning its existence. The fact that firearms have been produced in that country for a very long period without adverse effects on the entire population shows that Springfield will experience no problem in its operations.
The cultural environment will have minimal effects on the production of firearms by Springfield because initially, the Croatians have been importing rifles and pistols from other countries. Thus, with the availability of a local market, the prices will be lower hence they may start buying the same from Springfield (Croatia, 2010b).
Impact of importing/exporting on product
The processes of importing and exporting is very important to the operations of Springfield in that the company will be importing different raw material for the manufacture of firearms and later on export them to a country which might be in need of them. The fact that Croatia is poor in terms of mineral deposits and metal resources makes the option of importing metal alloys an appealing deal for Springfield. Therefore, Springfield will have to indulge in the importation of the various raw materials from other countries so that the new company may have the appropriate resources for operation. The extra materials as well as those which have been processed can then be sold to countries which are unable to access them in their production process. This will be a double business opportunity for Springfield as well as a major boost to revenue generated for Croatia (Croatia, 2010c).
Lack of a broad market for firearms in Croatia will require that an international market is sought so that the arms can be sold. Exportation of the finished products will thus be an essential component for marketing our products. However, there is a ready and intensive market for firearms in the international market such that with the support of the Croatian government Springfield will not experience exportation problems.
Other than the importation of raw materials and metal alloys, Springfield will also import human capital during the early stages of growth in the new plant. Top management officials and various personnel will be shifted from the parent Springfield to the Croatian plant so that the launch may be successful. This will also enhance a smooth transition as the seasoned staff will be able to train new individuals on the operations at Springfield. Alternatively, human resources will be exported to the older manufacturing plant so that they can familiarize with the environment and principles of the company (Croatia snapshots, 2008).
Strategic alliances entry mode
Application of strategic alliances would prove quiet worthwhile for Springfield initially during the launching period as its activities will still be under the parent plant. However, this will be for only a short period of time as at some point the locals will be given a chance to run the company. The strategic alliance with the mother company will enable the young plant to penetrate the Croatian/international market without being confronted by other mainstream armory companies. One thing that makes the strategic alliance a better entry mode is due to the fact that the parent Springfield enjoys a very wide market share for its arms and the same market could be extended for the new company. As this strategic alliance will only be temporary, once the Croatian plant is able to sustain and maintain its own activities, the alliance will be dissolved as the objective will have been accomplished at that time (Croatia, 2010c). With the strategic alliance, Springfield will be able to increase its productivity as well as the market share for various firearms.
Alternatively, Springfield may form strategic alliances with the other arm manufacturing companies in Croatia such that the existing plants in that country will work hand in hand with the new establishment to create room for a wider market. A significant disadvantage of this form of an alliance is that most companies that are involved in the same industry may be rivals and the most unlikely business partner is a rival. Competition is what drives rival companies and chances of forming an alliance may be minimal.
International finance modifications
International finance may prove to be a problem in the new plant as features such as the form of currency and rates of payment may be quite different from that the management is used to in the home country. Availability of grants from the Croatian government or other international bodies may also require some modifications. However, trading in the common markets such as the European Union and the World Trade Organization may minimize the modifications. This is because in the common markets, the form of currency is always common to all. The rates of exchange are also similar and equal such that a newcomer will not face intense challenges (Croatia snapshots, 2008). The World Bank has always supported new business ventures such as the Springfield case and in such cases, funding may be provided for the business enterprise. However, this only applies to some countries which are given grants while others are not considered. It is therefore, upon the management of Springfield to look into the different international finance rates and policies so that they understand the situation to avoid conflicts in the near future (Croatian Ministry of Economy and Finance, 2008).
Modifications in the international human resource management
International human resource management resource will be another area that Springfield should look at as the hiring and firing procedures are not constant in different countries. In some countries the law does not allow women to work in some industries due to healthy problems as a result of being in contact with harmful chemicals. The policies on international companies are different from those of local companies. After launching of the Springfield plant in Croatia, the company will achieve new status to being a multinational company. It is also important to note that international human resource management employs different criteria in hiring expatriates especially in multinational companies (Harzing, 2005). Adjustments should thus, be made in Springfield to absorb and understand various policies to avoid conflicts with the Croatian government.
Croatia is a young country which is still developing such that it may prove quite a challenge to get the required human resources for the firearms industry. This may be a source of conflict as a company operating in Croatians soil may lack even one individual in management of the company. Thus, the theory of best practice may help solve this issue such that some sort of on-the-job training is offered to the locals to curb discrimination.
After analyzing the major hurdles and opportunities that are presented with the launch of Springfield Firearms Company in Croatia, it would be worth to conclude that the opportunities and benefits portrayed outrank the challenges. The Croatian government and Springfield as a company will gain substantially from the launch in different ways.
The locals of Croatia will gain as more employment opportunities will be availed to them. Therefore, the launch and development of a new Springfield manufacturing plant will be an impressive success.
Croatia (2010b), Croatia political outline. Retrieved from: www.kwintessential.co.uk/resources/global.../croatia.html
Croatia,(2010c), Ministry of Economy and Finance. Retrieved from: www.impactalliance.org/ev_en.php?ID=49144_201&ID2=DO
Croatia snapshots (2008), Business environment snapshots. Retrieved from: ru.worldbank.org/BESnapshots/Croatia/default.asp
Harzing,A.W. ad Ruysseveldt, J. (2005), International human resource management. 2nd edition. London: Sage Publications.