Question

Mystique Cosmetics: Nathan Dixon E-mail?

‐‐‐‐‐‐‐‐ Original message ‐‐‐‐‐‐‐‐

From: Nathan Dixon

Date: 6/1/18 9:30 AM

To: BOD CC: R. Dunne

Subject: Global Expansion Concern

Good morning,

It is with great trepidation that I write to you on this occasion. As you are all aware, the American Mystique Cosmetics is performing quite well with earnings on the increase and a stable workforce. In recent months, our respected President and CEO, whom I consider a dear and trusted friend, has steered our resources to expanding globally. What some of you may or may not know at this juncture is that he is looking towards establishing operations in either Japan or Germany.

Ladies and gentlemen, we are not a global enterprise. We are not built to operate in this manner. I have been part of this incredible organization for over 30 years and have witnessed unparalleled growth and expansion within our own glorious US country. We have recognized records profits; continued employment growth; environmental friendly products and the ability to provide profit sharing bonuses to our entire staff for the past 20 years. Expanding globally is going to be a crucial mistake and one that will require massive resources in terms of finances and manpower. It is my understanding that a new Global HR Director has been hired to evaluate the situation. While I do not disagree with this hiring, I do have to announce my voice of discontent in that our President and CEO is possibly no longer operating with the best interest of Mystique in mind. While it pains me to say that, I would like for each of you to strongly consider your vote when expanding to either Asia or Europe. Two countries we know nothing about. Two foreign lands that could very well not welcome us. The research is proven that other companies have tried and failed.

Thank you for your time and consideration.

Respectfully yours,

Question: Nathan Dixon, a board member for Mystique, wrote an email to the entire Board proclaiming his displeasure for the possible global expansion. Your job, as Global Director of HR, is to read the email and make a recommendation. As you read it, please share your thoughts on the following: a) what are your thoughts on the email? b) how should Mr. Dunne and Mystique respond? c) what would you do?

Answer 1

a)I can understand the concern of Mr. Nathan Dixon and the risks involved in such global expansion.He has rightly expressed his concern regarding lack of proper finance and manpower.As an experienced person who has been working in the organisation for over 30 years,his valuable opinions should be seriously addressed.However it is also mentioned that over last two decades, the business has recorded profits and continued employment growth.Therefore I believe that the right time for expansion is here and the company needs to evaluate the risks involved along with the resources available.With increasing competition it is always beneficial to expand in to new markets.It is mentioned that a new global HR director has been hired to evaluate the situation.A person with such expertise can certainly come up with a valid decision.Mr. Nathan Dixon has expressed his view as to the lack of understanding of cultures of both the places and the challenges hence involved.There are researches which proves failure of such expansions.Therefore his concern needs to be properly addressed by the top management.

b) Mr.Dunne the board member and other board members of Mystique Cosmetics should communicate with the organisation about the idea of expansion and the planning involved.They should educate the employees about the benefits of expanding in to new geographical markets.They should make the organisation understand that the decision is not going to be implemented immediately and an experienced person has been appointed to evalute the same.The growth of the company over last decades is promsing enough to make expansion and globalisation is inevitable for its sustained growth.Therefore proper planning is to be done before jumping in to any conclusions.The employees should understand the fact that the decision have not been implemented and it is just the preliminary analysis that is going on.The company would not make any critical decison before comapring the cost-benefit involved and cause any harm to manpower and the stability of the organisation.

c)My take on such dilemma would involve analysis of many factors.They are:-

1.Market Landscape

What is the current market environment in your sector in the new market? Is the economy comparable to the one you are currently operating in, or is it better or worse? By assessing the economic climate in your sector, you can gauge the earning potential of your brand in the potential market. What about competition? What is the current competitive climate? Who are the big players, and what are their unique selling propositions and success rates? Competition is a good thing, as it signifies demand. When assessing the climate of competition, be sure that the level of competition is not too high or near saturation, leaving little room for the introduction of new players

2.Cultural Understanding

Expanding in to markets with conflicting cultures is very crucial.Every country has its own culture, both socially and professionally. No matter which country you choose to start in, there will be a learning curve to adapt to the norms of doing business there. It will also be important to understand the consumer, as you work with your franchisee to build marketing strategies and materials. For most of us, this is one of the reasons we have chosen to enter an international market through franchising. At the same time, before we choose to enter a market, we owe it to our franchisees and to ourselves to do our research. Consider starting in a country where you and your team have a higher understanding of how business is conducted in that culture.

3.Logistics Management

What will it take to operate your business overseas? A physical location? Equipment? Materials? Shipping and logistics? If your business is going to exist beyond e-commerce, you’ll need to create a plan for procuring the resources you’ll need at your new location.

4.Manpower and talent

Skilled manpower are the valuable assets of any organisation and should be recruited with utmost care.The potential of relocating talent from your home country to work overseas should be evaluated as well.

5.Currency Fluctuations

If you will be selling in a different currency, you’ll need some knowledge about how to appropriately price your products and services. You should also look into banking options that can help you manage your new form of money.Make sure you account for conversion costs when creating your pricing strategy.

6.Marketing

A suitable marketing startegy shoul be developed to penetrate in to the market and compete with local players.There has been many failures recorded due to poor marketing.For example,Chevy’s Nova probably didn’t sell well in Mexico, since the name, in Spanish, directly translates into “No Go.” Gerber sold baby food in Ethiopia with images of babies on the jars, not realizing that, because of Ethiopia’s low literacy rate, food typically shows images of what’s inside the package.

7.Planning

This is the foremost step before making any crucial decision.Planning is inevitable to understand the pros and cons of any decision.

I would suggest Mystique Cosmetics to craft a proper stategy that would use the inherent strenghts of the organisation to take advantage of the opportunities and ward off threats.The company has rightly taken the first move by appointing an expert to evaluate the situations.The company is in the right path and should further progress by analysing the risks involved before making an appropriate decision.

The company can learn from some of these successful corporate expansions:-

1.Lego

The Danish toy maker leveraged strong company culture and a rock-solid brand to obtain the capital needed for expansion. The company remained centered on one of their core beliefs: Creativity and building are common to all children.Expanding into America, exceptional U.S. sales drove the marketing team to deploy the same marketing and promotional concepts elsewhere. Lego quickly realized other countries reacted unfavorably to American-style bonus packs and gift promotions. It wasn’t until after the failure of some of the programs that the management team began to research the specifics of what consumer perceptions were in the target market and how to exploit them in Lego’s favor.Like many successful global companies, Lego had a strong base product with long-term consumer loyalty. Parents who loved Lego as a child introduced their children to the popular toy.The global popularity of the Lego Batman movies has helped boost the brand’s image and recognition across the globe.

2. Coco Cola

The original Coca Cola was invented in 1886 by a pharmacist named John Pemberton. The company was not incorporated, however, until 1892 by another pharmacist named Asa Candler. Candler purchased the Coca-Cola brand and formula in 1889. In recent years the soda industry has been the source of much negative focus. For many companies this has had a significant backlash. The Coca-Cola brand, however, has managed to maintain its standing at the top of the industry. Although Coca-Cola manufactures sodas, it also manufactures other beverages and non-alcoholic drinks. In fact, in addition to Coca-Cola, there are also 500 additional brands, including Sprite, Tab, Nestea, Minute Maid, Dasani water, and Powerade, that fall beneath the umbrella of the Coca-Cola brand.

The company's success is largely due to branding and smart marketing. It has, nearly from the beginning, marketed itself as an All-American company and a major part of Americana. Today Coca-Cola is considered an American icon. It's unique taste and secret formula are a part of what makes it different from its competitors; however, the highly successful marketing of the Coca-Cola brand is the main factor which makes it stand apart from other beverage companies.

3.Amazon

In 1994 Amazon was founded by Jeff Bezos. Amazon is an online retail company that sells products such as books, e-books, electronics, Kindle e-book readers and tablets. It is considered the largest online retailer in the world. Amazon owes most of its success to its immense selection of products at competitive prices. Their success is also due in part to the success of the Amazon Kindle, which is the leading e-book reader. In addition to the United States, Amazon also has retail websites specifically for the UK, Canada, Japan, China, France, and several other countries. Since 1998 Amazon has also acquired a number of other Internet-based companies including ShopBop, Zappos, BookSurge, Audible, Box Office Mojo, and AbeBooks, to name a few.

Amazon is unlike any other retail site. It differs from its competitors in that customers have numerous options when shopping on the Amazon website. When compared to other book sellers for example, Amazon offers features that other book sellers do not. The Amazon Prime program offers numerous perks, such as allowing members to "rent" e-books for a short period. Amazon customers may also shop from a huge assortment of items, and even download and watch television programs or movies. In terms of the Amazon's Kindle/Kindle Fire and Apple's iPad, the difference is in the way that the company makes money. Amazon strives to make money more from sales after the sale of the Kindle device than the actual selling of the reader itself. For example, people who purchase the Kindle will continue to purchase e-books through Amazon. Their Kindle e-book software runs on a wide variety of platforms, including the PC, Apple's Macintosh and iPad, and Google Android-based tablet PCs.