ENTREPRENEURSHIP IN EURO ASIA: GROUP ASSIGNMENT
Taking a look at the companies that are getting popularity in the field of shipping, undoubtedly Norden Corporation is doing best. For decades, it has been doing business in various countries and it is planning to expand its business to India. In the European market, it has a great deal of experience but now taking a look at the international market, it is becoming more interested in exporting products into India. Making a perfect business plan for launching a business in India is the need of the hour for Norden as its competitors are securing strong positions in the shipping market. While making a business plan, there are certain things that need to be focused. Cultural must be kept in consideration as there is a huge gap between the European and Asian cultures. While making a plan for launching a business in Norden, the team needs to pay special attention to the frameworks, business strategies and concepts along with theories that must be implemented for launching a successful start of international business plan (Aarland et al., 2018). Circumstances are different in European and Asian countries, so keeping this fact in mind, potential analysis of economic, political and legal conditions is necessary. It is not compulsory that products that are launched and running successfully in European countries are going to equally popular in India. Business ideas being proposed by the team for India would be having different operations (Andrikopoulos et al., 2019). There is a need to make different strategies depending upon the operations to be introduced, analysis and products that are planned to be launched in India. The central focus of this company is to launch the shorter-term agile management and operator activities while focusing on the reduction of long term cyclical exposure, as experts believe that return opportunity, as well as risk, is higher for this corporation.
Norden Corporation is a Danish shipping company that operates in the tanker segment and dry cargo worldwide. It is interesting to note that Norden Corporation is one of the oldest shipping companies, founded by Mads Christian Holm in 1871. This company mainly deals in dry cargo and tanker and was named after the name of its first vessel, a Glasgow built steamship. It is operating in various countries and has offices in countries like i.e. Shanghai, Annapolis, Rio de Janeiro, Melbourne, Vancouver and Singapore. Its head office is based in Hellerup (Copenhagen) Denmark. One of the central areas of focus of Norden Machinery for almost the last 80 years is advancing then tube filling system. There are different products that Norden deals in and it has been seen that India is one of the countries that are getting the attention of the Norden Corporation (Farley et al., 2019). Though it is one of the leading shipping companies since 2002 DS RORM has become its rival that tried to take over, almost TORM got 33% hold of Norden but still, this attempt was unsuccessful. Since 1884, Norden became the founding member of Danish Ship-owners Association. It is also a member of multiple international organizations i.e. Intertanko, ICC and BIMCO.
Economic, political and legal analysis of the potential trading country
For Norden Corporation, who is interested in exporting its product in the Indian market, it has to do an in-depth economic analysis of both the countries (India and Denmark). Economic conditions of the potential trading country are important for making an effective design how business is going to be launched in the host country (India), which market is going to be a target, what are the economic crisis and strengthens of the targeted market and making beforehand plans regarding the risk management. In international business, Economic planning and analysis both are regarded as a technique of managing an economy (Pham et al., 2019, p.9). There are various sources that make the structure of an economy complex and undoubtedly in very economically developing countries i.e. India that could be witnessed a number of challenges that Norden needs to keep into consideration. Indian economy is the world’s seven largest economies if looked upon from nominal GDP perspective. Indian economy is also third-largest economy by purchasing power parity.
Economic analysis of shipping business in India showed that it one of the emerging stars in the shipping business in Asia as almost 70% value of 95% trade is done by shipping. Norden became interested in expanding its business to India because 12 major and 187 non-major ports are there in India and in near future India would emerge as one of the biggest names in the shipping business. Cargo traffic ratio in India, in 2015 was recorded 1052 million Metric Tons (MMT). Because of its strong partnerships and democracy, a fast-growing India economy is expected to become one of the three top economic powers of the world in the coming 10-15 years. There is no doubt that shipping business is essential for the development of economic activities as international trade no matter with which country, needs ships to fork transporting cargoes to the place of consumption from the place of production.
It is the basics of business that no company wants to invest money at such a place where it is not going to have profit. The basic aim of expanding Norden Corporation’s business to India is that it wants to gain 100% profits as it needs to compete with its competitors in the market. India on an individual basis is going good in the shipping and trading industry so expansion of Norden Corporation’s business as the economy of India would prove supportive shipping and trading business. According to the reports, during FY18, the cargo traffic was around 679.36 million Metric Tons (MT).In 2019, there was reported an increase in the cargo traffic and profit was increased by 2.90 per cent year on year.
For strengthening the Indian economy, the government of India is taking great initiatives that would contribute a lot in making it stronger. Interim Union Budget was announced by Union Minister for Finance for 2019-2020. GDP of India is expected to reach 6 trillion dollars by FY 27 that would support its globalization program. Norden could double its profit, it starts a business in India as India is mainly dependent on the import of crude at international level so it needs a large amount of both crude and gas carriers. It is interesting to note that Indian carriers operate only a few container ships unlike carriers used globally. So, using the business theories and framework that would best suit the strategies and operation of Norden Corporation, it would expand its business in other countries like India.
Politics plays a major role in the development of any business in a country. Economy and laws are the two factors that question the role of political instruments, groupthink bias and levels of development. The emergence of procedural simplification and deregulation needs to be revisited as these are the reasons behind over-regulation. The future of maritime, cargo and tanker services is expected to sever several functions for the alternative institutions by keeping the governance simple for performing other functions i.e. mainstreaming and advisory services etc. concept of the maritime and trading service without the political support cannot be though productive for future planning. It is important to keep the political atmosphere of India in consideration while making plans for the development business with India. Norden Corporation needs to take into account, the fact that India is a democratic country where business and policies for trading with international companies are being made and passed by the political parties that are in power.
While making a report, for Norden Corporation who is interested in making business terms with India, the legislation of the trading country must be taken into consideration. Legislative bodies are the driving force for making a business successful as policies are going to be designed. There is a need to see the relation between Denmark and India and what kind of international interaction they have must be considered while netting the business policies between Norden and India. One of the helping factors for Norden for expanding its shipping business (cargo and tanker services) is that India policies and legislation are quite supportive for expanding the international business. Legislation and the taxation policies are made by keeping in consideration the international trading rules and regulation. Legal analysis of Indian constitutions shows that legal policies are being made for facilitating the trade relation among various countries. Indian legislation and constitutions are made not only for protecting the legal and basic rights of Indian companies and employees that are working in the shipping industry but also legal policies are being made for benefitting the international business partners. At the international level, trade has become an important source of revenue for India and it is the 9th largest commercial importer. After doing the analysis of the legal conditions and policies of India, it won’t be wrong to say that legislative bodies are more concerned with protecting the rights of international investors. It is important for Norden Corporation to understand the Indian regulatory and legal environment for better operation of the business concepts. India being the emerging name in the world economies have become the centre of attention for foreign investors.
Trade area and cultural analysis
Taking a look at the international reports and world ranking in the area of trading, it has been witnessed that India is emerging as the next economic power of the world. In the trading market is making its name and being the first Asian country in trading areas it is becoming the centre of attention for many international corporations that are doing business and wants to expand it as well (Nowińska et al., 2019, p.163). The area that is being focused by Norden for expanding its business in India is the shipping industry by keeping in consideration the number of ports present in India. Though Norden is doing business in the shipping industry with many European countries for decades in the case of India, Norden needs to be more critical as it would be it is first of exporting its business to any Asian country.
One of the main factors that have been analyzed is the cultural difference that exists between the two countries (Denmark and India). The cultural difference would influence the trade relation of both countries to a great extent. As in the report, it has already been mentioned that shipping through tankers is used for the transportation of liquids that also involves alcohols, but due to the cultural differences (Jørgensen et al., 2018). This fact cannot be denied that international business not only deals with the transportation of goods across the border but also across different cultures. Cultural is the main factor that shapes and influence thinking, behavior and communication of people. Negotiation is greatly affected by cultural difference.
For exporting or expanding business on an international level every corporation needs to keep this thing in mind that good understanding of each other’s culture would help in making the collaboration successful. Norden, as wants to enter in India shipping industry than one of its primary concern should be teaching its employees about the India culture and cultural issue that they may face. If people of both sides would understand each other’s culture will only then they would become able to build a healthy relation. Culture involves various elements i.e. religion, values, traditions, belief system, attitude, education, laws, politics and social organization.
It won’t be wrong to say that cross-culture challenges must be resolved with mutual cooperation. In the case of India, there would be witnessed a clash in the traditions, belief and workplace etiquettes. Analysis of the cultural difference shows that Norden Corporation needs to more careful for narrowing cultural gap as it has zero experience how to launch or expand its business in any Asian country, though it is doing business with many other European countries but it has never expanded its business terms with any Asian country before so, it would be a little tough in the beginning to understand each other’s culture for removing any confusion (Skovgaard et al., 2018, p. 281). Analysis of various international corporations shows that when cultural difference gets resolved, the efficiency of business seemed to be enhanced to a great level. In the trading area, especially when it is about shipping, it would become necessary for Norden to minimizing the cultural gaps so that set goals could be achieved (Theotokas et al., 2018). It is a fact that cultural difference is present there but is an emerging name in the international market, India has shown corporation for resolving any sort of issues. Flexibility in the attitude of India is one of the reasons why is becoming the strongest economy in the world.
Planned operation of the proposed business
Operations mean anything that is necessary for running an organization or corporation. Shipping is the proposed business that Norden wants to do in India, so operation that would be involved in this proposed business would include equipment’s (cargo and tankers), process that is must for the functioning of the corporation and people that would plan how things would go (Keskinen et al., 2019, p.289). Operations would be considered planned only when the administration of both Norden Corporation and Indian shipping companies would convert maximum numbers of labor and material into services and goods for increasing the efficiency of operations. As the business that is being proposed to India is of t shipping, so all the operations would be planned in according to the strategies that would be helping for promoting and expanding the shipping market of Norden at an advanced level.
Planned operations not only helping in the maximizing the efficiency of proposed business but also at the same time, it is important to make a proper framework for dealing with the risks involved. For operational management risk analysis is of great importance. The central focus would be on foundational issues. Considering the risk while making any decision would help in prediction the effective solutions as well. It has been seen that in the case of maritime shipping, few of the theoretical frameworks are quite important i.e. traffic conflict technique, system simulation and Bayesian Networks. Though spills from the tanker rarely occur still the major concern for the stakeholders as environmental protection also needs to be the primary focus of the Norden Corporation.
Operations being used for ship-to-ship transfer are seen more and more as the size of the vessel grows as compared to the size of port and terminals. Most of the plans involve STS operations for providing solutions to delays and avoiding the traffic. STS transfer is one of the safest shipping ways. Most STS operation is used for liquid cargoes but at the same time, it could be used for dry cargo as well (Lien et al., 2019). Planned operations for shipping involves proper panning by taking a look at the political, legal and social circumstance in consideration as the efficiency of Norden Corporation would be determined by the circumstances of India as a mutual corporation would help Norden for achieving the set goals.
Norden Corporation wants to expand its shipping business to India but this fact cannot be denied that it has no experience in any of the Asian countries though it has long been working with number of European countries still proper planning is needed for then successful launching of Norden Corporation in India (Woo et al., 2019, p.3). India’s is successfully running its trade business with other international companies and for ports in India have become the centre of attention for Norden Corporation.
One of the best things that anyone wants to know is the product of the service that a company wants to provide. As Norden is interested in exporting its business in India, for both professional and general public one the main question would be about the product or service that would be offered to them. Though there are various products that Norden is offering worldwide as far as export/business launching in India is concerned, Norden by taking a look at the port richness and trading emergence wants to export shipping business there like it is exporting shipping products in other European countries before. Taking about its services and products that Norden wants to launch in India Dry cargo and Tanker comes at the top. India would be the very first Asian country where this international corporation wants to export its business like other European countries.
In a business context, this fact cannot be denied that an international corporation would invest or export only a business that it thinks would earn more reputation for it and would add a lot in making its position more secure in the international market. Likewise, Norden by considering the popularity in the trading industry wants to give its helping hand to India so that I would give them some benefits along with taking some advantages at international as well, as it is the true spirit while doing business. Any business in which a company offers its services and products first focuses on the long-term benefits that it is going to have from the other country. Keeping an eye on the growth in trading field and richness of ports Norden is interested in offering its shipping services to India.
India is one of the biggest importers of consumer goods and for trading; India needs cargo and other shipping material so that smooth and flawless transport of goods could take place (Heide et al., 2019, p.11). Though there is a long list of the products that but what kind of products and services are offered to other countries depends upon the country with which Norden wants to initiate its business at an international level. Taking a look at the circumstance and business environment Norden offered shipping services (tanker and cargo services).
One of the main things is the product knowledge that Norden needs to provide to the India shipping corporations with which it is going to develop business terms. Dry cargo ships are used for carrying the solid dry goods that resist heat and cold. Material that is used mostly for transportation purposes includes coal, iron, steel, forest products and grains etc (Serry et al., 2019, pp.9-25). Vessels are well-equipped with machinery that would help in the loading and unloading of the material. Taking a look at the international trade, it has been seen that Dry bulk shipping became popular as more material is being transported from point of production to the point of delivery.
On the other hand, the second product that is being offered by Norden for expanding its business to an Asian country (India) is Tanker (Gilbert et al., 2019). It is a special ship being designed for the transportation of the store liquids and gases. Major types of tanker services that are offered to India include oil tankers, chemical tankers and gas carries. It is important to notify that these tankers are also used for the transportation of molasses, wine and vegetable oil as well (Tørum et al., p. 113). For making a successful business plan and offer that other country would accept wholeheartedly, it is important to take in consideration the needs and demands of the country in which Norden is interested in expanding its business. So, it could be said that analyzing the target market before offering a business deal is necessary for the business as if the offer is as per the requirements of the country only then target market or country would accept the offer of selected products of service.
Making a business plan for a company like Norden Corporation, where investments would greater, it is important to pay more attention to financing. In 2018, Norden invested more money in order to increase tanker capacity, growth of Dry Operator. Financial strategies that would be made for making a business plan for India could be influenced by the social and political circumstances of the country in which business is going to launched (India). Financing plan of Norden Corporation should be pre-designed as proper planning is needed. Planned finance helps in determining how the business of Norden will achieve make its set goals, objectives by keeping into consideration affordability (Greenhalgh et al., 2019, pp. 501-517). After the setting of vision and objectives, it is important for Norden to create a well-structured and well-designed financial plan. Accessing the business environment of India is important for making a financial plan. Planned finance will help Norden in correction allocation of the funds and determining how the set trading goals of Norden would be achieved. Planned finance is equally important as setting up a business (Omrani et al., 2016, p.123). For the smooth and proper business functioning in India financial team of Norden needs to focus on a properly planned finance.
Before making a proper financing plan in India, it is important for Norden to take a look at the risk management factors, cash flow, taxation and legal compatibility etc. so that future problems their solutions could be predicted. Planned finance strategy Norden before jumping into the Indian trading business, it is important for it to take a look at its financial condition as well as the development of financial goals. The financial strategy should be a plan by taking into account the legal and financial circumstances of the target trading country. Planned finance would be helping both Norden as well as India. Planned finance helps in achieving the set goals of both the countries and proper planning helps in mitigating the issues. Planned finance helps to build and to maintain good relationships between the partners. Financial stability not only seeks to help the approaching organization but at the same time, it helps the target trading country for making development at international level (Ganesh et al., 2018). Norden Dry Operator is one of the highly sophisticated business models and it focuses on the constant matching of cargoes with the vessel. Planned financing assists in creating results that would help in taking the right step for making Norden more successful international organization. Taking a look at the financial statements and conditions of the other investments of Norden in other European countries, the financial team should seek help from Asian financial experts as there is a huge difference in the financial circumstance of both European and Asian countries. Norden and it’s finance experts while making a financial plan for launching the business in India need to keep this thing in mind that being the timer in any Asian country that need to be more focused on things that they are doing in other European countries for years.
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