BM7033 International Business Environment Assignment Sample

BM7033 International Business Environment

Introduction - BM7033 International Business Environment

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This assignment is essentially presenting a research work along with a reflective study regarding my experiences on the subject topic. In this report, I would like to first draw down the critical study on the subject of the emerging markets in two countries, that is UK and India, and to be precise, on the Automobile markets of the two countries. I would like to draw down historical affairs that had led up to the current situation in the two markets and would like to conduct a detailed study of their situations, scope, and chances of international business in both of the markets. Along with this, I would also like to document the various experiences and learning processes through which I had undergone. 

Understanding of the academic discipline and area of professional practice

The difference in the aspects of development between various countries has been an outcome of the political, cultural, and economic history of the country. The fact that the UK is a developed country that is fully industrialized and has been exposed to its maximum capacities of development and progress. On the other hand, India being a third world nation has prospects of development. While the Industrial Revolution had sparked and boomed in the UK since the 1750s and was a hub of production units, including early automobiles and their related spare-parts ancillary units, the main raw materials for the factories were produced and shipped from India, which was then the colony of Britain from 1740s to 1947. The so-called Drain of Wealth '' of India has led to its under-exposure to the setting up of mass production units (Kumar, 2015). However, since its independence, the country has had mass products for high-scale industrialisation in comparison to an already matured market of the UK.

Methodology

For the collection of the major portion of the data, I shall be making use of secondary sources, materials such as essentially websites, web pages/articles, and reports. I shall conduct the research based on qualitative data essentially and this shall be used to draw the critical analysis and interpretation of the subject. 

Critical Analysis and Interpretation

The data regarding the affairs of the automobile industry in the UK was collected by me with the help of the team leader. Our team had been provided with a topic to study about the international markets, by taking into consideration a fully developed industrialised market and a developing emergent market. I had collected detailed data regarding the UK Automobile industry, its growth, prospects, contribution, etc. Our team leader was Participative and Transformational in nature and helped me with the critical analysis of data throughout. The person motivated me and set goals in front of me suggesting that my study would help in better understanding the industrial gaps between the two countries more effectively. The leader also suggested the ways by which I can collect and synthesize the data. I would like to present the instances of the data that I had collected regarding the UK's Automobile sectors and India's Automobile sector and then compare the two and would further draw means to exercise the maximum scope of growth in them. 

The UK as an Industrialised Market

The GDP of the UK has had a stunted growth of 1.3% in 2018 due to Brexit. It grew by 1.4-1.5 in 2019 and fell down to -9.8 on account of the Global Pandemic (Export-Entreprises.com, 2020). The UK has a mature industrialised economy, however, its automobile industry is one of the greatest contributors to the total productivity and economy of the country. The industry directly employs a total population of 180000 individuals, contributes to 13% of the total exports of the UK (£15.3 billion to the UK's economy), and is almost dominated by 30 manufacturing houses. During 2014, the industry was producing and selling a total of 2.5 million units (The Supply Chain Consulting Group Ltd, 2020). However, as an effect of Brexit and the pandemic, the production has fallen by 2.4% to 2.31 million units sold in 2019 and further by 5% to 2.2 million units in 2020 (Global Data Plc, 2020).

India as an Emerging market

GDP of India was at 7.6% in 2018, and it fell down to 3.1% in the first quarter of 2020 and lies approximately at -20% at present on account of the Global Pandemic (Tradingeconomics.com, 2020). India already has the fifth largest automobile market and is moving to be among the top 3 by 2021. Presently, the market has a total Foreign Direct investment of $24.5 billion. Since 2016, 26.36 million vehicles have been sold, 21.55 million alone in 2020 which marks an increase of 1.29% CAGR. The country has cost advantages, and Foreign auto companies can save up 10-25% on their costs as an added result of a reduction in GST from 12% to 5% (Ministry of Commerce & Industry, 2020). The industry has a total contribution of 7.1% to the GDP of the country, has a 4.3% share in its exports, and generates total employment for a population of 35 million (Investindia.gov.in, 2020).

Developing new international businesses in these two markets

India has a rising young population and a middle class. The growing demand of vehicles per person has been on a rise, it being an emerging economy. The Government aims to develop the sector and so, it has brought GST reforms to reduce it from 12 to 5%. The country aims to be a leader of mobility by 2030 and aims towards building up new environmentally sustainable vehicles such as Natural Gas run and Electric run vehicles. It has cost advantages since the Government proposes to pay INR 20 lakh crore as a package for the promotion of local manufacturing. The market size is on an increase and is being tapped by players such as MG Motors, Toyota Motors, Mahindra and Mahindra, Land Rover, Jaguar Audi, Ford, etc. With the initiatives taken by the Government such as Tax deduction, setting up Research and development, and introduction of plans such as 'Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME)', many companies have started setting up new manufacturing units (Ministry of Commerce & Industry, 2020).

The UK market is more or less saturated, with the Brexit tensions rising up, global tensions, and the technology race among the developed nations has somewhat affected the scope of growth of the industry. It is expected that the volume of production would fall below 8,50,000 by 2025 which is the lowest since 1953 (Reuters, 2020). However, there are chances of growth in respect of emission-free electric and other modes of vehicles. The government aims to make the country emission free by 2050 and so in order to increase FDI and slip out from the ill effects of the pandemic and Brexit, the Government is planning to strike new trade deals with the EU (Hampton, 2020). With the help of the Government efforts, 'Furlough Scheme', it is aimed at paying 80% of the salaries to the employees who are on leave. Since there is a high level of employee turnover plaguing the industry, its growth in productivity and sales, the Government has taken such a measure.

Suggesting strategies for making successful business in these two markets

The growing employee turnover in the UK's Automobile sector and a decrease in sales and growth can be tackled with the help of the promotion of electric vehicles. A huge investment needs to be made in the country in order to make the population shift towards buying Electric Vehicles. This shall not only create new jobs for the unemployed skilled workforce but shall also boost demand for new vehicles. The Government needs to invest a total of £16.7bn in order to build up 507 new charge points at every corner of the country and boost buyer confidence even before the year 2035. Multinational automobile players in the UK market such as Ford, BMW, Renault, Volkswagen, Jaguar, Nissan, Hyundai, Mercedes-Benz, etc. need to start developing cheap and successful battery-driven family cars from a range of £4,750-£5,500 and SUVs from £8000-£9750 respectively in order to attract new customers. Battery driven cars have a 29% lower cost of maintenance and save the environment by around 29% (SMMT, 2020). These should be the main motive behind the buyers, government, and the players to encourage the shift towards sustainable vehicles and equally boost up the UK Automotive market.

Since India is an emerging market, there is a huge scope in the expansion of different vehicles including electrical driven ones. The government needs to offer more trade benefits to the companies and should encourage them by providing the necessary infrastructural facilities in order to promote the growth of the sector. Internal political rivalries and tensions in the country have time and again caused huge issues for setting up of production units in rural areas and thus these affairs need to be effectively taken care of by the Government. The Government also needs to ensure that proper work culture and payments are offered to the rising and new workforce in the industry in order to reduce their chances of exploitation and the overall rate of employee turnover. In September 2020, Mahindra and Mahindra signed an MoU with Israel-based REE Automotive in order to produce more electric vehicles (Ministry of Commerce & Industry, 2020). Similar initiatives are also being taken by companies such as Tata, Jaguar, Land Rover, MG Motors and these initiatives have to be backed by the Government through providing proper infrastructure in order to boost up the market and tap the unexplored parts of the huge market. 

Reflection

Critical Reflection and/or Personal and Professional Application

By doing this assignment, I could learn a lot about data collection, interpretation, and putting down those results in a complex manner. I had learned about the values and ways by which work can be done in a team structure cooperatively and co-ordinatively. I would like to say that my team members and my leader have helped me a lot to do this work. First of all, I was facing issues regarding the collection of detailed and accurate data from a single source. This problem was faced by many others when our leader suggested making use of two mental models to be able to find and synthesize data effectively. 'The Map is not the Territory" was a model suggested by our leader which suggests that all data sources are not wholly perfect and real. In order to avoid this situation, a combination of data sources was used by me from different websites. I also made use of a second mental model known as "Circle of Competence' which essentially means being honest with oneself and recognising one's faults and advantages and working upon them jointly in order to be more competent (Farnam Street Media Inc, 2020). I generally recognise that I have a lack of good communication skills. Though I can write well, I was hardly able to fully express my problems to the leader. I took the help of the leader and started working on my speaking skills and started focusing on how well I could express a thought with less chosen words within a small given time. While doing the assignment, at first I assumed that the team members were not friendly towards me as they did not take the initiative to communicate with me on their own. Even if two of them did, I could not reciprocate properly since I perceived them to be completely different from me, pointing to my poor abilities to be able to work coordinatively in a team atmosphere. However, I learned that diversity in a team is a healthy affair and so slowly I started learning how to well communicate with other team members who were sometimes speaking in different dialects of English and had different cultural practices altogether. Further, I faced problems in solving and making decisions, especially while I was collecting data and arranging them in order to create a basic analysis and the narrative of my research. I started reflecting on every step of my learning phase and was pointing out my own mistakes and shortcomings. I learned the need for and values of Motivation and training. I had duly received a week-long training and motivation class from my leader who guided and encouraged me to work upon such a diverse and important topic. He suggested that my work would have huge scope and I would be contributing largely to Management studied in the current time by doing this study. These words of his worked as great motivating factors for me. I could complete the work in less time than I had expected. I think this whole learning experience during this assignment has also developed management skills in me. I have closely observed my leader day after day and learned from the person the skills and ways to manage a team of people effectively. I would like to use these skills in the future for managing a team of staff at the concert where I shall be working. 

SMART Personal Learning Plan

Table 1: Personal Learning Activity Plan

1. Specific: The three learning activities are specific since I know why I need to achieve them and what development they would bring in widening the scope of my career. I know what I want to accomplish and have recognised the resources and constraints that are associated with them.
2. Measurable: The actions that I need to take and the amount of effort that I individually need to put in each one of them has been already mentioned in the learning plan table. Therefore, it can be said that the actions and the plan are measurable.
3. Achievable: The goals for the actions shall be measured based on their success factors. They are realistic in nature and need to be accomplished through consistent hard work and reflecting upon the results of my actions. The three main lesson plans can be said to be achievable.
4. Relevant: The goals highly matter to me because of the positive outcomes that they shall be inciting on my career. They match the efforts and the direction of working that I have chosen and so they are fully relevant for me.
5. Time-Bound: A total period of 12 months is required for the accomplishment of the goals directed by each of the tasks. Small steps and effort would bring success and thus the goals can be denoted as time-bound. 

Conclusion

From the study, it has been found that the UK is a fully mature market and India is an emerging market. The automobile markets of the two countries have been studied in detail, covering aspects of their current scenario, key players, Government intervention and policies towards the markets, and their overall rate of growth. The problems in the growth aspects have been identified and strategies for ensuring development in the markets of both countries have been suggested. It has been noticed that the business scenario of the two countries are somewhat different from each other even after the two countries suffered from the Global pandemic. While growth in the Automobile sector has increased for India, it has declared in the case of the UK. This fact can be justified from the analysis which has shown huge growth prospects in India since it is still under-developed and has an untapped market area as compared to the fully industrialized UK. A reflection also has been provided in order to document the experiences that I have gone through while continuing with this assignment. The plan that I have made in order to learn more lessons have also been measured against the SMART objectives. 

References

Farnam Street Media Inc, 2020. Mental Models: The Best Way To Make Intelligent Decisions (109 Models Explained). [online] Farnam Street. Available at: <https://fs.blog/mental-models/> [Accessed 15 December 2020].

Global Data Plc, 2020. UK'S New Car Market To See Another Drop Of 5% In 2020, Not Just Because Of Brexit, Says Globaldata - Globaldata. [online] GlobalData. Available at: <https://www.globaldata.com/uks-new-car-market-to-see-another-drop-of-5-in-2020-not-just-because-of-brexit-says-globaldata/> [Accessed 15 December 2020].

Hampton, L., 2020. The UK Automotive Sector - Challenges And Opportunities. [online] PES Media. Available at: <https://www.pesmedia.com/uk-automotive-industry-challenges-opportunities/> [Accessed 15 December 2020].

Investindia.gov.in, 2020. Automobile Industry In India - Auto Sector Growth Analysis. [online] Investindia.gov.in. Available at: <https://www.investindia.gov.in/sector/automobile> [Accessed 15 December 2020].

Kumar, A., 2015. How The Transfer Of Wealth From India To Britain Began Well Before The Industrial Revolution. [online] Scroll.in. Available at: <https://scroll.in/article/744757/how-the-transfer-of-wealth-from-india-to-britain-began-well-before-the-industrial-revolution#:~:text=Deindustrialisation%20between%201750%20and%201900,following%20the%20latter's%20industrial%20revolution.&text=Until%20the%201840s%2C%2080%20percent,only%2013%20percent%20from%20India.> [Accessed 14 December 2020].

Ministry of Commerce & Industry, 2020. Automobile Industry In India, Indian Automobile Industry, Sector, Trends, Statistics. [online] Ibef.org. Available at: <https://www.ibef.org/industry/india-automobiles.aspx> [Accessed 15 December 2020].

Reuters, 2020. UK Car Sector Calls For More Government Help To Handle Virus Hit - ET Auto. [online] ETAuto.com. Available at: <https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/uk-car-sector-calls-for-more-government-help-to-handle-virus-hit/76524958> [Accessed 15 December 2020].

SMMT, 2020. Billions Invested In Electric Vehicle Range But Nearly Half Of UK Buyers Still Think 2035 Too Soon To Switch - SMMT. [online] SMMT. Available at: <https://www.smmt.co.uk/2020/09/billions-invested-in-electric-vehicle-range-but-nearly-half-of-uk-buyers-still-think-2035-too-soon-to-switch/> [Accessed 15 December 2020].

The Supply Chain Consulting Group Ltd, 2020. Growth Challenges In The UK Automotive Industry - The Supply Chain Consulting Group. [online] Sccgltd.com. Available at: <https://www.sccgltd.com/archive/automotive-logistics-growth/> [Accessed 15 December 2020].

Tradingeconomics.com, 2020. India GDP Annual Growth Rate | 1951-2020 Data | 2021-2022 Forecast | Calendar. [online] Tradingeconomics.com. Available at: <https://tradingeconomics.com/india/gdp-growth-annual> [Accessed 15 December 2020].