Discuss about the Internationalization Of Malaysian Contractors.
Internationalization is a term that means a process of planning, designing, creating/developing and implementing a product, project or service in such a way that it can be easily adjusted to meet the specific local requirements, such as cultures, languages, needs, codes, standards, etc. The process of changing an internationalized product, project or service to meet the local needs is known as localization. Therefore internationalization should help to eliminate barriers to localization (Ishida & Miller, 2015). From this definition, internationalization does not necessarily mean an organization’s entry into a new country but can also mean entry of an organization into a new worldwide business network (Juuso, 2015). An organization can integrate internationalization in its activities by coming out of its present operating environment (Awil & Abdul Aziz, 2009).
This report examines the process of internationalization and how International Relief Consultants can integrate it in its operations so that the paper log house design can be used to provide shelter to disaster victims in any part of the world. As a humanitarian agency, internationalization can be used as a tool to enable the organization establish appropriate strategies of constructing paper log houses very quickly and at the lowest cost for victims of catastrophic events, such as floods, earthquakes, landslides, tsunamis, volcanic eruptions and wildfires, anywhere in the world. In general, internationalization will help the organization to be well organized and ready to help natural disaster victims at any level: local, national or international level.
Internationalization is not a new concept today especially in the construction industry (Abdul Aziz & Won, 2010). Many construction companies have become more aware of internationalization process because of the increased global construction market prospects (Jin, et al., 2013). This process exposes an organization to a wide range of risks, challenges and opportunities (Gajendran, et al., 2013). Depending on how these factors are handled, an organization that goes international will either succeed or fail.
There are different reasons why companies or organizations opt for internationalization. Some of these include: fluctuating demand, technological changes, economic changes, intense competition, political changes, etc. (Korsakiene, 2013). Regardless of the reasons, most of the companies start registering positive results once they go international. Being an NGO, International Relief Consultants are expanding their products and activities abroad so as to respond adequately to natural disaster events. Internationalization will help improve the organization’ recognition and reputation, access global talent, learn new knowledge and skills and serve more people. For many companies, internationalization is a very common strategy of growth/expansion (Ojala, 2009). Other potential benefits of internationalization include: new markets and clients, diversification, competitive advantage, access to talent, more opportunities to serve humanity or customers (van Rossum, 2017), more recognition, and greater exposure (Joseph, (n.d.)).
Analyzing and understanding the process of internationalization is very important. This is the approach that Chinese contractors have applied and that is why they are commanding a significant global market share (Martek, et al., 2010). For a company to prepare and implement a successful internationalization process, it must develop an international marketing plan, perform SWOT analysis, understand its competitive advantage and develop a competitive strategy. These activities are what will determine a company’s preparedness and readiness for internationalization process.
The key phases of internationalization process are illustrated in Figure 1 below
Figure 1: Key internationalization phases
For the organization to complete the internationalization process successfully, all the above phases must be done effectively.
The paper log house designs that are being developed by International Relief Consultants are viable in almost all parts of the world, especially in underdeveloped countries, such as most African nations, Nepal, Haiti, Vanuatu, Afghanistan, Maldives, Yemen, Burma, Cambodia, Bhutan, Kiribati, Tuvalu, Solomon Islands, Myanmar, East Timor, etc. Disasters can strike anytime anywhere leaving many people homeless. In such situations, rapidly deployable dwelling units come in handy to help those left homeless have a place to live. When citizens in underdeveloped and some developing countries fall victims of disasters, they are always not in a position to use their savings or mobilize money to rent or build new houses. The organization can take their services to such victims and save their lives. Therefore paper log house project is viable in different markets worldwide especially in underdeveloped countries. For the organization to take her products and services to an international market, the need for a strategic marketing plan is inevitable. The marketing of these designs should also focus on countries that are prone to natural disasters such as Vanuatu, Bangladesh, China, Philippines, Haiti, Myanmar, Dominica Republic, Tonga, Guatemala, Solomon Islands, Costa Rica, Cambodia, Papua New Guinea, El Salvador, Timor-Leste, Brunei Darussalam, Mauritius and Nicaragua, among others.
For International Relief Consultants to realize full benefits of internationalization, it must have a strategic international marketing plan. This plan should be developed by considering the following factors: the organization’s objectives, budget, entry strategy, target audiences, messaging, desired action, etc. Marketing plan helps companies to achieve their goals and objectives (Kotler & Amstrong, 2008); (Lidelow & Simu, 2015). The following are some of the elements in the marketing plan of the organization:
This includes international objectives and market objectives (Santesmases, 2012). The main objective of the organization is to construct efficient low-cost, safe, functional, environmentally friendly and sustainable rapidly deployable dwelling units for disaster victims in any part of the world.
The products and services offered by the organization are for government agencies, humanitarian agencies, donors, philanthropists, sponsors, disaster victims and any individual or organization that is interested in resettling natural disaster victims. The organization has to ensure that the marketing content reaches this target audience for the marketing plan to be effective (Holliman & Rowley, 2014).
The organization should have diversified strategies of entering the international space. The entry strategy will have a big impact on the success of internationalization and performance of the organization thereafter (Shigang & Guozhi, 2017). Some of the entry strategies that the organization can use include: partnership, joint venturing, forming a consortium with lesser NGOs, acquiring an existing organization in the foreign country and lone operation. Strategic alliances will help the organization understand the local market conditions, challenges, risks, opportunities, cultural differences and legislation faster (Scherer, et al., 2009).
The organization is currently operational and has all the necessary assets and skills to perform the intended activities. In this plan, the organization will elaborately evaluate business environment aspects such as regulatory, legal, political, social & cultural, technological, demographic and economic environment of the target countries. The section should also describe the nature, extent and size of demand for rapidly deployable dwelling units.
The organization will use a wide range of marketing strategies. These strategies will be applied by considering the following elements: product, price, distribution and promotion. The organization’s paper log houses are modified version of the ones built in 1995 in Kobe, Japan. The designs are constantly being improved using modern technologies. The construction cost of one paper log house is 5,302 AUD, which is reasonable and lower than most competitors. These houses can be constructed anywhere hence there is no need for a distribution strategy. The organization will use different channels to promote its products and services, such as social media, radio, television, print, public forums, etc. Other marketing mix actions include: establishing a training program for its employees, creating an international relations department, and organizing monthly meetings with internationalization department or team to monitor progress.
It I also important to have a marketing budget (Ferrer & Garcia, 2016). The organization will set aside a marketing budget to facilitate internationalization. The budget will mainly be used on marketing the organization, its services and impacts.
The organization will also implement and monitor the success of its marketing plan so as to establish whether it meets set goals and objectives. This will be done by looking at various statistics, such as number of partners, donors, funders, houses built, victims helped, number of countries where they are operating, number of staffs, etc.
SWOT analysis is very important in internationalization. It basically entails analyzing the strengths, weaknesses, opportunities and threats of the organization. Through SWOT analysis, the organization will be able to identify how to maximize her strengths and capitalize on available opportunities while improving on her weaknesses and avoid threats. Strengths and weaknesses are an organization’s internal factors whereas opportunities and threats are an organization’s external factors (Brennan, 2012).
These comprise of the organization’s unique resources, innovation and the things they do extremely well. They are positive characteristics, attributes or factors that give the organization an advantage relative to others. Some of the strengths of the organizations include the following:
Track record – this organization has a good reputation in the sector of providing rapidly deployable dwelling units for disaster victims. The reputation is a strength because it demonstrates the organization’s capability to construct houses very quickly in case of a catastrophic event. The organization has completed several similar projects and has good reputation as they successfully completed all previous projects on time and within stipulated budget.
Specialist expertise – International Relief Consultants are specialized in constructing rapidly deployable dwelling homes for disaster victims. This specialization has enabled the company’s staffs to improve their knowledge and skills in this area. All staffs work in their areas of specialization, which helps in improving their performance and productivity. At this organization, everything is handled by a specialist, and this has kept it ahead of others. The specialist expertise ensures that all structures are designed and built in a professionally way hence they are functional, efficient, safe, durable, environmentally friendly, cost effective and sustainable.
Strong project management capabilities – successful delivery of construction projects largely depends on management. The organization has invested significant resources in creating a competent and experienced project management team and technology. This team and technology helps in ensuring that all projects are completed efficiently and within stipulated time and budget. Some of the advanced project management strategies include: effective communication among all stakeholders, hiring of experienced staffs and maximum use of staffs, among others. This is a major strength because disaster victims always get their dwelling units within the planned period and the involved stakeholders are always impressed with the delivery of projects according to plan.
Workforce simulation – the organization provides good compensation for all workers they hire, depending on the level of responsibilities. Hired employees who work overtime or put in extra efforts are always offered a bonus as a way to motivate them. This has enabled the company attract very talented and experienced professionals. For volunteers, their welfare is always given the first priority. With the high level of workflow simulation, the organization is likely to complete internationalization process quickly by attracting the best talent in each locality it sets up its operations.
Engineering knowledge – the organization has invested a lot of resources in developing innovative engineering solution for people who are left homeless after a natural disaster. All elements of the paper log houses are engineered hence they are efficient, functional, safe and durable. This organization has specialized in construction of rapidly deployable dwelling units and continues to do more research to improve its knowledge and capabilities in this area. With this high level of knowledge in construction of paper log houses, the organization can complete internationalization process faster and more easily.
Strong brand name – the organization has created a strong brand name in the humanitarian sector due to their speedy delivery of efficient dwelling units for disaster victims. This is a strength that can be used to facilitate internationalization process.
Victim-centric – the fact that this organization is specialized in constructing houses for disaster victims is a key strength and will have a positive impact on internationalization process. Disasters are unexpected events that can happen anytime anywhere. When they happen, many people including women, children and the elderly get affected. One of the common characteristics of disasters, especially natural disasters, is that they leave people homeless. The victims are always in dire need of basic human needs: food, shelter and clothing. This organization provides one of these basic needs – shelter, hence its internationalization process is likely to be supported by different stakeholders from both the public and private sectors.
Expertise in different parts of the value chain – this organization also has expertise in different areas along the value chain of rapidly deployable dwelling units. The organization has departments that are specialized in the design, construction, operation, maintenance and recycling of paper log houses. Every department has a team of experienced staff that ensures all processes are completed efficiently. As a result of this, internationalization process is expected to be completed successfully because the organization has the required expertise in every sector that is related to the construction of paper log houses.
Close relationship with material suppliers – the organization also has strong business relationship with different suppliers of building materials across the world. This is a key strength that is likely to enhance internationalization process because the suppliers are globally recognized and will also help the organization perform operations in any part of the world.
Diversification – International Relief Consultants have completed numerous similar projects in the past. The organization has built rapidly deployable dwelling units for disaster victims in different geographical locations in the country. This has enabled them learn how to work efficiently even if it is in a new area where they are not familiar with local activities. The diversification is very important in internationalization process because the organization has demonstrated its capability of working in new geographical areas without difficulties. In general, this diversification helps the organization to reduce risks even when working in new and unfamiliar locations.
Commitment to sustainability – sustainability has become a very important aspect in all sectors including construction sector. This organization is committed to building sustainable homes for disaster victims. The paper log homes are sustainable in the following ways: they are built from natural, locally available, recycled and recyclable materials; they are energy efficient and have renewable energy systems (solar systems); they are water efficient; and are easy to maintain.
These are areas the organization can improve on or the areas where the organization lacks resources. They are characteristics, attributes or factors that put the organization at a disadvantage comparative to other organizations. Some weaknesses of the organization are as following:
High operating costs – the change with humanitarian crisis is that victims are always in need for shelter immediately. This means that the organization will have to do what it takes to complete the houses as quickly as possible. This may include paying high costs for materials, transportation or labor.
Insurance – it is a legal requirement for the organization to insure its workers, materials and equipment. Considering that insurance policies and requirements vary from one country to another, this is a major weakness for the organization’s internationalization process.
Inexperienced workers – because of urgency, the organization sometimes uses local labour, including the disaster victims, themselves in constructing the houses. Some of them are inexperienced and this causes delays.
Safety and health risks – construction workers are always exposed to numerous safety and health risks. These risks increase when the workers are using new technologies or machineries (Milosevic, 2010). Therefore the organization should develop a detailed safety and health management plan.
Improper coordination – sometimes the construction of paper log houses is done by a multiagency team, which makes it challenging for the organization to coordinate all activities as planned.
These are external open chances or trends that the organization can capitalize on to improve its performance. They happen outside the organization but offers positive potential to the organization. The following are some opportunities of the organization:
Ability to meet stakeholder demand – stakeholders in the humanitarian sector always want to work with organizations that meet their demands, including tight deadlines, high quality structures and working within stipulated budget. This organization has the ability to meet all these demand hence this is a key opportunity in its internationalization process.
Globalization – today, the world has become a village. This basically means that it has become easier to enter into the international market. Because of globalization, organizations can now enter the international markets more easily and quickly. This is a great opportunity for this organization in relation to its internationalization plan.
Market openness – the humanitarian sector is open to everybody as long as they offer products or services that help disaster victims. Therefore this organization is free to enter into this open market and prove its competitiveness.
Growing competence in energy and water efficient houses – because of climate change and environmental conservation, many governments emphasizing on the need to build energy and water efficient houses. This is also one of the key values of International Relief Consultants hence it will play a key role in facilitating internationalization process. The paper log houses constructed by the organization are water and energy efficient.
Growing competence in modular construction method – this organization also applies modular construction method so as to reduce project delivery time and minimize wastage. The organization has great competence in modular construction and this will have a positive impact on its internationalization process.
Growth opportunities in building designs and construction techniques – this organization is also continuing to develop new and unique house designs for disaster victims and construction techniques that can be used to build these houses quickly, easily and at the lowest cost possible. The organization is using modern machineries and technologies, such as nanotechnology and lean construction to achieve this goal. Therefore these opportunities will make the organization suitable for internationalization.
Increasing importance of sustainability – sustainability is one of the key pillars of the organization. The paper log houses are sustainable because they are environmentally friendly, low cost, easy to construct and operate, water and energy efficient, and flexible. As the world emphasizes on the need to create sustainable structures, this organization will benefit from its sustainable efforts, which will enhance internationalization process.
Emerging markets – even though paper log houses are meant for disaster victims, there is a possibility of these houses being built for low income-earners in underdeveloped countries or those living ins slums as a strategy to resolve housing crisis. Therefore the low-cost, functionality, safety and efficiency of these houses provides a great opportunity for the organization as it considers internationalization.
These are trends or elements happening outside the organization but they pose risks or can harm the organization’s service delivery, performance or reputation. Below are some of the organization’s threats:
Staff turnover – this is a threat that the organization cannot avoid because sometimes staffs make personal decisions to leave. However, the organization will continue innovating strategies of attracting the best talent and retaining them as long as possible. But if some of the staffs leave at time of need then this may affect the internationalization process.
Financial support instability – this being a non-profit organization, financial support sometimes is not guaranteed. The organization gets most of its financial support from well-wishers, donors and charities. If the organization does not get adequate financial support, its internationalization process will be affected negatively. However, the organization should have alternative sources of finance.
Inflation – because of varied economic conditions in different countries, inflation is likely to affect the process of internationalization. If inflation rates go up, the organization will face financial hindrances thus affecting internationalization process. Therefore the organization has to critically evaluate inflation trends in the global markets they want launch their operations and develop strategies of overcoming the inflation effects.
Currency fluctuations – any organization that ventures into international market always face the problem of currency fluctuations. Since this problem cannot be avoided, it remains a threat to the organization’s internationalization process.
Competitors – there are several other organizations that are already offering similar products as those of International Relief Consultants. This means that there is already competition in the international market, which is a big threat. Therefore the organization has to develop mechanisms of ensuring that it performs better than its competitors.
Imitability risk – there is a possibility that other organizations may duplicate the products and services offered by International Relief Consultants. This is a major threat because it will affect the organization’s competitive advantage. Therefore as the organization considers internationalization, it has to think of strategies that will make its products and services unique from others in the sector.
Climate change – this is a global problem that is affecting production of natural building materials such as bamboo and wood, which is the main material used in the construction of paper log houses. The climate change may cause scarcity of building materials, resulting to an increase in the prices of these materials and later the cost of building the houses. At the end, the cost of one paper log house may increase from the current 5,302 AUD. Therefore the organization has to develop strategies of lowering the construction cost of paper log houses even with the persistent climate change challenges.
Competitive advantage is basically a condition that puts the organization at a superior or favorable position than others (Martek & Chen, 2014); (Soloducho-Pelc, 2014). NGOs also compete for needed resources such as sponsors, donors, staffs, volunteers, clients/consumers, etc. (Schwenger, et al., 2014). For this reason, it is important to evaluate the organization’s competitive advantage as it considers internationalization. Generally, all strengths and opportunities discussed in the SWOT analysis section give International Relief Consultants a competitive advantage over its competitors. Some of the specific competitive advantages are: track record; brand name and good reputation in the humanitarian industry, uniquely designed paper log houses; solid connections with building material and equipment suppliers; highly experienced project management team; several years’ of experience; broad operational and geographical base; professional quality assurance and engineering personnel; commitment to safety of workers and house occupants; strict environmental regulations; predicable revenue stream; economics of scope and scale; high organizational capabilities; skilled labor; use of natural building materials; government regulation; low transport costs; low labor costs; suppliers’ bargaining power; efficient procurement methods; volume building; and prioritizing social and environmental impacts.
Every organization must have the right competitive strategy for its internationalization process to be successful (Martek & Chen, 2013); (Picha, et al., 2017). Competitive strategy is an effort that an organization makes or uses to modify its competency in relation to that of its competitors (Chew, et al., 2008). The following are the organization’s competitive strategies:
Understand dynamic environments – before an organization develops any measures of improving its competitiveness on an international base, it has to understand the dynamics within the sector it operates (Oyewobi, et al., 2014). This basically means researching information about construction requirements of rapidly deployable dwelling units in different jurisdictions. It may include engaging relevant stakeholders (such as government authorities, employees, sponsors, disaster victims and other relevant stakeholders in the humanitarian) so as to understand their specific needs (Kumar & Pansari, 2016).
Shape the organization’s internal focus – the organization will focus its internal operations in relation to the environment in which it operates. One of them is establishing policies related to provision of humanitarian services in different countries. Another one is creation of values that foster humanitarian service delivery. In other words, the organization will only be focusing on rapidly deployable houses for disaster victims hence all its resources will be directed there.
Effective leveraging of external forces – most of the external forces are difficult to control but the organization is going to use different approaches such as modern technology to leverage these forces. For example, if climate change reduces production of bamboo that is the major material for paper log houses, the organization will use nanotechnology to develop alternative building materials that are more efficient and low-cost.
Differentiation – the organization will ensure that the rapidly deployable dwelling units it creates are very unique and unmatched. This will make them recognized from others thus attracting more stakeholders.
Flexibility – since conditions are always evolving, the organization is going to adopt flexible approaches in all its operations. This will make it easier to make necessary changes so as to suit the conditions in which the organization is operating (Korkmaz & Messner, 2008).
Research and development (R&D) – the organization will invest substantial resources in R&D projects. This will include developing new paper log house designs, more efficient construction techniques, low-cost building materials, water and energy efficient systems, etc.
Innovation – this entails developing creating solutions for very pressing problems. The organization will use innovation to create building solutions that will make it stand out from the rest. It will invest a lot of resources in innovation, including going for innovation camps, workshops and forums to acquire new knowledge, and rewarding employees who come up with innovative ideas.
Technology – this is one of the major elements of competitiveness in all sectors worldwide today (Isoraite, 2018). The organization will exploit on available technologies in the construction industry so as to increase efficiency, safety and quality of paper log houses and reduce delivery time and cost of these houses. The technologies will be applied at all stages of the project – design, construction, operation and maintenance.
Cost – the organization will create measures to reduce its operating costs and the cost of houses it builds by use of technology, minimizing wastage, avoiding mistakes or delays, etc.
Quick delivery – the organization will ensure that it always delivers projects within stipulated time. This will help it create long-lasting relationship with governments and donors and get referrals. Prefabrication is one of the strategies that will be used to improve project delivery.
Risk management – the organization will develop a detailed risk management plan outlining risk identification, classification, analysis and mitigation/treatment measures. This will be helpful in preventing or resolving any risks that may hinder its operations.
Volume building – the organization is going to embark on getting as many contracts as possible. This volume building strategy enables organizations to capitalize on bargaining power, economies of scale and learn how to further reduce cost (Chiang, et al., 2008).
Impact – one of the strategies that are commonly used by NGOs across the world is demonstrating the social impact of their operations on beneficiaries, partner organizations and funders (Thorin’s Think Space, 2011). The company will ensure that it properly demonstrates the social impact it has on all stakeholders.
In general, the above competitive strategies can be classified into: focus strategy, differentiation strategy, cost leadership strategy, corporate growth strategy, and grand strategies (concentric diversification, product development, market development, concentrated growth, horizontal integration, innovation, vertical integration, joint ventures, conglomerate diversification, liquidation, turnaround and strategic alliances) (Pearce II, et al., 2010).
One of the reasons why we managed to complete assignments 1 & 2 successfully was because of the group integration and cohesiveness. As a group, we worked as o a team to achieve common goals. We also had past experience in construction projects and this enabled every member to perform assigned tasks diligently and with integrity. In the first assignment, we successfully discussed the design amendments made to the original paper log house built in 199, the construction process of the houses, modularity and budget of the project. In the second assignment, we discussed in details about project strategies, team structure, design of the houses, construction materials and method, and budget. As a team, we collaborated at each stage and ensured that we met all the requirements of assignments 1 and 2. Therefore these assignments were very successful.
The project group comprised of four members: Abhishek, a design consultant who worked as the design planner; Lohith, a project manager who worked on construction methodology; Adithya, a prefabrication specialist who worked on modularity; and Praveen, a cost planner who worked as cost planner. We would improve our performance by involving a few technical members from within the locality of Cox’s Bazar, Bangladesh. Training and attending workshops is another way that we would have improved our experience.
As stated before, integration played a key role in successful execution of this project. It facilitated coordination of all members of the team and the activities they were assigned; it enhanced effective communication between team members; it helped members to understand each other’s strengths and weaknesses thus ensuring appropriate allocation of tasks; it helped us evaluate the strengths, weaknesses, opportunities and threats of the project; it helped us make good decisions faster; it helped us criticize each other’s work positively; it helped us avoid conflicts or disputes among ourselves; it helped us learn from each other’s knowledge and experience; and it improved our productivity and the overall performance of the project.
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