Business Proposal on "Business Proposal in Ghana"

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Business Proposal in Ghana

Giam's Clothing:

Business Proposal in Ghana

Company Description

Giam's Clothing is an apparel manufacturer which produces clothing articles for the American middle class. The company was founded in 1990 by current chief executive officer John Whitehouse. The middle size company has little over one hundred employees and an annual turnover of 1.5 billion dollars. The firm operates through a single location within the United States. This location is composed of two facilities: one for production purposes and one for administrative purposes, containing the offices of the CEO, the CFO and other business departments, including the Finance and Accounting or the Human Resource Department. Twenty people work in the administrative facility and one hundred in the production facility.

The product line includes basically all articles from underwear to winter jackets, sold through company partners and numerous intermediaries. The company has given intense consideration to opening their own stores through which to sell their products. However, this would generate additional costs. Due to the company's main focus on reducing costs as much as possible, they continue to reach the final customer through intermediaries.

The primary goal to reduce costs is given by the company's intense desire to offer their customers high quality products at modest prices. All actions commenced by Giam's Clothing are focused on their primary target market: the American middle class population.

Another major area of interest for the manufacturer is represented by their pers

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onnel. The company values their employees and sees them as the means of reaching the overall corporate goals. Company officials see the human resource as Giam's most valuable asset and constantly invest in developing their skills, motivating them to increase their performances and fairly remunerating them.

The company's mission statement stands as proof for the attention paid to both customers and employees.

Giam's Clothing is committed to offering their customers modernly designed apparel which allows them to save money. Company employees play a vital role in achieving this desiderate and are all treated fairly and integrated into the Giam family.

Aside from the customer and employee oriented policies, the company is also focused on finding new ways to reduce costs and finding new financial resources.

Giam's customers are highly satisfied by the quality of the products and their reduced price. Giam's Clothing offers them the possibility to stay modern and trendy while not costing them important sums of money. Over the past years, this has generated an increased demand for Giam's clothing products; but the company has encountered numerous difficulties in satisfying this increased demand. The major impediment is that the current structure of the company is unable to support an increased production, requiring as such an expansion of the company. But an expansion would generate additional costs, namely with finding a new location, hiring more personnel and paying larger taxes to the state budget. All these would be reflected in the final retail price by increasing it.

In order to efficiently resolve this matter, Giam's Clothing is currently analyzing numerous international destinations which could support the opening of a new facility and would require minimal additional costs. Ghana, an African country, was chosen as a main destination.

3. Country Variables

Giam's Clothing has decided to open up a new subsidy in Ghana, where they would outsource part of their orders. The new company facility in the African country would be similar in size with the American facility and would be primarily focused on manufacturing apparel products. All investment costs would be paid by the American company, which would either purchase, rent or built a facility.

The new Ghana subsidy would be run by American employees and would hire locals for the manufacturing process. This business strategy would generate benefits for both parties. As such, Giam's would benefit of cheaper workforce than in the United States and Ghana would receive an international investor that could support the community development and lead to an increased interest from other foreign investors.

3.1 Physical and demographic profile

The physical and demographic variables of Ghana incorporate information about the country's geographical positioning, its demographics and other information about Ghana's population, such as workforce characteristics.

Geographical variables

Ghana is an African country located in the western region of the continent, bordering the Gulf of Guinea. In the vicinity of the equator, the country is located on the Greenwich meridian. Ghana is surrounded by Burkina Faso to the north, also known as Upper Volta, by Togo to the east, the Atlantic Ocean to the south and Cote d'Ivoire to the west, best known as the Ivory Coast.

Source: Virtual Explorers, Map of Ghana

The West African location influenced the company's decision and will continue to influence their actions. As such, compared to other international destinations, initially considered in Asia, the African country poses the advantage of shorter distance to travel, and as such reduced logistics expenditures. Also, when compared to the Asian destinations, Ghana benefits Giam's Clothing as the population requires lower wages, reducing as such the personnel expenditures. However the Asian population is better skilled and qualified, the cost savings with logistics and lower wages represent a net advantage.

The African country is spread on a total area of 239,460 square kilometers, out of which 230,940 square kilometers are land and the remaining 8,520 square kilometers are represented by water. In a comparative presentation, Ghana is only a bit smaller than Oregon. (CIA, 2007)

Ghana possesses 539 kilometers of coastline at the Atlantic Ocean. For the American manufacturer, this means that they will have easy access to the country and will be able to transport all commodities to the country and final products out of the country by sea. Furthermore, the airports in Accra, Ghana's capital, will also ensure easy access to the country by providing air travel possibilities.

Another geographical variable with influence when analyzing a business opportunity is the country's climate. Ghana has a tropical climate, "warm and comparatively dry along southeast coast; hot and humid in southwest; hot and dry in north" (CIA, 2006). Therefore, the whether is proper for conducting business and does not pose major threats. However, the hot climate and high temperatures will force Giam's Clothing to equip the facility with air conditioning and significant water supplies.

Directly deriving from the country's climate are the natural hazards prone to occur and influence the manufacturing activity. As such, the basic threat generated by the geographical positioning of the country near to the Ecuador is drought. However, this has a positive effect upon the American company. To better explain, a significant proportion of Ghana's population works in the agricultural sector. But the massive droughts generate losses and force workers to turn to other means of earning an existence. The new American company opened in the region would therefore benefit of numerous individuals who desire to get a job in a sector different from agriculture. In all, this would ensure that Giam's subsidy is well received by the community and benefits from a wide array of candidates.

However these do not directly influence the activity of Giam's Clothing in Ghana, the natural resources of the country should be mentioned as they could generate secondary effects. As such, Ghana is most rich in "gold, timber, industrial diamonds, bauxite, manganese, fish, rubber, hydropower, petroleum, silver, salt and limestone" (CIA, 2007).

A final matter of geographical nature that could influence Giam's activity in Africa refers to environmental issues. Aside from the previous matters which generally offered benefits for Giam's, environmental concerns could harden the access to the African country. To better explain, during the recent years, Ghana has been subjected to the negative effects of industrialization, including massive deforestations, soil erosion, threats of the natural wildlife, the dumping of waste in the country's waters and other procedures which basically increase the levels of pollution in the area. From this perspective, Giam's Clothing could encounter difficulties if they do not respect the environment regulations imposed by the country. To establish these regulations that protect the environment and reduce pollution, Ghana has become an active party on numerous environment international agreements, including the "Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94 and Wetlands" (CIA, 2006).

Demographical characteristics

In 1990, Ghana's population amounted to a total of 15,000,000 individuals (eBizguides, 2004). By 2006, the country's population had risen to more than 22 million. The Central Intelligence Agency estimated the total population around 22,931,299 inhabitants and a growth rate of 1.972% for 2007. This represents an opposite tendency within the international community, where the trend is a descendant one. The positive growth rate of the population impacts Giam's Clothing subsidy in Ghana in the meaning that it creates more workforce in the long run. As such, the American company will have an extended palette of candidates, from which they will be able to choose the most suitable workers.

Other demographical highlights, as revealed by the Central Intelligence Agency, refer to:

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Quoted Instructions for "Business Proposal in Ghana" Assignment:

“

Country Report Project

Student(s) will be asked to do the following:

Select a country, other than your place of origin, with prior approval of the instructor, and, unless otherwise indicated, write a minimum twenty-plus page country report with recommendations to the President of XYZ Corporation, which is planning to expand its global business operations into the country of your choice. XYZ must be a fictitious company. Your report should comply with the evaluation standards below including the integration and use of information literacy and technology fluency in your research. The first part of your report should briefly discuss, in no more than two pages, your company including the nature of its business, its mission statement, history, demographics, strategy and structure of the firm, and any other pertinent information about your company up front. The second and major part of your report, a minimum of fifteen or more pages, should critically examine, analyze, and evaluate all salient factors in the business environment impacting your company which may include but are not limited to:

physical and demographic profile (geography, resources, population, workforce characteristics, etc.)

cultural/social, political (political system, political risks etc.), legal and economic(level of development, inflation, etc.) profile

trade, investment and foreign policy profile

You report should explore the positive and negative aspects of the specific environmental variables which will impact business operations in the selected country. The other three-five or more pages should include specific recommendations, implementation and evaluation strategies that XYZ should undertake based upon your findings.

Project Evaluation Standards

The Country Report Project will be evaluated according to the following standards:

I: Definition and Scope

A well-defined project including the purpose, assumption or hypothesis of your country research.

Description of your company, which must be fictitious, including the nature of its business, demographics, history, operational strategy and structure of the firm, and any other relevant information about your company.

Mission statement of your company

II: Identification and Analysis of Country Variables

Inclusiveness of variables

Relevancy and saliency of variables

Organizational categories and substantive analysis of variables:

Physical and demographic profile (geography, resources, population, workforce characteristics, etc.)

Cultural/social, political (political system, political risks etc.), legal and economic(level of development, inflation, etc.) profile

Trade, investment and foreign policy profile

III. Strategic Recommendation and Implementation

Alternative propositions

List, discuss and analyze four specific strategies your company could pursue including, but not limited to, direct investment, joint ventures, licensing, franchising, exporting, turnkey project, and management contract. Provide the advantages and disadvantages of each of the three strategies selected extrapolating salient observations from the variables discussed and their impact on your strategic choice. Are the critical analytic perspectives interwoven with the preceding variables from which a reasonable conclusion could be deduced? Are they logically synchronized?

Identify, select and analyze the best strategy of the four discussed and explain why this is the best strategy for your company. You will need to engage in a comparative analysis using, for example, a pro and con approach to demonstrate why your recommended strategy is best for the company.

Strategic Implementation

Analyzes specifically how you would implement the best strategy you have recommended for the company to pursue. What substantive specific steps should be taken to implement the recommended strategy? If, for example, you recommended an export strategy, then you will need to analyze and elaborate on your strategic initiatives to include an examination of such variables as various forms of exporting, logistical considerations, government policies, marketing and distribution concerns, the export process and export intermediaries. Your analysis, should be juxtaposed in context of the core competencies of your company; you may also wish to discuss the corporate culture and its leadership view (ethnocentric, polycentric, geocentric) that may impact your strategy.

Strategic Evaluation

Seeks to analyze any unforeseen anticipatory or contending futuristic events and recommends a fall back strategies with imaginative *****out of the box***** thinking and solutions. Challenges students***** originality and visionary leadership. What, for example, if as a result of your recommendation, your company chose to export all of its products to Chile, becoming very dependent on the economy of that country, then after years of successful export business relationship, a revolution were to occur, with anti American sentiments interrupting the prosperous trade relations between the two countries, what would you do? An effective strategic evaluation would include, for example, an export diversity strategy. Think creatively of different scenarios and provide viable fall back solutions.

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