10.

FUNCTIONAL STRATEGY

10.1 I nternational Human Resource Management Strategy

In South Africa the managerial culture differs as compared to the developed western
nations (Budhwar, S & Mellahi, K 2007). The culture is that that managerial positions
were filled with whites. The unions have been working towards advancing the blacks
into skilled and managerial positions, which is still not successful. The perception in
South Africa is that firms run by whites lack credibility and are not trustworthy. This
has brought in the aspect of cultural and contextual differences between the white
managers and black employees, creating a huge perception gap with respect to how
employees should be led in the organization.

Most of the managers in South Africa use western management styles contrary to the
blacks values and attitudes which entails rationalism, individualism, and autocracy
which do not reflect cooperative values and communal philosophy of workers (Wood,
G, Mellahi, K, Budhwar, P & Debrah, Y 2001). Hence Endless Wave Company will
need to familiarize itself with the culture so as to integrate with the environment so
that they can gain entry in to the market. The Human Resource Management
Department in the company will also need to learn more about the culture in order to
be able to handle the employees also since the company will use of location specific
factors like local labor, local procurement, and local sales in order to penetrate the
South African market and improve operational efficiency. Moreover use of local
external linkages such as subcontractors, distributors, customers, suppliers, as well as
government agencies will enhance penetration (Li, C 2011).

Ongoing monitoring and evaluation is definitely required in internal and external
benchmarking. Proper training for the employees is crucial to overcome illiteracy and
increase employee performance (Horwitz, F, Bowmaker-Falconer, A & Searll, P
1995). The company may realize importance of blending both white and black
workers to international trade and company efficiency and be in line with the unions.
That way it will gain knowledge of South African marketing and culture.


10.2 I nternational Marketing Strategy

Endless Wave should follow a cost leadership strategy. Endless Waves quality and
cost effective products can be used to build its unique selling proposition. This
definitely gives a good ground for Endless Wave in terms of its marketing strategy.
Promotion should basically be business-to-business as well as business-to-consumers
making it a push and pull prices. Price discrimination will take place since the target
market is large, targeting both high end and the low-end surfing lovers. This will
enable swifter product penetration into the market.

South Africa is advanced in international marketing. The country has an International
Marketing Council (IMC), which was formed in 2002. The council has developed
strategies and made South Africa grow internationally as a brand. The main features
of South Africa are values such as humanity and Ubuntu as reflected globally. The
council worked mainly on three sub-brands, which are tourism, trade and investment
(South Africa, 2010).

Endless Wave should focus its marketing around these three sub-standards to
standardize its products and create demand. It can draw down its unit costs through
FDI and taxation subsidies compared to its competitors exporting from overseas. This
will give the company a competitive advantage over prevailing market giants such as
Billabong and Quicksilver.

10.3 Financial I ssues Related to Greenfield FDI Venture

The green field venture should approximately take over a year and half to be fully
functional making it expensive considering the time frame. Due to high corruption it
will be slightly difficult to comply with local laws and standards and the company
may have to resort to bribery. It will also involve high costs of employing and
providing extensive training to workforce.




11. FORECAST

Endless Wave will be entering a country with a diverse culture and it will enforce
both differentiation and cost leadership strategies while it tackles the issue of
integration into its new environment. When the business progresses it can expand
three subsidiaries and more retail outlets in and around Jeffreys Bay at the end of
2018 as a result of tax exemptions and FDI benefits.

In 2019 the company can call in for a feasibility report to move to other surfing
hotspots overseas through exports of its products or FDI. The study will also identify
the total demand for products in South Africa and assist in making a better decision in
terms of expanding to other regions. The report provides both medium risk and
medium cost base strategy in to the surfing business. Endless wave can accordingly
dive into new venture around 2019-20 depending of the demand and affordability.


12. RECOMMENDATIONS

Competitive analysis proves that competition is stiff for endless wave
company since there are competitors operating in the same niche market. Thus
the company will need to be innovative to differentiate their products in order
to gain a competitive advantage.

SWOT analysis illustrates that Endless Wave follows a single business
corporate strategy. This necessitates need for change and innovation to
increase its profitability and growth. Furthermore initiative is required to
create awareness of products through sponsorship of surfing events and
talented surfers

Necessary skills and knowledge with respect to South African culture will be
facilitated through training and development. Endless Wave will need to learn
new skills and incorporate experience from South African employees in order
to amalgamate with the industry and gain easy access to the markets. This will
make strategies more practical. Moreover, Business processes should be
monitored through performance evaluation.

Guidelines under HRM and Marketing strategies will help the company
implement its overall market penetration strategy. Forecasts that have been
outlined is in line with the current and proposed strategies for future success
and will help the company align itself in accordance with its goals to exploit
sports tourism in South Africa.


REFERENCES


Budhwar, S & Mellahi, K 2007, Introduction: Human Resource Management in the
MiddleEast, International Journal of Human Resource Management, 18, 1, pp, 210,
retrieved 11 October 2013.

Horwitz, F, Bowmaker-Falconer, A & Searll, P 1995, Employment equity, human
resource development and institution building in South Africa, International Journal
Of Human Resource Management, 6.3, pp. 671-685, Business source complete,
EBSCOhost, retrieved 26 May 2014.

Li C, Henley, J, Dong, T 2011, Location Specific Facts, Location Strategy and Firm
Performance: A Case Study Of Taiwanese Manufacturing MNE Subsidiaries
Investing in China. Tijdschrift Voor Economische En Sociale Geografie (Journal Of
Economic &Social Geography, pp. 426-440, Available from: Academic Search
Complete, retrieved 26 May 2014.

South Africa, 2010, Brands & Branding Intelligence, pp. 210-211, Business Source
Complete, EBSCOhost, retrieved 26 May 2014

Wood, G, Mellahi, K, Budhwar, P & Debrah, Y 2001, Part II: Human resource
management in Africa: Chapter 14:Human resource management in South Africa,
Human Resource management in Developing Countries, pp. 222-237, Business
Source Complete, EBSCOhost, retrieved 26 May 2014.