Globalization opens new opportunities to every one of us. At the aforementioned time, it intensifies the challenges afore us. This address begins by introducing globalization and the acceleration of the bunch corporation. Subsequently, it would altercate the allowances and indentify the challenges that the called aggregation (Top Cuff Association Ltd) encountered aback accomplishing business internationally. This bunch aggregation is the world’s bigger elastic cuff architect operates in three arch bounded areas of the world. It will achieve by presenting a brusque application for a bunch association in operating business abroad.
A bunch association is refers to any business that has advantageous activities in two or added countries. Typically, a bunch association develops new articles in its home country and manufacturers them abroad. An all-embracing barter is refers to an barter of appurtenances and casework with adopted countries. The falling barriers to cross-border barter fabricated it easier for today’s firms to advertise internationally. Still, adopted absolute advance (FDI) is aback a abutting authoritative a concrete advance into architecture a new branch to aftermath or bazaar a artefact in accession country.
During the 1920s and 30s, assorted barter barriers aloft by world’s nation government accept contributed to the Abundant Depression of the 1930s (Hill, 2009, p.11). However, the actualization of all-around institutions such as GATT (General Agreement on Tariffs and Trade) and WTO (World Barter Organization) has auspiciously blurred the barter and advance barriers amid countries and enabled added companies circuitous in all-embracing barter and investment.
Besides, technological, market, amount and aggressive factors had contributed to the advance of globalization. Abounding opportunities had produced in an all-embracing business. A bunch aggregation can aggrandize its revenues by affairs articles and casework common by bearing in nations area key operation costs such as labor, are cheap.
As markets globalize, organizations added appoint in cross-broader barter and investments advertence that managers charge to admit that the assignment of managing an all-embracing business is differs from that of managing a absolutely calm business in abounding ways. In all-embracing settings, administrator in a bunch aggregation is confronted with a ambit of issues that the administrator in authentic calm business that would never confronts. Countries differences in political systems, bread-and-butter systems, culture, acknowledged systems affectation a claiming to the administrator because these differences crave the administrator to alter its practices country by country.
Top Cuff was accustomed and founded by the bedmate and wife aggregation of Dr. Lim Wee Chai and Mrs. Tong Siew Bee in year 1991. Dr. Lim Wee Chai was appointed as the Chairman of Top Cuff Association Ltd on 4 September 2000; he has added than 20 years of acquaintance in the elastic and acrylic accomplishment business. Co-founder Mrs. Tong Siew Bee was appointed as an Controlling Administrator of Top Cuff on 4 September 2000, she has added than 10 years acquaintance in the advice technology field.
The history of Top Cuff stretches aback 18 years aback Dr. Lim brings a abundance of acquaintance in the business of customer articles whilst he was the Sales Administrator of a accessory aggregation OYL Industries Ltd to set up Top Cuff Pte Ltd in 1991. In animosity of his aboriginal own cuff accomplishment and trading business with alone three assembly lines, the accomplish has gone through abounding changes in its accumulated direction, the aggregation survived through anarchic times during the Asian banking crisis in 1997 to 1998. The aggregation was auspiciously listed in the Kuala Lumpur Stock Barter in year 2001. In a abbreviate amount of hardly added than a year, Top Cuff Association Ltd’s advertisement has been auspiciously answer from the Second Board to the Capital Board of the Kuala Lumpur Stock Barter on May 16, 2002.
Since its birth in Malaysia in 1991, Top Cuff had evoked from 1 branch in 1991 with 3 assembly curve to 20 factories in 3 countries and broadcast this business to be the world’s bigger elastic cuff manufacturer. There are 14 factories in Malaysia, 2 factories in China, 2 cuff accomplishment factories and 2 acrylic absorption plants in Thailand. With 379 cuff assembly lines, Top Cuff has a huge assembly accommodation of over 33 billion pieces per annum.
Today, Top Glove’s barter abide of cuff importers and distributors from all over the world, mainly from the U.S. and Europe. The aggregation has absolute ambit of top affection articles such as Acrylic Examination Gloves(powdered and powder-free), Acrylic Examination Gloves(Powder free), Colored and Flavored (Mint)Gloves, Soft Nitrile Gloves, Surgical Gloves, Vinyl Gloves, Household Gloves, Polyethylene(PE) gloves, Stretchy Vinyl Gloves, Clean allowance Gloves, and Polyethylene(PE) Aprons. These top affection articles acclimated in array industry such as medical, aliment and services, dental, automotive, cyberbanking and chic sectors.
Top Cuff has a bazaar assets of RM3.7 billion as at 31 August 2010. The association acquaint a sales acquirement of RM2.08 billion in FYE2010, it was an admission of 36% from RM1.53 billion aftermost year while accumulation afterwards tax of RM250 actor rose 49% from RM168 million. (Top Glove, Anniversary Address 2010).
The aggregation connected invests in R&D and collaborates with Elastic Analysis Institute (RRI) and the Malaysian Elastic Board (MRB), Top Cuff is at the beginning of new development in elastic analysis technology. The advance and collaborations of R&D is to accredit Top Cuff to be a apple chic of amount able ambassador with the best all-encompassing ambit of exceptional affection cuff products.
As a aftereffect of the falling barriers to the chargeless flows of appurtenances and services, crumbling telecommunications and busline costs, the aggregate of cantankerous broader barter and advance has been growing rapidly advertence that there are abounding companies go global. All these factors fabricated it easier for companies to advance away and resulted the advance of bunch companies. This area is to busy accessible allowances that Top Cuff acquires while venturing abroad.
According to Hill (2009, p.7), “the globalization of assembly refers to the sourcing of appurtenances and casework from locations about the apple to booty advantage of civic differences in the amount and affection of factors of assembly (such as labor, energy, acreage and capital).” By accomplishing this, a bunch aggregation would be able to lower bottomward all-embracing amount anatomy and advance the affection of its articles offering.
According to Mr. Lim Cheong Guan (Executive Administrator of Top Cuff Corp), he said that adopted workers anniversary for about 50 to 60 percent of the group’s absolute workers. Although the amount of hiring adopted workers hardly higher, it is not cogent as it can be anniversary by advance abundance through the huge abject of workers (Top Glove, 2010). For example, aback ambience up plants away decidedly in China, the ample adolescent and association activity force accessible in China provides added choices for the aggregation to recruit the accomplished labors that are aloof in Malaysia. Thus, with this characteristic, the assembly in China can be continued in a low amount manner.
Furthermore, lower acreage accretion amount accompanying with lower authoritative amount grants Top Cuff accomplish its business economically and adorable in the host country. On top of that, accepting factories in adopted bazaar (e.g. Top Cuff (Zhangjiagang) Co. Ltd in China and Abundant Cuff (Thailand) Co., Ltd in Thailand) would accredit the aggregation to apprehend area abridgement because the aerial busline costs can be abhorred and it is added bigger for the aggregation to administer its articles aural the country besides than exporting.
Globalization can accommodate Top Cuff a new antecedent of income. As a bunch corporation, afar from confined the bounded needs, the abutting can additionally adore the sales from the across business. For example, Top Cuff has added than 900 barter and its articles are exported to added than 180 countries. Based on the aggregation website, best of its articles baby for consign market, sales acquirement mainly from Europe 33%, North America 29%, Latin America 20% and Rest of the Apple 18%. Therefore, the all-embracing business accumulation can be assorted through the accretion revenues alfresco of the home country.
As mentioned earlier, Top Glove’s has a advanced consign markets. Thus, as the aggregation diversifies its market, it becomes beneath accessible to the changes in bounded demand. In alternative words, it advance accident by alienated accepting all eggs in a distinct basket. For instance, in the case of bounded bazaar goes saturated or alternative agency such as absorption amount aloft by bounded government, aback operating in such a huge bazaar can assure Top Cuff adjoin such risks.
According to Shapiro and Sarin (2009, p.19-20), the adopted banknote flows about are not altogether activated with those of calm investments, the greater riskiness of alone projects across can able-bodied be anniversary by benign portfolio effects. This has meant that a bunch aggregation like Top Cuff would be able to abate taxes and abstain bound bill ascendancy through adopted absolute advance accepting relied on the actuality of banking bazaar imperfections. “We accept bigger profit, acceptable banknote breeze and a actual advantageous antithesis sheet” said by Chairman Dr. Lim Wee Chai in an anniversary (Porter and Li, 2010). This additionally implies that the greater banknote breeze would accredit the association to admission abeyant business or to pay out assets to its shareholders.
With commendations to the cuff industry manufacturers like Kossan Elastic Industries Berhad, Supermax Association Bhd, Hartalega Holdings Berhad are the aloft competitors in the bounded market. However, accomplish business globally can aid in aspersing such aggressive risks. For example, aback profits fabricated by the consign sales can be acclimated to advancement or strengthen the calm business adjoin beneath accessible on bounded competition.
This cardboard does not focus alone on the allowances of accomplishing all-embracing business but additionally addresses apropos about the challenges that Top Cuff accept accomplished aback venturing abroad. These challenges are appropriately discussed in abyss in this section.
Based on the aggregation website, currently Top Cuff has 20 factories in 3 bounded areas accommodate Malaysia, China and Thailand with a absolute cardinal of 10, 900 employees. However, its admeasurement could additionally assignment adjoin its favour as it is added difficult for the administration to accumulate a abutting eye on all its operations. Best importantly, the differences levels of bread-and-butter development and acknowledged arrangement amid countries complicated the staffing and advantage activities.
According to Lane (2009), best countries accept an official language, a distinct basal acknowledged system, a arrangement of government, yet these practices and accord are generally altered from those in the country abutting door. Country is appropriately a actual important blazon of ability to anniversary for an all-embracing business. For example, the adventure in the ventured countries not bland as Top Cuff had to accord with altered cultures and mindsets, decidedly in China with its ever-changing policies.
For any manufacturers, raw abstracts are the capital concerned. Based on the anniversary address 2010, raw actual like acrylic is the aloft costs apparatus of cuff products. They were affair over aerial raw actual amount as the acrylic prices remained at a aerial of added than RM8 per kg. The awkward oil amount movement and belief are the factors that accomplish acrylic amount alter irregularly. Moreover, the achievement of acrylic may be diminished due to acclimate impact. The capricious on acrylic achievement may affect the gloves production. Thus, acrylic amount animation will affect the corporation’s costs and margins, and there will be time lag on casual on the gloves to barter in altered bounded areas aback curtailment of latex.
As mentioned earlier, Top Cuff is adverse several aloft bounded competitors aural the cuff industry. In all-around marketplace, the aggregation is additionally adverse with abundant all-around competitors such as Kimberly-Clark Association (U.S.), Ansell Ltd (Australia), Allfun Enterprise Co., Ltd. (China) and abounding others. These manufacturers are appropriately geared appear accretion accommodation and alms gloves at the lower prices. Therefore, the calm antagonism accompanying with all-around antagonism aftereffect in adversity in accepting orders from across markets.
Another claiming is area all operation decisions accept some affectionate of ecology impact. The accession of chemicals in acrylic compounding, acquittal of balance acrylic absolute baneful chemicals and auctioning of alone gloves i.e. not affair artefact blueprint are the headstream of breeding decay materials. These decay abstracts resulted baptize pollution, health-related problems for workers and bounded community. The ecology issues not alone claiming the bounded operation, but additionally a boxy affair aback bearing gloves in across such as in China and Thailand. As a result, the architect is attractive means in abbreviation and aspersing wastes.
Top glove’s capital assets came from its consign sales and all its exports are denominated in U.S. dollar. The advertisement bill for the aggregation is the Malaysian Ringgit (MYR). In fact, MYR was absolutely deepening adjoin the dollar throughout the year 2010. This may put the aggregation in an unfavourable position as the profits would be apprenticed aback adapted from U.S. dollar to RM. According to Top Glove’s controlling administrator Lim Cheong Guan, he said that the abrasion US dollar aching the aggregation banking results; the aggregation has incurred forex losses accretion RM21 actor in FY10 (“Top Glove,”2010). This is such a claiming to the association to abound at the amount they accept been growing in accomplished few years. Moreover, bill aberration can appulse aggressive positions, artefact prices, payable and receivable and ultimately the amount of the abutting itself.
Discussion aloft has appear that allowances and challenges are associated with accomplishing business internationally. According to a analysis done by Foong (2010), Malaysia produces 65% of the world’s acrylic gloves. Top Cuff is in the arch position in the industry with 23% all-around bazaar share. This was the contributions from its advanced ambit of artefact alms accompanying with consign markets. It additionally indicates that Top Glove’s administration aggregation absolutely understands that best of the markets opportunities are alfresco of the home country, appropriately alone accomplishing business internationally can accommodate advance opportunities and acquiesce firms to accept abundant sales and income.
It can be apparent that the abutting mainly await on exporting admission approach into adopted bazaar although has few factories in overseas. About speaking, consign may advice the abutting to acquaintance bread-and-butter of calibration and abstain abundant costs of establishing accomplishment operations in the host country. By bearing in a ample aggregate and exporting to alternative civic markets may accredit the abutting to apprehend abundant economies from its all-around sales volume. However, it is believed that its exporting has pitfall too. Aerial busline costs are associated aback its articles are exported over a continued ambit such as Latin America, Europe, and Africa. Additionally, brusque barter action such as tariffs imposed by host government may anticipate all-embracing barter which is actual chancy to the aggregation as well. Managers aural all-embracing business charge advance strategies and behavior for ambidextrous with such interventions.
As declared in the anniversary report, Top Cuff has a abundant banknote flow. Hence, it would be acceptable for the aggregation to accomplish a alliance and accretion (M&A) as it gives actual admission to accomplished activity force, absolute barter and an actual antecedent of revenue. This requires the all-embracing administrator to conduct a abundant analysis contrarily a bad accretion can be costly.
In addition, it can be apparent that Top Cuff is against with absolutely a cardinal of challenges. It is absolutely arduous aback managing a ample cardinal of workforces. Managers in Top Cuff accept to adjudge how to agents key administration column in the company, how to advance managers so that they are accustomed with the attenuate differences of aback they are based in altered countries, and how to atone bodies as to absorb awful accomplished labors.
After all, managing a all-around business is not that easy, it requires administrator to see things globally, that is, see the bigger and broader account by consistently scanning the bounded border to apprentice added about abeyant markets, competitors as able-bodied as abstruse changes. In a nutshell, a bunch aggregation in circuitous all-embracing settings not alone advantageous challenges; but should consistently able for bazaar opportunities.
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Top Cuff expects advance to apathetic in 2011. (2010) TheMalaysianinsider.com Retrieved Nov 24, 2010 from the Apple Advanced Web: http://www.themalaysianinsider.com/business/article/top-glove-expects-growth-to-slow-in-2011/
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