Tuvalu Wines Expands: Case Study

Introduction

In business companies embark on international expansion after being successful in the local market. Under normal circumstances the local market is always regarded as the testing ground of the business soundness. It is along this lines that the Tuvalu wines company which has greatly been successful in the domestic market seeks to venture in the international market. The wine company now seeks to venture in France and other countries as it rolls out its globalization strategy. Tuvalu wines therefore have a great challenge ahead of it. This involves the staffing of the newly acquired company. The executive directors have henceforth planned a meeting so as to address these challenges. The paper analyzes the options at the disposal of the directors in their bid to finalize the global acquisition of the French company.

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Tuvalu Wines

Tuvalu Wines is stationed in Stellenbosch South Africa. The company has fields from which it cultivates grapes though it also involves other fields from which it buys the fruits. The company offers it s wine products in the name of several labels and brands. The most common ones are the Tuvalu River and the Tuvula estate. Similar to the other companies in the area Tuvalu wines has noble wine houses. The company has had a lot of customers from the tourist sector which has formed its benchmark for its reputation at home and abroad. The inception of democracy in the country during the 1990s has played a crucial role in the prospects of the company. This period ushered in external trade which opened the door for the company to scale up its operations. The first countries the company ventured in during this period are UK, USA and Scandinavia. The success of the company’s international operation has led to the sanctioning of the acquisition of an existing company in France. This will be significant in the history of the company since it will signify the first direct investment foray.

The company has since the days of yore operated through agents and several intermediaries. The target of acquisition is a company that has recorded average performance in the home country as well as in the European peninsula. Studies have indicated that the company is a fertile ground for an international bid for business (Matasar 2006, 172). However Tuvula has a long way to go as far as competition is concerned since due to the past of its home country the company trails the rest as far as the global stature is concerned.

The other companies have been in the global business for a long time now and have therefore established themselves and made a niche for themselves. However the company and its home-ground opponents are gradually gaining global stature in the wine business. Soon they will be major global wine companies. The company has since stationed itself for the global market and has made several plans to elevate its status in the international business environment. Tuvula has been forefront in advancing its technological situation among other aspects of its business nature. This has been a calculative move by the company which aims to make a niche for itself not only in Europe but the entire world all together.

Expansion Plans

Due to the impending foray in the European peninsula the company has had quite a number of programs in order to spear head the acquisition plan and set the stage for the company’s globalization initiatives. It is along these lines that the company’s top decision making organ has scheduled a meeting to explore the idea of making a foray into the international market. Executive managers are set to have a crucial meeting so as to agree on the methodology of handling the French acquisition plan. Chief among the pertinent issues are the ways in which to plan for the personnel of the new acquisition.

The board has to make a decision on how to approach the human resource dimension of the French unit. The nature of the issue at stake makes the whole process kind of complicated (Zanni 2004, 139). This is one of the reasons why the mangers have a daunting task during the meeting since they are handling a technically sensitive issue. However the executives seem optimistic that the French operation offers vibrant opportunities for expansion. This has set the tone of the meeting since there are so many expectations about the outcomes. The area of production of wine is a wide open arena waiting to be improved. The marketing segment consequently offers a fertile ground for the company to pull up its socks.

The issue of human resource of the new acquisition offers huge challenges to the decision makers. This is so because there is a lot of difference between the South African market and the French one. The executives must take great care when making the decision concerning the managerial positions of the new plant.

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Crucial Factors

Staffing decisions often present a challenge to many business organizations. The case becomes more complex when the staffing decisions involve subsidiary companies in foreign countries. The business environment differs from country to country. When masking staffing decisions companies are advised to take great care so as to make the right choice. There are various factors that determine the staffing decisions of foreign countries (Chaney and Martin 2006, 48). The Tuvalu wines executive directors will be called upon to carefully consider these factors so as to guide them in their daunting task of staff selection.

The position of marketing manager holds a lot of relevance to a company that endeavors to emerge as a global leader in whichever area. With the evolution of the marketing concept, marketing has replaced production as the most important segment of the organization. Unlike the days of yore when all a company was to do was to produce goods and sell them at the cost of production with a slight margin of profit, modern business environment not only requires the production of gods but also the marketing of the same. Marketing is therefore the single most important department in any company. The success of the department means the success of the company and vice versa. The selection of a marketing manager must therefore be done through the consideration of many factors.

Tuvalu wines therefore are presented with a challenging task of identifying who to take charge of its marketing endeavors at the French acquisition. The dilemma facing the company involves whether to select French national or a south Africa nation a as the on e in charge of the French acquired company‘s marketing portfolio. The first consideration should be the professional qualification of the person. Before deciding whether the person should be from the parent country or not the executives first must ascertain the professional background of the candidate (Hitt et al 2008, 23). The factors to be considered here include:

  • Academic background
  • Professional experience
  • Age
  • Global orientation

The countries of origin of the candidate will therefore e be ascertained after the relevant candidates have been short listed for the appointment. The executives must keenly consider various marketing aspects when selection the origin of the appointee. The company’s future performance will be greatly compromised unless the right criterion is adhered to when making the choice (Charters and Carlsen 2006, 96). The following is the analysis of the whole scenario of the three options available for the company:

  • French national
  • Parent company national
  • Third country national

French National

Tuvula wines executive directors have an option of selecting a French national to the position of the marketing manager of the new acquisition. Such a decision will go down well with the company’s prospects bearing in mind that this is one the first direct investment. Being a globalization initiative by the wine company it will be wise for the directors to opt for the selection of a French national so as to show its commitment to diversity. First and foremost the selection of a French national to the position will send a positive message towards the local customers who are crucial in the company’s future prospects. If the company fails to make a good impression among the locals then its prospects are essentially doomed.

One important way of connecting with the local business environment is by having one of their own as a marketing manager (Brostrom and Brostrom 2008, 191). Apart from that, the issue to be considered is the European business environment. In fact the basic idea is to capture the French domestic business environment and looking forward to the entire European market. The right kind of candidate for this position will therefore have to be a person who has wide experience in both French and the entire European business environment. Therefore selecting a French national is in the best interests of the company as far as its global endeavors are concerned (Flemming 2004, 118).

Parent Company and Third Country

The selection of a marketing manger for the new acquisition should not involve candidates from other countries a part from France. He Company stands to gaining should it appoint a local to the position. People from the other countries might not be conversant with the French business environment.

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Other Considerations

Human resource is very crucial in the whole endeavor of a business organization. Tuvula wines have a new acquisition in France and the task at hand is the selection of a HR manager. Bearing in mind that a company’s most important assets are human resources, the company must take cognizance not to select the wrong person to the position. The three dilemmas for the Tuvuli wines executive directors is whether to select a French national, parent company national or a third world national. However the first consideration for the selection of human resource manager is relevant professional experience. This should be followed by the necessary academic qualification. The country of origin therefore comes third in the list (Hill 2008, 372).

  • Professional experience
  • Academic qualification
  • Country of origin

Professional Experience

The candidate for this position must have the necessary experience in the wine industry for a minimum of ten years. This should be followed by five years of purely global operations. The remaining time should have been spent in the French or European business environment. This will ensure that the candidate is conversant with the business operations in Europe and France in particular (Jenster et al 2008, 113).

Academic Qualification

The person to be selected must have a minimum qualification of masters’ degree in human resources from a recognized institution. The candidate should also have additional certifications in the same line. This should include industrial personnel, labor relations among others.

Country of Origin

The candidate for the personnel position can come from any country as long as he or she has been working with the company for a minimum of five years. However a South African national will be preferred so as to spearhead the company’s uniform policy of human resource (Matz and Thach 2004, 69).

Conclusion

Globalization has been the trend in the modern business environment. Companies who have since the days of yore been restricted to their national background are now making forays in the international market. Tuvula wines of South Africa are no exception. The wine company with a long history of operations in the country has been participating in international business through intermediaries for a long time now. However with the successful acquisition of a French firm, the company wants to launch its globalization strategy. This marks the first direct investment by the company in a foreign market. The challenges presented to the company by this acquisition are great. The executive directors who happen to be the top decision makers of the company find themselves in a dilemma. First and foremost is the issue of staffing the new acquisition. The directors have therefore scheduled a meeting to discuss the strategy to use in approaching the entire issue. However at the heart of the challenge is the selection of a marketing and human resource manager of the French company.

The three options at the disposal of the directors the country of origin of the candidates for the job. Whether to select them from France, South Africa or any other country is the main dilemma. However as much as the country of origin plays a crucial role in the whole process, priority should be given to the other areas also. These include the professional background of the candidates as well as their relevant experience in the industry. The appointees must be vetted critically so as to ensure that they meet the set qualifications. For the position of the marketing manager a French national with great experience in the wine industry should by appointed. This will ensure that the company makes a god start in the European market. A French national will be good for the company since he or she will be conversant with the local market environment. Further this will give the company a good name in the local market.

For human resource the same vetting procedure should be followed so as to ensure the appointees are the best of all. However, more focus should be given to the experience since human resource is a very sensitive area. A South African national with great experience in the same country should be selected for the position. This will help the company consolidate its identity in the international operations among the employees. A person from an alien country should not be given charge of the human resource department. Tuvalu wines have a great opportunity ahead of it since this is just the first foray in the global market. The company has a great future ahead of it in the global business.

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Reference List

Brostrom, Jack and Brostrom, Geralyn. The Business of Wine: An Encyclopedia. New York: ABC-CLIO, 2008.

Chaney, Lilian and Jeanette, Martin. Global business etiquette: a guide to international communication and customs. London: Greenwood Publishing, 2006.

Charters, Stephen and Carlsen, Jack. Global wine tourism: research, management and marketing. London: CABI, 2006.

Flemming, Louise. Excel HSC Business Studies. Washinton; Pascal Press, 2004.

Hill, Charles. Global business today. New York: McGraw-Hill Irwin, 2008.

Hitt, Michael et al. Understanding Business Strategy: Concepts and Cases. New York: Cengage Learning, 2008.

Jenster, Per et al. The Business of Wine: A Global Perspective. Copenhagen: Copenhagen Business School, 2008.

Matasar, Ann. Women of wine: the rise of women in the global wine industry. California: University of California Press, 2006.

Matz, Tim and Thach, Liz. Wine: a global business. Cornell: Miranda Press, 2004.

Zanni, Lorenzo. Leading firms and wine clusters: understanding the evolution of the Tuscan wine business through an international comparative analysis. Paris: Franco-Angeli, 2004.

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