The Global Decision Management

This essay aims to assess some of the most important managerial choices Triumph Motorcycle should take into account when pursuing one of the external markets, particularly Russia, Argentina, or China.

In order to determine which country is likely for the company, the article will assess the conditions for conducting business in each of these locations, including the political climate, the legal system, regime practices, and the geopolitical landscape.

Russia

Russia currently has the eighth-largest economy in the world, but by 2020 it is expected to rise to the fourth place (Polasky et al. 2011). This is a good indicator for business. However, the debacle between Ukraine and Russia has altered the setting of the bilateral ties and investment engagement between Russia and most western countries especially the United States. The stance advanced by the US and the global community that has seen sanctions slapped against Russia are wanting for Triumph Motorcycle to target the Russian market. The reality is that the Russian market looks promising with a huge population, a booming economy, highly educated and technical expertise and majority of people with disposable income, and yet, the geopolitical tension remains the country’s worst hindrance for business.

Because of the current sanctions, many western countries have put on hold economic activities with Russia. Moreover, owing to the shrinking commercial ties, the economic vitality of Russia has been hurt (Arnold, 2016). It is easy to argue that irrespective of the sanctions, Russia remains a promising exporter destination for Triumph Motorcycle because of a highly knowledgeable, classy and discerning customer. Again, because of the Russian regime’s promise to maintain the negotiated rates makes Russia a prospective target market for investment. Russia has the most proficient WTO dispute resolution approach. Trading regimes are country specific; as such this is good for foreign direct investment. Again, because of the 2018 World Cup, Russia looks prospective for UK investors (Polasky et al. 2011). Moreover, the country’s skilled and competitive workforce makes it ideal for great for investors.

Above all, there are many drawbacks that make Russia unreliable for Triumph Motorcycle. They stem from an oppressive supervisory regime, inadequate intellectual property rights (IPR) safety checks and execution. Moreover, far-reaching corruption and contemptible rule of law; erratic application of laws, no transparency, uneven playing field for competition owing to the continued presence of state-owned corporation that dominate strategic sectors of the economy (Arnold, 2016). The regime overbearing stance makes it unfavorable for international businesses. Despite those prospects, Russia may not be the best option for Triumph Motorcycles because of the negative factors enumerated above.

Doing Business in Argentina

To attract foreign investors that create job opportunities while promoting the development and diversification of local exports, Argentina has put in place a number of incentive programs. These programs include relocation and industry incentives, technology, and investment funding and export incentives. Argentina is a resource-rich nation; this is an important aspect to foreign companies. In addition, it has a highly educated population to provide required human capital. Moreover, Argentina has a friendly environment and resources such as infrastructure, and unconventional hydrocarbons for foreign investors (Polasky et al. 2011). As the nation moves ahead to address its economic issues and opportunities, foreign investors are likely to increase. This is an opportunity for Triumph Motorcycles to explore the Argentinean market. Argentina has been enjoying the unprecedented macro-economic balance, which means that there is an increase in the level of foreign as well as local investment. Besides, Argentina presents a solid foundation for resources that attracts investments; various profiles of competent human capital with an attractive skill set (Polasky et al. 2011).

Nonetheless, in the recent past Argentina has been facing declining external demand caused by downturn in Brazil, increased prices and foreign currencies (Slutzky, 2017). Furthermore, infrastructural facilities require major improvements, which can largely affect the movements of goods and services. Again, slow economic growth, restrictions on imports and foreign exchange, which makes Argentina economy uncertain for a foreign company.

In 2014, Argentina had an inflation rate of 30% and about 20 to 24% in 2015 that led to increased costs in turn presents a challenging environment for foreign company, particularly as the actual exchange rate has considerably appreciated since the 2014 devaluation. High inflation also means that consumers lack the buying power. Moreover, restrictions on profits and licenses discourage foreign investments (Slutzky, 2017). There is also inadequate transparency makes it hard for an organization to expand in Argentina. Regardless, of these challenges, there are signs of improvements since the recent economic policy intends to amalgamate exchange rates, normalize relations with oversea creditors, improved governance structures, realigned utility costs and elimination of distortion on business. In addition, Argentine is willing to export rural management, an aspect that attracts foreign investors to expand in the areas.

Argentines also have the experience, technical and organizational expertise, which makes Argentina an investment hub. In the previous five years, internal and external demands have been high in turn contributing to greater competitive advantage. As a result, Argentina supports the import replacement that is based on the global peso framework, a policy that boosts numerous industries in the nation (Raghunath & Rose, 2017). With a high economic strategy at local and global level, it is a good place for in automotive and motorcycles market. In 2016, auto sector introduced about 80 models and it is project to increase even further for domestic and export. There are also intense developments in domestic auto-part manufacturing.

Doing Business in China

Although motorcycle trends are historically significant, the appetite for motorbikes is dwindling. However, a new wave of demand for large engine bikes largely for leisure is growing rapidly. For instance, in the recent past, local sales reached 14,600 this is represented by an increase in about 231.82% (Raghunath & Rose, 2017).

Following the development of leisure and entertainment motorcycle sector, Chinese demand for personalized lifestyle, stronger performance, design, sophisticated motorcycles as tools for leisure as well as entertainment is promising for Triumph Motorcycles. Therefore, local and foreign companies should focus on Chinese market by investing in leisure motorcycles. Furthermore, firms must launch motorbikes to take advantage of this rising popularity and demand. Chinese market is heading for low-end and high-end motorcycles represented by 80% and 20% respectively. From the consumers’ standpoint, the demand for leisure motorcycles is primarily from bike fans. The consumer costs for this segment is approximately RMB 20 to 30 thousands while their main choice has been Japanese and European motorcycles prior to the emergency of leisure ones (Raghunath & Rose, 2017). Industry experts in this group of consumers are about 20 million of China’s population and the yearly consumer market is over one billion Yuan (Tian 2016). This pushes a firm to manufacture innovative motorcycles to appeal to their leisure and entertainment needs. Introducing motorcycles for leisure and entertainment purposes will attract many Chinese and they prefer high-tech and trend motorcycles. However, due to government policies on motorcycle speed many Chinese are not aware about leisure motorcycles, which lead to their inadequate demand (Slutzky, 2017). In addition, outright bans in many China’s urban centers as the government fosters security and prevents pollution have reduced the demand for motorcycles. These regulations have contributed to significant growth of scooters, the second largest segment of motorcycle in Chinese market. It is projected that by 2018, the global yearly sales of leisure motorcycles would reach about 18.7 million, with a large percentage being sold in the Chinese market (Tian 2016).

Owing to the fact that China has a huge gap between the poor and the rich, there is a considerable imbalance in development. In a number of rural areas, low-end motorcycles are a major transportation mode. Again, buying power in rural regions is low while demand for costly cars is small. Therefore, Triumph Motorcycle can be successful in China as long as it produces luxury bikes that are supplemented by high low-end motorcycles with low maintenance cost. But again, it is projected that low-end motorcycles will subsist for some time, and gradual prosperity of rural regions will contribute to low-end market decline (Tian 2016). Such projections indicate the end of low-end motorcycles and a new start. China’s motor industry is in demand for high tech and innovative motorcycles.

Additionally, for Triumph Motorcycles to expand in China, it has to take time to analyze the situation. Evidence shows that decision markers with higher need for achievement have the desire not only to control but also affect the conditions they operate (Raghunath & Rose, 2017). Again, they have the propensity for formal and rational decision formulation while carefully analyzing conditions to proactively manipulate and support strategic planning and structures for assessing control and success in the preferred nation (Polasky et al. 2011).

The catch for expanding in China market is introducing leisure motorcycle that majority of Chinese firms lack especially cooling engines. Nonetheless, Triumph Motorcycles has to significantly invest in research and development in order to penetrate Chinese market. This is because Chinese adventure spirit began recently. Compared to American consumers, Chinese clients go for safety that makes it challenging for Triumph that manufactures leisure motorcycles. However, for Triumph to make a name in China, it has to be ready to compete with more than 800 motorcycle companies. The majority of which produce low-end motorcycles and a few high-end like Honda and Yamaha that penetrated the Chinese market in the 80s. Another problem with China is that approximately 200 cities have put in place limits on the use of motorcycles due to safety issues and noise pollution. For instance, Beijing has about 20 million people and only 25,000 motorcycle permits, a figure that has been constant for some time. Those wishing to have motorcycles have to acquire a license from those in circulation and it goes for more than 26,000 Yuan that rises steadily (Raghunath & Rose, 2017).

Although firms have grumbled, few towns have indicated to do away with the quota system. Customers for leisure motorcycles are primarily from the outskirts of big towns because the residents have money and are not affected by the quota systems. This can adversely affect the sales of leisure motorcycles since urban dwellers have disposable income and are ready to spend on leisure and entertainment. By and large, China is the most favorable for Triumph Motorcycles since urbanization will produce additional mini-towns leading to a high demand for leisure motorcycles. Again, if the Chinese government abolishes the quota system, the demand for leisure motorcycles can further increase.

Conclusion

From the aforementioned analysis, all three markets are prospective for Triumph Motorcycles. However, after a close review of the different markets, the overbearing control of the Russian regime, rampant corruption and unfair practices that skew competition to favor state-run corporations may threaten the penetration of Triumph Motorcycles. Nonetheless, the economic recession in Latin America and a high spike in consumer spending make Argentina unfavorable. In the end, China shows indicators of a lucrative market for luxury bikes. Numbers demonstrate that more than 14,000 luxury bikes were sold in China in the recent past. Moreover, the demand for highly sophisticated bikes is increasingly on the rise. This is a good sign for Triumph Motorcycles. Again, it appears like the Chinese consumers have a preference for Japanese and European bikes, which is even promising for Triumph Motorcycles.

References

Arnold, A., 2016. The True Costs of Financial Sanctions. Survival, 58(3), pp.77-100.

Polasky, S., Carpenter, S.R., Folke, C. and Keeler, B., 2011. Decision-making under great uncertainty: environmental management in an era of global change. Trends in ecology & evolution, 26(8), pp.398-404.

Raghunath, S. and Rose, E.L., 2017. International Business in the Context of Emerging Markets. In International Business Strategy (pp. 1-14). Palgrave Macmillan UK.

Slutzky, P., 2017. Doing Business in Emerging Markets-The Benefits of Being Private.

Tian, X., 2016. Managing international business in China. Cambridge University Press.