Jaya Development Sdn Bhd: Global Business Issues and Strategies

This report analyzes critical issues impacting global business, specifically focusing on the challenges faced by Jaya Development Sdn Bhd as it seeks to expand its operations globally, particularly in the Indian market. The report delves into key issues such as volatile foreign exchange rates, the complexities of regulatory compliance, and the challenges posed by underdeveloped medical infrastructure in India. It examines the impact of fluctuating exchange rates on profitability and the importance of risk management. Furthermore, it explores the intricate web of regulatory requirements, including trade agreements, labor laws, health and safety regulations, and environmental considerations. The report also evaluates potential entry strategies for Jaya Development, with a focus on the advantages of a joint venture approach, specifically highlighting the benefits of partnering with an established pharmaceutical company like Torrent Pharma to navigate the Indian market. The report emphasizes the importance of understanding local culture and economic factors for successful international expansion.

Issues in Global Business

Table of Contents
Issues Impacting the proposal...............................................................................................................3
Entry strategy........................................................................................................................................5
REFERENCES..........................................................................................................................................6

Issues Impacting the proposal
(A) Volatile Foreign Exchange
International business one of the competitive task for a multinational company due to the
high degree of volatility in the exchange rate. It is one of the major risk, which facing by the
business organization due to its uncertainty. There are large number of companies which
conducting their business in to other countries and transaction are based on global currencies.
If a changing rate not favourable for a corporation, it can wipe out profit and vice versa. In
the context of Jaya Development Sdn Bhd which wants to operate their business at the global
level would be impacted their business in positive or negative manner. There are various
currencies are exchange each and every day which prices are fluctuate on the basis of its
demand and supply and also various other economic factors. For instance, cited firm conduct
their business in to India and they increase their sales in a particular year. At the same time
now they want to exchange Rupees-US dollars. But due to weakening of particular currency
they would face loses which is not good for a growing company (Sethi and Schepers, 2014).
This shows that, exchange rate one of the major concern for a company which required to
develop a risk management approach in order to prevent such risk. The fluctuation on the
exchange rate is having negative and positive impact on the importing row materials and
exporting goods. There are various countries where products are cheaper due to its currency
exchange and vice versa. For example, Jaya importing row materials from other nation to
produced finished products. If exchange rate lower of importer country which required to pay
more for such product and increase its products price and reducing its cost.

(B) Regulatory Compliance
One of the most complex and critical issue in the global business is related with the
legislation and regulatory compliance. There are various laws and rules having a positive and
negative impact on their business and their current and future performance. There are various
policies which related with the international laws and at the same time domestic policies also
influence their business. For example, Jaya Development Sdn Bhd wants to expand their
business in to India. There are following rules of legislation having large influence:
Trade agreements: There are various countries who signed free trade agreement in order to
promote international business without any restrictions. It is also influence business socially
in the context of pharmaceutical corporation. As per the given case of Jaya Development,
India and Malaysia already signed FTA in the year 2011 which helps to the company to
easily conduct their operation in to India (Cantwell, Dunning and Lundan, 2010).
Labour and employment act: This is another issue which having larger implication on the
company performance. In the pharma companies, there are various labour laws which are
change over a period of time and one of the major concern for a cited enterprise. For
example, increase in the labour charge can reducing the revenue and profit if the company
which is not good for a growing company. In the context of India, according to minimum
wage act, 2017, in which the per day wages is approx. 350 which is quite higher lower than

other country. It provides the opportunity for Jaya to operate their production facility in India
which in a cost effective way.
Health and safety act: There are various health and safety act which should be followed by
the pharmaceutical company. There are various standardization and intellectual property right
and its impact on the performance. In the context of India, where various legislative issue
should be followed by the cited company. for example, The Factories act 1948, related with
the providing appropriate health and safety measures by the companies and also provide a
sound work environment.
Environmental issue: Pharmaceutical industry and its larger implication on the climate and
environment. Jaya Development required that to manage their waste management which
having adverse impact on the climate. Further, there are various chemical material used in the
production of medical products and its negative impact on the climate. Therefore, cited
company need to minimise use if such material and create an ideal image in the community
which provide a long term success to them (Zott, Amit and Massa, 2011). According to the
given case, Environment Protection act, 1986 which provide the guidelines to business
organization is to control water, air and soil pollution at their workplace and other area. They
need to arrange all necessary precaution which minimise climate issue and create sustainable
development of its operation in the long run.
(C) Under Developed Medical Infrastructure in India
It is significant for a company to identify new opportunity in order to meet their long tern
goals. In the context of this case, Jaya Development wants to open their business in to India
where medial infrastructure not up to the mark. There are large number of people who lived
in rural areas and depending on the government support of their media and healthcare
treatment. Therefore, it is too difficult for the cite firm to sustain their business in the longer
run. It required a long run and appropriate strategy which helps to provide success in the near
future.
Entry strategy
There are large number of multinational strategy operate their business at the global level.
They use a variety of entry strategies such as direct exporting, licensing, green field
investment, joint venture etc. But, selecting one of the most appropriate tactic need careful

analyses and evaluation and its effective implementation. Jaya Development required that to
choose one of the more suitable approach in order to enter India.
Joint Venture: This is another technique where two and more companies joint together and
start new business. This helps to provide an opportunity for a company and helps to expand
their business (Ostrom, 2010). in the given case study, Jaya Development can use this
approach which is more appropriate. The advantage of this company is sharing technology
and resources and gain competitive advantage in the market. There are various small and
large pharma companies operating its business in to India. Jaya Limited can communicate
with them and create a strategic alliance with them. For instance, Torrent Pharma which is
one of the fast growing company in India. They can make alliance with them and easily inter
in to the Indian market. This strategy provides a competitive advantage in the market because
Torrent pharma already having enough market share and distribution network. The another
aspect is related with the shareholders in the company which is based on the government
policies. Recently India allowed 74 percent FDI in the country which helps to in the staring
of business of cited firm. Jaya Ltd. can agree with 50/50 percent formula which is quite
impressive for their future growth.
Further, Jaya Development facing various issue in order to manage their business. these issue
can be different culture, investment risk and other factors. cited unit required that to
understand local culture, attitude, behaviour’s and react accordingly (Trade, Economy, &
Related Issues, 2016). If the company not get success they would be facing huge business
risk. There are also need to understand the economic aspects of the country. India which is
one of the leading economy approx. $2.3 trillion provide a long term growth and market
opportunity.

REFERENCES
Books and Journal
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Sethi, S. P. and Schepers, D. H., 2014. United Nations global compact: The promise–
performance gap. Journal of Business Ethics. 122(2). pp.193-208.
Cantwell, J., Dunning, J. H. and Lundan, S. M., 2010. An evolutionary approach to
understanding international business activity: The co-evolution of MNEs and the
institutional environment. Journal of International Business Studies. 41(4). pp.567-
586.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Casey, V., 2010. Imparting the importance of culture to global software development. ACM
inroads. 1(3). pp.51-57.
Gereffi, G. and Lee, J., 2012. Why the world suddenly cares about global supply chains.
Journal of supply chain management. 48(3). pp.24-32.
Ostrom, E., 2010. Polycentric systems for coping with collective action and global
environmental change. Global Environmental Change. 20(4). pp.550-557.
Online
Trade, Economy, & Related Issues . 2016. [Online]. Available through
:<http://www.globalissues.org/issue/1/trade-economy-related-issues>. [Accessed on
20 September 2017].