MOD003497: Kojo Furoa's International Business Challenges

This report provides a comprehensive analysis of the challenges faced by Kojo Furoa, a Japanese multinational manufacturing company operating in the UK. The company is grappling with issues such as foreign competition, decaying infrastructure, high tax rates, costly labor, a negative business environment, declining revenue, bankruptcy of a major supplier, and mismanagement. The report details the advantages Kojo Furoa possesses, including its skilled workforce, strong local relations, customer relationship management, and corporate social responsibility initiatives. It outlines the current condition of the company, the negotiation agenda, and the negotiation theory stages. Furthermore, it presents suggestions from key stakeholders, including the Regional Division Manager, Board Member, Labour Union Representative, Supplier Consortium Representative, Environmental Activist Collective Representative, and Local Councillor. The stakeholders discuss various aspects of the company's situation, including cost-cutting measures, offshore operations, labor demands, supplier issues, environmental concerns, and political factors. The report concludes with recommendations for Kojo Furoa to address its challenges and improve its performance in the international business environment. The primary focus is on the stakeholder negotiation process and the different perspectives brought by each stakeholder group.

Managing International
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Issues faced by Kojo furoa in recent times.............................................................................3
Advantages of Kojo furoa which provides competitive edge to the company ......................4
Current condition of company................................................................................................5
Negotiation agenda of Kojo furoa..........................................................................................5
Negotiation theory and its various stages...............................................................................6
Suggestions from expert stakeholders of company in meeting..............................................7
RECOMMENDATIONS.......................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...............................................................................................................10

INTRODUCTION
This case is about Kojo furoa which is a Japanese multinational manufacturing company.
Kojo furoa operates large number of operations in city of cardown in North East England
where it has established a manufacturing plant. The company is operating in UK since
establishment of its first manufacturing plant in 1980. Headquarters of this corporation's
European union are also situated in UK. Company has good history related to its long time
survival and generating good revenue from market [INTERNATIONAL BUSINESS, 2021.]. In
recent times company is facing off many issues in market of UK which are directly or indirectly
impacting company's performance. In order to get rid from these issues the organisation wants to
shift its operations in other country in near future to eliminate business risk and to carry out
smooth operations in market.
Issues faced by Kojo furoa in recent times
 Foreign competition- In era of globalisation several foreign companies are entering into
market which creates a healthy competition. Increasing foreign competition in market has
affected negatively on the revenue generation of Kojo furoa. Foreign competition in
recent times has increased in UK which is major issue for Kojo furoa. It is mainly
impacting on revenue of company. Government of UK is continuously focusing on
programmes and policies to encourage foreign investment(Ali, and et. al., 2021). This has
become a major threat for Kojo furoa which is a big challenge for business.
 Decaying infrastructure- Due to passage of time,the company has faced issues with its
infrastructure. Factories and plants of company are requiring huge maintenance which
requires heavy capital. To enhance production Kojo furoa has to soon renovate its
infrastructure. Machinery of current manufacturing plant in east England is depleting day
by day and most of the machines has become obsolete as well. Modern technology
machines are required at current plant location for quality production.
 High tax rates- In recent times government of UK has increased direct taxes on
production of goods and services. This increase in direct taxes has made Kojo furoa
financially weak in market. Monetary policies implied by UK Government are also
affecting the financial functioning of Kojo furoa.

 Costly labour- As standard of living is rapidly increasing in UK the cost of labour is
increasing day by day. This has resulted in increasing cost of production (Castillo, 2017).
Labour of company is also demanding to increase their wages as soon as possible.
 Negative business environment- In recent times company is facing several labour
protests and environmental issues. External environment of Kojo furoa is not in favour as
of now for smooth business operations. Political factors arising out in UK are impacting
business of the company.
 Declining Revenue- Due to increase in foreign investment in UK, Company is facing a
high decline in its revenue. Even after putting a lot of efforts related to revenue
generation Kojo furoa is unable to generate proper revenue from market.
 Bankruptcy of major supplier- A major supplier of this company went bankrupt
recently. It has created a shortfall in raw material availability from the market. Company
used to take raw materials from the respective supplier in bulk quantity. After bankruptcy
of supplier it has become more expensive to manage raw material.
 Mismanagement- In recent times there is a lot of mismanagement observed in Kojo
furoa in current year. Grievances from employees of company has also increased in
recent times. Mismanagement has created heavy impact upon functioning of business.
Advantages of Kojo furoa which provides competitive edge to the company
 Number of employees- Number of employees working in Kojo furoa is high and
employees are dedicated for work and are skilled as well. Company is having good
number of employees who are expertise in their respective fields.
 Local Relations- The organisation has strong relations with local people which is a
key factor in having competitive advantage over other companies. Support from local
community is another strength of Kojo furoa. It is one of the most desirable workplace
in UK (Cutcher-Gershenfeld, 2017). Company also has good relations with
government of the country which helps it to overcome through political challenges.
 Customer relationship management- Company has a separate customer relationship
management system which is involved in attracting customers and enhancing brand
value.

 Corporate Social Responsibility- Kojo furoa performs a great role in enhancement of
society as a whole. Company contributes 12% of its annual turnover to social sectors
like education,child development,NGOs,etc. Company has performed well in doing
social welfare in recent years.
Current condition of company
Due to arising of several issues in the working environment of company, current manager
has decided to call a meeting of stakeholders of company so that it can be decided that whether
company has to shift its operations to some other country or not. It has to be decided early that
what best company can do to overcome this situation (Dorjee, 2020). Major stakeholder
representatives will try to provide best solutions to the manager which will directly help in
positive transformation of business.
Following are major stakeholder representatives who will play an important part in meeting of
organisation
 Regional Division Manager (Company Executive)
 Board Member (Shareholder Representative)
 Labour Union Representative
 Supplier Consortium Representative
 Environmental Activist Collective Representative
 Local Councillor (Local Government Representative)
Negotiation agenda of Kojo furoa
According to above mentioned situation of the company, profit of Kojo furoa is declining
on daily basis as well as its sales and production markets are also diminishing. The company is
facing off several hurdles in market of UK which are impacting its performance as well as
decreasing its market value. Current Chief operating officer has decided to cut cost of production
by deciding to shut down its manufacturing plant in UK. Chief operating officer has also decided
to start manufacturing off shore selecting a new country for business. For the above mentioned
purpose company has also hired independent professional mediator. Immediate solution is
required in this situation as company doesn't wants to face continuous loses and also wants to
minimise risk associated with its business operations. As company is focused on shifting its
operations it wants favourable responses from stakeholders along with proper explanation.
Company has invited major stakeholders who are representatives of all persons related to

business (Johnson, 2019). All aspects related to current situation of company will be discussed
by experts in meeting to ensure a precise outcome.
Negotiation theory and its various stages
Negotiation Theory- Negotiation theory is a practice done in order to solve a dispute
which arises in an organisation due to any conflict [NEGOTIATION THEORY.2021.]. Under
negotiation theory a final agreement is prepared after drawing a proper conclusion from a
discussion. Individuals search for best possible outcomes drawn after discussing major problems
of organisation in a meeting.
Negotiation theory includes following stages
 Preparation- Preparation is initial stage in negotiation where timings and location of a
negotiation meeting are decided. Generally a company chooses its meeting hall and
invites stakeholders for a meeting,company may also choose outside location for
conducting negotiation (Lande, 2017). It is performed by organisers of a meeting in order
to create a good environment for the meeting. Preparation includes setting up an
environment which is appropriate for a negotiation meeting.
 Discussion- After preparation of a meeting,discussion is performed at secondary stage
which includes understanding of current problem related to situation. Stakeholders briefly
analyses current situation in order to evaluate favourable solutions for the current
problem. In depth discussion is required in formulate a healthy negotiation. Discussion in
other words is sharing of ideas,thoughts,values and emotions for reaching a conclusion.
 Clarifying goals- Once a discussion is performed,clarification of individual goals is
done. It is very important to know desires of every individual who is present in meeting.
It is essential to know goal of every person in an organisation in order to perform a
proper negotiation (Mikhieieva, 2017). In an organisation it is important to know
individual goals as they play a crucial role in formulation of strategy for an organisation.
 Negotiate towards a win-win outcome- It is objective of negotiation to draw a win-win
outcome which means every person present in the meeting should feel positive that they
have contributed something for organisational gain.
 Agreement- Agreement should be prepared at final stage in a negotiation. After drawing
proper conclusion from the meeting all suggestions which are given by experts in

meeting should be considered as an agreement. Agreement can be oral or written
depending on nature of negotiation.
Suggestions from expert stakeholders of company in meeting
Major topic of discussion in meeting is whether to shift operations of company to off
shore or not. A brief analysis and discussion went for hours with outcome of following
observations by different experts
 Regional division manager has suggested to cut off cost related to its production as well
as to find out new raw material suppliers for Kojo furoa. Regional divisional manager has
asked for performance appraisal of all employees. Manager has also suggested to
establish a new customer relationship management system which will attract buyers from
marketplace.
 Shareholder Representative has suggested to shift operations of company off shore as
they are facing huge loses in their capital investment. Shareholder representatives are not
getting any premium on shares invested by them. They want their shares to grow in
market as other companies which are performing manufacturing in market are getting
good returns from market (Oliveira, 2017). It is concluded by representatives that if in
near future company will not lead its business then it would be extremely hard to survive
in market.
 Labour union representative on the other hand wants the fulfilment of demands which
are raised by workers of the Kojo furoa during their protests. Demands related to salary
and wages increment should be fulfilled soon so that workers can work with full
enthusiasm. It is suggested by labour union representative that continuous strikes in
company can lead to business harm as well as it may lead to cut production output.
 Supplier consortium representative agrees to the point of shifting operations to off
shore as major supplier of Kojo furoa has gone bankrupt. Also there is lack of suppliers
who provide raw material at cheap rates to the company. Supplier are backbone of
production unit so it is necessary to keep suppliers of company ready 24*7.
 Environmental activist collective representative suggests that several external
environmental factors like labour protests,declining revenue and high external risk from
external environment in market is increasing day by day (Pereira, and et. al., 2021). So
company may further seek opportunity to establish its plant at a good place in other

country. Environmental activist has suggested in near future company can implement
policies which are beneficial for a business environment.
 Local counsellor has also advised company to leave current market due to increasing tax
rates in UK. Counsellor has also suggested that political factors of UK may also impact
business in near future. Local counsellor has suggested to implement a bunch of major
policies related to local wholesale operations.
Most of representatives in meeting has suggested to adopt business models and to implement
them soon with favourable conditions
1. Business to customer- It is a business model which in which a business directly sells its
goods or services to the customer. Business to customer model is generally used in e-
commerce industry where an online platform sells its products and services to customers
directly. It is used most often in today's world as consumers are getting attracted towards
online shopping. Kojo furoa may use online platforms directly to sell its manufactured
goods to customers. It will help company to gain market growth at new marketplace in a
short span of time.
2. Business to business- It is a business model where business directly sells its products and
services to another business. In this model a business supplies materials directly to
another business (Sandvik, 2019). Transactions in business to business model are of high
value and are in bulk quantity. Kojo furoa can use this business model in order to gain
competitive advantage as company may purchase raw materials from another company
and continue its operations.
3. Customer to business- In this business model customers directly sell products and
services to a business. Transactions involved in customer to business model are short and
have less value. Kojo furoa can adopt this business model in a long run and can directly
buy goods from its customers.
RECOMMENDATIONS
Kojo furoa is currently stuck in a situation where it is getting huge loses at the
marketplace. Company is facing several issues which are putting a burden on company to shut
down its operations in UK. As a result company wants to operate its business off shore. After
negotiation meeting and a brief analysis of the case it is recommended for Kojo furoa to adopt
suitable business models in a precise way for conducting its business. Company should follow

the precisely agreement which came out from negotiation meeting. It is recommended for the
company to select a new location for establishing its manufacturing plant where there is a good
availability of raw materials so that it conduct its manufacturing successfully. Company may
establish a risk management system for new marketplace in order to minimise the risk associated
with the business (Stephens, 2020). Kojo furoa should also briefly analyse tax policies of
different countries in order to maximise its revenue. It is recommended for the company to hire
experienced persons for new jobs in a new country. It is also recommended for the company to
maintain proper accounts related to transactions of the business to ensure less chances of
financial loses.
CONCLUSION
From the above stated report it can be concluded that Kojo furoa has to choose a country
which provides best opportunity for new multinational companies start-up. Company has to
search for a country which has favourable political and economical conditions so that it can gain
a rapid growth in short span of time. After brief assessment of the following case it can be also
concluded that to achieve desired goals in future it has to focus on time so that there should not
be any delay in conducting further operations (Ting-Toomey, 2017). It is also recommended for
company to briefly analyse upcoming marketplace with help of experts so that it can minimise
risk associated with respective market. In order to establish a new manufacturing plant Kojo
furoa has to focus on appropriate funding sources so that it can find best financial institution for
loan assistance. Organisation has to also focus properly on recruiting new employees for the
company (Williamson, 2018). As company is going to start its operations in a new country it has
to keep an eye on culture management. For rapid growth company may do segmentation of
market and can also divide its goals in timely basis.

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INTERNATIONALBUSINESS.2021[ONLINE]Availablethrough:<https://
www.internationalrelationsedu.org/what-is-international-business/>