MGMT20144 - Simcoa's Business Context: Regionalization & Economics

This report examines Simcoa, an Australian silicon producer, and the impact of regionalization on its business operations. It discusses how regionalization, as a business strategy, affects the company's growth and success. The report identifies various economic issues faced by Simcoa, including exchange rate fluctuations, interest rate problems, and the impact of inflation and deflation on profitability. To address these challenges, the report recommends hiring qualified employees, fostering strong relationships with exporters and importers, and implementing strategies to stabilize market conditions. Ultimately, the report emphasizes the importance of effective regionalization strategies in mitigating economic risks and ensuring sustainable business operations for Simcoa. Desklib provides this document as a student contribution to aid other students in their studies.

Running head: Management and business context
Management and business context

Management and business context
Executive summary
The primary aim of the paper is to explain the regionalization and its impact. Simcoa Company
has been taken in the task that provides silicon to the consumers in the marketplace. The paper
explains that how regionalization affects the success and growth of the firm. Furthermore, here is
the discussion about the economic issues that dealt by the company. At the end, some
suggestions have been given to reduce economic issues within the organization.
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Management and business context
Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Regionalization............................................................................................................................................4
Regionalization and economic issues..........................................................................................................5
Recommendations.......................................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8
Appendices................................................................................................................................................10
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Management and business context
Introduction
The report talks about regionalization strategy on a broad level. It highlights what regionalization
means and how it enables a company to function. It gives ideas that how a company should work
and achieve its target. It draws the example of an Australian company named Simcoa that
provides silicon to the customers worldwide. The report also gives recommended strategies that
generally provide a support to the issues raised in the companies. It talks about the economic
issues focusing on GDP, Net Profit, Per Capita Income, etc. of the company. More detail of the
task has been detailed below.
Simcoa is an Australian Company that deals in producing silicon to meet the customer’s
requirements. Silicon is considered as one of the largest producing product to meet the
Australian demand (Simcoa, 2018). The report therefore focuses on how Simcoa manages to run
its business with the help of regionalization strategy developed by its professionals. It suggests
ways to overcome the problems faced by Simcoa in business sector. The paper also discusses the
economic issues faced in Simcoa by its workers which ultimately results in affecting or
developing their growth. The economic issues will highlight the factors of business operation.
Regionalization
Regionalization means focusing on a particular location for business related work.
Regionalization is considered to be a business strategy that helps the companies in working
effectively by dividing the employees with different tasks. The companies under regionalization
work on one region before operating on the other. The strategy of regionalization follows
financing, marketing, managing and all the aspects that involve business (Van Langenhove,
2016). The area for which the company works is divided into many small segments and those
segments are called regions under which each and every employee is assigned to perform its
activity. The strategy of regionalization is an effective approach that a company must adapt in its
business place. Regionalization is a method to cater the needs of each and every part of the
company. It helps in facilitating the growth of business by covering all the issues and providing a
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Management and business context
strategy to make the business run on a large platform. The company has been able to achieve its
target by showcasing this effective strategy that can control the organization by splitting the
regions and assigning the work for every region to the individual workers. It is a common
strategy that each and every company follows (Shiryaev, Litvinenko, Rubtsova, Kolpak,
Blaginin & Zakharova, 2016). This is an appropriate method of working in the company by
serving every part of the country separately. It gives the company a chance to serve more and
more people from each and every region. The strategy has made it easy for the companies to
develop its reputation in the market. It gives them a chance to meet number of customers and
provide them with better facilities and services. The strategy is planned by the professionals
depending upon the population of the country (Lee & Gereffi, 2015). They take care about the
information and plan the strategy in a well planned manner. Regionalization is an approach that
provides greater opportunities to the companies and suggests ways to accomplish their target.
The strategy is widely known in the business sector as it helps in making the business operations
function. Hence regionalization is said to an effective approach in making the business
operations easy and effective. It gives the company an opportunity to create a satisfactory
environment to the employees also (Shaw, 2013).
Regionalization and economic issues
The economic development of the company depends upon the amount of profit a company earns.
Regionalization is strategic phenomena that enable the company to attain its goals effectively
and efficiently. It makes the working of the system easy yet company faces many economic
issues. The economic issues faced by the company can include increase in the exchange rate in
the importing and exporting the goods and services from other developed countries. Australia
being a developed country goes through the problem of economic issue by exporting fewer
amounts of materials if its exchange rate decreases. This is generally faced by Simcoa and is a
reason of issues rising due to the decrease in economic exchange rate (Elango & R. Wieland,
2014).
The other problem that the companies like Simcoa face includes the problem of interest rate. The
producers who maintaining the export and imports of business can imply higher interest rates for
the services they give to its customers and other big firms that it can become difficult for the
company to pay the required amount (Kotabe & Helsen, 2014). This leads to the economic issue
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Management and business context
for the company as paying for the goods at higher interest rate turns out to be a difficult problem
for the organization. This issue gives rise to other economic issues like decrease in the Net Profit
of the company, increase in the demand for the materials by the customers, decrease in supply,
etc.
The material used by Simcoa becomes a factor of economic crises when the importer charges
higher prices for them. This disables the company to buy further goods at such a price which
leads to decrease in the net profit of the company (Kolk, Lindeque & Buuse, 2014). The net
profit is the annual income of the company earned in the form of profits. These profits of the
company that are generated at the end of the year tell about the position on which the company
stands. If the company seeks for profits and attains it, this shows that it has a got good amount of
supply in the respective year (Munoz, 2013).
The economic issues like inflation and deflation is also faced by the company due to the increase
and decrease in the prize of the community (Lampel & Giachetti, 2013). When the prize rises the
company faces the problem of deflation in the business raised by the market and when the
company sees the problem of inflation it means that it has faced decrease in the prize value of the
commodity. For example, if the prices of the manufacturing product by Simcoa rises it will
become difficult for them to sell the product, this will create decrease in the profits earned by the
company, whereas, if the prize of the commodity of Simcoa decreases the company is unable to
make the amount of profits that it targets as per the quantity (Masteikiene & Venckuviene,
2015).
Recommendations
In order to solve such economic issues the suggested recommendations can be beneficial for the
company:
Simcoa can hire qualified employees who are capable in managing the business with proper
strategy. This will help in making the proper growth for the business by focusing on the
operation keeping in mind the economic issues that can be a hurdle and issue for the firm. The
qualified employees are the professionals who know how to work by following the norms of the
business properly (Stroeva, Sibirskaya, Khokhlova & Oveshnikova, 2014).
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Management and business context
In order to maintain the proper interest rate it is recommended that company must tie up with its
exporters and importers by managing their relationship positively. If Simcoa will maintain its
contacts it will become easy to import and export its trade. This will become beneficial for them
to attain resources on a required amount of interest. The good relationships can help Simcoa to
negotiate to the importers on their own prices (Lim, 2016).
To avoid the cause of inflation and deflation, it can be suggested that the market should follow
strategies for not letting the business face such problems by adapting ways to maintain stability
in the market. At the time of inflation, central bank of Australia can increase the bank rate. This
will make the commercial banks to lend fewer loans to the borrowers and therefore can circulate
more and more money in the market. At the time of deflation, the bank can decrease the rate at
which it provides the loan to the public and therefore it will increase their purchasing power.
Therefore, it can become beneficial for the company to invest in the market by taking loans from
the banks than from its borrowers (Ghobadian, Rugman & Tung, 2014).
The company can adapt qualitative measures which will help them to tackle the problems raised
in exchange rates, interest rates, and other economic terms.
Conclusion
On the above mentioned limelight event, it has been concluded that Simcoa manages and
operates its business even after failing due to the economic issues. It shows the areas which
disable the company to growth and attain its target due to the economic issues like rising interest
rates, the problems caused by inflation and deflation, issues on the amount of rates charged on
exchange, etc. it provides the recommendations that can help the company to overcome these
issues. Every organization faces the problem caused due to the factors of economy. In order to
avoid these issues it important for the organization to follow the regionalization strategy
effectively.
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References
Elango, B., & R. Wieland, J. (2014). How much does region affect performance?. Multinational
Business Review, 22(1), 4-14.
Ghobadian, A., Rugman, A. M., & Tung, R. L. (2014). Strategies for firm globalization and
regionalization. British Journal of Management, 25(S1).
Kolk, A., Lindeque, J., & Buuse, D. (2014). Regionalization strategies of European Union
electric utilities. British Journal of Management, 25(S1).
Kotabe, M., & Helsen, K. (2014). Global marketing management.
Lampel, J., & Giachetti, C. (2013). International diversification of manufacturing operations:
Performance implications and moderating forces. Journal of Operations
Management, 31(4), 213-227.
Lee, J., & Gereffi, G. (2015). Global value chains, rising power firms and economic and social
upgrading. Critical perspectives on international business, 11(3/4), 319-339.
Lim, G. (2016). The role of ethnic Chinese business networks in the regionalization strategy of
Singaporean fish farming firms. The SIJORI cross-border region: Transnational politics,
economics, and culture, 411-430.
Masteikiene, R., & Venckuviene, V. (2015). Changes of Economic Globalization Impacts on the
Baltic States Business Environments. Procedia Economics and Finance, 26, 1086-1094.
Munoz, J. M. S. (Ed.). (2013). Handbook on the Geopolitics of Business. Edward Elgar
Publishing.
Shaw, T. M. (2013). Beyond Regionalism?: regional cooperation, regionalism and
regionalization in the Middle East. Ashgate Publishing, Ltd..
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Shiryaev, D. V., Litvinenko, I. L., Rubtsova, N. V., Kolpak, E. P., Blaginin, V. A., & Zakharova,
E. N. (2016). Economic Clusters as a form of Self-organization of the Economic
System. International Journal of Economics and Financial Issues, 6(1S).
Simcoa.,(2018).Our company[online], Retrieved from http://www.simcoa.com.au/
Stroeva, O. A., Sibirskaya, E. V., Khokhlova, O. A., & Oveshnikova, L. V. (2014).
Regionalization of the innovation management process. Life Sci J, 11(8s), 1097.
Van Langenhove, L. (2016). Building regions: the regionalization of the world order. Routledge.
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Appendices
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