Section III: Operation Management (Part IV)

Key Recommendations and Figures

• Entry Mode:

• Promote using social media to get investors.
• To reach this target market of investors, creating a joint venture
• Human Resources:
• When hiring; factors to consider are pay, taxes, and benefits.
• Need to hire employees who already live in that area.

3.1       Entry Mood

The main way to enter a new market like Nashville is to promote using social media to get investors. Of course, getting investors to buy-in is not an easy task, as investors will not be easily persuaded with simplistic promotion in social media. One must utilize a special approach to reach the target market of investors. Joint venture is the path to open the market that we offer. Joint venture is a common way of combining the resources and expertise of two unrelated companies. This type of partnership usually offers great benefits, but it can also present certain risks, as such arrangements are generally very complicated.

As for the advantages of joint venture as follows:

·       access to new markets and distribution networks

·       increased capacity

·       sharing of risks and costs with a partner

·       access to greater resources, including specialised staff, technology and finance

·       use your joint venture partner's customer database to market your product

·       offer your partner's services and products to your existing customers

·       join forces in purchasing, research and development

Joint venture also has disadvantages to consider, such as:

·       the objectives of the venture is unclear and not communicated to everyone involved

·       the partners have different objectives for the joint venture

·       the partners bring in different levels of expertise, investment or assets into the venture

·       different cultures and management styles result in poor integration and cooperation

·       the partners don't provide sufficient leadership and support in the early stages

Base on the graph, Joint Venture is better for businesses long-term. While automation is not ideal in the short-term, they need some time to develop the business to the customer. Thus, making joint venture is suitable with our plan for new market in automation.

3.2       Human Resources

According to law, the minimum wage that an organization has to pay in this area, is $7.25 per hours. In addition, the termination law provides protection to employees, from their employers, who try to terminate an employee in retaliation for reporting illegal activities. This is called the “Retaliatory Discharge” statute. This concept of protecting employees who find the courage to speak up about illegal activities is extremely important to any type of organization. When employees have no fear in speaking out about unfair or illegal behavior, it creates a more comfortable and more productive environment. If employees are fearful of losing their job in response of speaking out, the corruption and unfair treatment happening will continue to grow.

On the other hand, vacation benefits is not a requirement from the state that employers have to offer. Such benefits include both of paid and unpaid vacation to their employees. In regards to maternity and paternity leaves, based on the regulation in Tennessee,  employers must provide unpaid time off to employees for pregnancy, childbirth and nursing an infant. Employees are able to leave, up to 4 months, if they are full-time worker for 12 consecutive months.

There are several independent contractor that have to follow which is:

·       Free from direction and control

·       Has necessary skills and training to complete job

·       Has a business location

·       Performs services for multiple customers

·       Sets own hours

·       Determines own price for contracted services

·       Not eligible for employee benefits

·       Provides equipment and tools used to complete job

·       Supplies materials needed to do job

·       Personally liable for errors and/or accidents

·       Files self-employment taxes

·       Has right to hire and fire workers

·       Must legally complete each contract

Then for requirement benefits which have three main issues which is Pay and Holidays like full-time employees will receive 11 holidays off with pay every year. Insurance such as Health insurance, dental insurance, and medicare supplement. The number of leaves an employee receives depends on the years of services. For 0-5 years of services, the employee would receives 1 annual leave day per month, with 30 days maximum. Then employees with 5-10 years of services will receive 1 and a half annual leave day per month, with 36 days maximum. Follow by employees with 10-20 years of services will receive 1 and a third annual leave day per month, with 39 days maximum. Lastly, employees with 20 or more years of services will receive 2 annual leave day per month, with 42 days maximum.

It is illegal to discriminate against any employee based on gender, race, religion, and national origin. Examples of employment discrimination are; denying certain employees benefits, and excluding potential employees during recruitment. When talking about anti-discrimination within the workplace, there are two main forms. The first form is disparate treatment discrimination, which occurs when an employer intentionally discriminates against an individual because they possess one of the protected characteristic. The other form is disparate impact discrimination, that occurs when an employer’s facially neutral policy or procedure unduly burdens employees from one of the protected classes of individuals.

In terms of recruitment, Nashville needs to hire new employees when they expand and enter the new market. In fact, they should recruit and select candidates who live in the new local market. This would be very beneficial because they are already accustomed with the local environment and cultural norms. As a result, they can understand and directly relate with the customers on a much higher level. They could also respond to their need more quickly and effectively.

Though there are several ways to recruit potential employees, website recruitment is one of the most popular methods. Out of the three top websites, LinkedIn is the most popular site for a recruiter to find well qualified job candidates. The website Indeed is also one of the top most effective website to combine the information from job boards, news sites and company listings. Lastly, the website Glassdoor has new job postings added every day, as well as provides the context to see if it’s right for specific candidates. 

The expenditure for posting job ad on resources depends completely on the specific website. For example, LinkedIn charges $495 for a month job posting, 20% discount for 5 job pack, and 40% saving for 10 job pack. They create these deals to get companies to post more than just one opening.

The first and most important factor when posting an advertisement, is to make sure the job title is clear and descriptive. This ensures the prospective employer can tell what kind of job it is right away. There are hundreds of postings on these websites, so if a company comes off confusing or hard to understand, the viewer will move on and not waste any time. Secondly, the advertisement has to provide specific requirements such as experience, knowledge, skills and qualifications clearly, including position details such as responsibility, salary, and location of workplace.This is important because then the company will not receive hundred of unqualified candidates, and the candidates do not waste their time applying to jobs they have no chance of getting.

For the compensation, there are 5 levels of structure which is cash wages, non-wage costs, Statutory welfare costs, voluntary social benefits, and retirement allowance. There are also two main forms of compensation; direct and indirect form. Direct forms include salary, hourly, commission, bonuses. Based on the location of Nashville that under Tennessee state, the minimum wage that employers have to pay their workers are $7.25 per hour. On the other hand, indirect forms include benefits and equity based program.

With minimum benefits that have to provided like Disability insurance, Family and Medical Leave, Paid Time off and Other, Leave Benefits, Social Security and Medicare Taxes, and Unemployment Insurance. In addition the employee stock options or a common stock of company are one of the indirect benefits too. This is the mostly offered to management with restrictions on the option in an attempt to align the holder's interest with those of the business shareholders. There are two types of employee stock options which is incentive stock options and non-qualified stock options. Furthermore, there are some other benefits that provided by agreement between an employer and an employee, most of these benefits are not required by law. For example, training program, company car or transportation, and accommodations.

Moving on to the topic of taxes that employee have to paid, the Tennessee income tax does not apply to salaries and wages, but most income from stocks, bonds and notes receivable is taxable at a flat rate of 6%. Then There are only a handful of wage compensation items that can be exempt from the Social Security and Medicare taxes like Medical insurance premiums (both employer-paid and employee-paid), Employer contributions to a retirement savings plan,, Contributions to a health savings account, and Long-term sick pay (after 6 months since the employee last worked).

Section II: Marketing (Part III)

Key Recommendations and Figures

• Promotion Channels:

• Utilizing varying forms of social media to target particular sectors
• Targeting key conferences and conventions to develop connections
• Message:
• Answering the question: What can Nashville provide your organization?
• Focusing on key statistics that would appeal to the target audience
• Promotional Materials:  
• Promoting the message through signage, brochures, and interactive social media and online content

2.1       Promotion Channels

Arguably the most crucial steps in developing a marketing process are the beginning steps: identifying the target market/audience. One can’t effectively market their product or business without properly identifying who the audience is and what exactly their needs are. We have identified Japan, China and India as the markets Nashville should seek to exploit. We also identified the manufacturing industry as the sector they should cater to, specifically the automotive industry (primarily for the Japanese market).

While the market and segments may be chosen, that’s not enough to formulate a complete marketing strategy. Who exactly will Nashville’s Chamber of Commerce need to connect with, within these countries and industry segments, in order to convert their efforts into results? To answer that question, one must assess who exactly makes investment and business relocation decisions. We concluded that business owners, investment firms and private investors are primarily responsible for these desired outcomes. Therefore, our target audience becomes private investors, investment firms and business owners in India, China and Japan, working in the manufacturing and/or automotive industry.

Now we must decide which promotional channels to utilize in order to reach this niche segmentation. Nashville’s Chamber of Commerce hopes to use channels that don’t require large sums of capital, such as television advertisements. With today’s technology and the globalization of the business world, there are several different channels that suffice this request.

Social media, direct mailing lists and e-mailing lists are often considered to be among the cheapest marketing channels an organization can utilize. While it would be difficult to harness the outstanding reach that social media outlets provide and guarantee that Nashville could reach their aforementioned target audience, it would be foolish to ignore the low risk, low cost and high rewards that these outlets provide. LinkedIn would be the ideal location to meet these investors and business owners.

Building a profile that regularly provides resources and content could help Nashville’s Chamber of Commerce reach their target market.  Similarly, Twitter could provide the same opportunities. While this outlet is congested with much more traffic and content, Twitter possesses unique promotional opportunities that could assist in reaching the desired audience.  Facebook is also one of the most widely recognized social media networks in the world, as seemingly everyone has a Facebook account. Social media is so important nowadays that it is nearly unavoidable.

Social media affects many different fields, one of which is business. If Nashville’s Chamber of Commerce can take advantage of such social media like Facebook, Nashville can create a special facebook fanpage account to open investment opportunities in the Nashville area of commerce. Through the utilization of social media pages like Facebook, we can join the community of investors and share the opportunity that we offer.

Some political obstacles become apparent when discussing social media. In China, one cannot use some or all of the features provided by Facebook, Twitter and Google for  promotional purposes, as some social media content is blocked based on their regulations. Considering that we will be choosing China as a regional segment to exploit, we must understand their political and societal situation. China utilizes a multi-purpose social media and messaging application called Wechat, which would be a better promotional channel to reach China. Using other, more traditional social media platforms will be optimal to reach India and Japan.  

Regarding the content, Nashville’s Chamber of Commerce can compile all of the benefits of opening businesses in the greater area, as well as compile testimonials from local businesses such as Nissan that provide insight into just how advantageous it can be to move operations or open a new plant and/or facility in the greater Nashville area. Once content accumulates, then social media advertising and networking can occur with more effectiveness.

While social media provides the potential “bang-for-your-buck” opportunities cost-efficient businesses dream of, it’s more realistic to reach these investors and business owners through direct mailing lists and emailing lists.  There are several different organizations Nashville’s Chamber of Commerce can use to achieve this goal. While most only offer mailing lists for consumers in the United States, other companies have the market research resources to reach an international audience, such as Exact Data, who can provide direct marketing services and specialize in postal, email and telephone solutions.  While there were some privacy issues within this industry, Exact Data seems to have avoided any form of legislation. Exact Data is a multinational organization and could help Nashville’s Chamber of Commerce in their direct mailing and emailing efforts.

And finally, there is a more direct and face-to-face option to reach the desired target audience. Like many industries, the automotive and manufacturing industries have conventions and conferences where networking, negotiations and dealings can occur. Three specific functions seemed optimal and appropriate for Nashville’s Chamber of Commerce to consider:

·       In Mumbai, India there is an annual “India Manufacturing Week.” This is typically help for three days in the month of February at the Bombay Exhibition Center.  

·       The Asian Manufacturing Conference and the Asian Manufacturing Awards are simultaneous events held annually in July.

·       The International Conference on Automobile and Vehicle Engineering held in annually in March in Tokyo, Japan.

Manufacturing is growing in each of these markets and becoming more competitive. Several companies could consider opening a plant in the United States, specifically Nashville, just as Nissan did. These events would be a great way to connect with business owners and investors who are interested in expanding their capacities as it relates to manufacturing plants.

2.2       Message

The use of social media and other marketing services such as Exact Data, which provide a number of ways for cost-beneficial advertising in an effective manner, are likely to be the best options in promoting why Nashville, Tennessee as an ideal location for foreign investors to operate in the manufacturing industry, specifically with automobiles. Through these advertisements, it will be important for the Nashville Chamber of Commerce to attract these investors from China, India, and Japan by displaying statistics, charts, graphs, and other formats that their countries possess a high demand for automobiles. Furthermore, the profit made on direct investment in manufacturing/production of vehicles will be very high, once operation has been up and running long enough to put cars in sales lots at the dealership.

Selling the point that they can count on long-lasting profits on the initial investment will be made through a persuasive explanation that in the economic powerhouse nations of Japan, India, and China, where technology thrives and is essential to success in the countries, the demand for cars is higher than it has ever been. In a developed country such as those three previously stated, having an automobile to get to and from work, or to pick up your kids from school, or to go visit your family in a not-so-near distance, is almost as vital to the everyday lifestyle as food, water, and shelter. Explaining that investing in automobile manufacturing is profitable in the sense that almost everyone needs a car in order to perform tasks within their lifestyle and culture will be vital to our overall message; that Nashville, Tennessee provides an ideal location for investors to develop an automobile manufacturing plant, due to the statistically skyrocketing numbers in production and profits within the southeastern region of the United States within the field.

As previously stated, the concise presentation of statistics to prove that the main message, and arguments behind it, will be necessary in sparking the interest of foreign investors. Through these messages and statistics, another way to bring business interest to the Nashville area will include promoting the ability to recruit job applicants in the nearby area (college students who are looking for jobs upon graduation), a strong collection of universities and colleges within or around Nashville, and an attractive place for employees of the company to live. This would include details regarding life around Nashville outside of the operating business, where families of employees would see Nashville as a formidable place to live their lives, with an appealing entertainment district, as well as a strong public school system (and number of private schools), and extensive options for housing, referring to the city’s residential district. For potential employees, this will be important, as they will be considering bringing their families into the area for a long period of time, and will be a factor of thought for an investor finding ways to fill jobs.

Being able to provide the manning to run a manufacturing plant will be able to provide the production for desirable returns in the eyes of an investor, therefore this would be critical to the argument as well, outside of the main message.

Key Statistics to Promote:

·       Over 32% increase in non-agricultural employment since 2010

·       Over 37% increase in manufacturing employment since 2010

·       A population of over 2 million throughout Nashville’s Economic Market

·       55% of Nashville’s population is under 40 years old

·       Over 60% of Nashville’s population over 25 years old has a professional, associate’s, bachelor’s or graduate degree

2.3       Promotional Materials

When considering the content of the promotional materials, it’s important for Nashville to first introduce itself and its Chamber of Commerce. This will help show the layout of the area, the characteristics of the society and culture of the city, and the opportunities for businesses in the present and the future.  Most importantly, however, we hope that the promotional materials will help show investors and business owners what Nashville can offer in terms of products, opportunities, businesses, etc. And finally, we would include ways they can contact the Nashville Chamber of Commerce for more information, presentations and hopefully future negotiations. (See Appendix A)