Subcontinental Telecommunication Solutions
I. Problem Identification
In order to develop its software division and fulfill its agreement with a new customer (International Corporate Communications – ICC), World Wide Telecommunications (WWT) set up a joint venture with an Indian company, Subcontinental Solutions Pvt. Ltd. (SSS). The joint venture was named Subcontinental Telecommunications Solutions Pvt. Ltd. (JV) and since it was incorporated, there have been numerous obstacles such as: difficulty in punctually obtaining equipment necessary to run the business, not being on schedule with business activities, intellectual property theft, erroneous budgeting that necessitated a revised budget, sexual harassment, and lack of synergy – both cultural and in leadership for the two companies. All these symptoms point to a preeminent problem, the failure of risk management.
II. Situation Analysis
Markets have two different perspectives – business and economic. The best framework to evaluate the situation from a business perspective is a SWOT analysis. From an internal viewpoint, there are a number of strengths associated with a joint venture, among them being low labour costs and common language. Although the labour costs in India are low, the quality of applications and software is comparable to the United States which is a significant strength. Common language refers to the fact that business in India is conducted in English and this makes a symbiotic JV relationship plausible. In addition, SSS has experience in writing telecommunications software and has a small distribution network for the telecommunication market. Ease of access to a distribution channel in India will save WWT both time and money. Another advantage is great demand from the Indian software market – a huge potential market. With little competition, the JV can largely profit and become dominant in the market. Furthermore, The International Corporate Communication (ICC), has had a positive reaction toward the software developed. However, the JV also has a number of weaknesses, one of them being difficulty in managing Indian programmers – or culturally different styles of management. This creates an environment rife with insubordination, such as an employee reneging on their contract and stealing software code. In addition, lack of synergy culturally and in the leadership or upper management of both companies is a major weakness that causes communication breakdown. The JV has a compelling opportunity: the ability to learn about the Indian business environment and telecommunications market first hand. This will give the JV a competitive advantage over other US companies that will try to penetrate the market in India at a later date. Another opportunity is comprehensible and clear legal systems and government approval and support. Comprehensible legal systems appertains to India’s law being based on British common law which WWT can adhere to.