Abstract
One fine evening of February 2018, while sitting on his rocking chair, the CEO of Bright Paint Industries (BPI) recalled the experience of exporting paints to Afghanistan and its financial returns. At the same time, he recalled the exhibitions of UAE in 2015 and 2016. Since 2016–2017, the top management was analyzing growing demands in local and foreign markets and very much concerned about implications of (1) rising competition from unorganized paint sector, (2) the customers’ trend towards using alternatives to paints like wallpapers, etc. and (3) ease of doing business in Pakistan due to persistent energy crises and other factors. Keeping in view the above-said issues and its existing presence in paint industry for the last four decades, the company is now considering two options: (1) expand its existing operations in Pakistan and cater the foreign markets by export from here or (2) set up a plant at some foreign location and fulfil orders from there.
Introduction
Established in 1973, Bright Paint Industries (BPI) started manufacturing Synthetic Enamel Paint in Lahore, Pakistan. During 1973–2000, the company mainly remained unorganized, even though it engaged in many experiments to enhance operations, like developing Pakistan’s first alkyd resin plant in 1989. In 2000, BPI enlisted itself as a private limited company in order to streamline the company’s operations, especially through R&D and marketing department. In 2005, as the first step towards internationalization, BPI became the pioneer local paint company that exported paints to Afghanistan.
For BPI growth through expansion was a significant business strategy. Size brings numerous benefits e.g. an ability to implement economies of scale in the purchase, transport, storage and production by spreading the company’s fixed cost base over a large output. Size also increases a firm’s risk-taking capacity and encourages experimentation that helps the company to create leverage and generate higher returns on its asset base. The CEO had known this fact since the beginning and so kept growth and expansion strategy as the priority in the BPI agenda. He was well aware that success does not come without hard work. Further, success in the global market requires vision and robust strategies. To be able to persistently penetrate into new areas and markets, companies need to be logical, agile and meticulous in their approach. Favourable circumstances are important for a company’s global success, but when it comes down to it, it is just about having a firm plan, committing to it and executing it well. Under this state of dilemma, he called his secretary and asked her to arrange an immediate meeting of the head of the departments of the company.
Background
The Paint Industry in Pakistan
The paint industry in Pakistan is producing a wide range of finished and intermediate products which include pigments, distempers, plastic emulsion, enamel, undercoat, primers, rubber paint, aircraft paint, marine paint, anticorrosive paint, anti-fouling paint, etc. The paint industry in Pakistan is experiencing an annual growth rate of around 6–8 per cent. During 2018, capacity attained was around 18 million litres paint (Economic Survey of Pakistan, 2018). This high growth is due to the ongoing growth in the construction and automotive industry.
Pakistan’s paint industry works in both organized and unorganized sectors. Represented by Pakistan Paint Manufacturers Association (PPMA), the organized paint sector of Pakistan consists of 20 producing units including four multinational companies namely AkzoNobel, Jotun, Kansai and Nippon. According to an estimate, 110 paint producing units are operating in the unorganized sector (Singh, 2018). Many of them are also not covered under the excise net in the same way as the organized sector and, therefore, are in a better position to compete in the local market. Although there are no formal figures of the paint and coatings industry value and volume in the country, most of the stakeholders put the Pakistani paints and coating industry worth PKR 37 billion (USD 306 million). The industry has been growing in the range of 4–7 per cent (on a value basis) for the past 5 years (Singh, 2018).
As discussed by an official of PPMA:
Manufacturers in the unorganized sector sell paints at highly discounted rates, although the quality is nowhere near those of good quality paints. Painting and repairing is an ongoing process so people opt for cheaper paints without considering the quality they are getting for the money they are paying. Sometimes unethical practices also pose a serious threat to healthy competitions.
He further explained:
The development in construction, manufacturing, transport and other sectors has increased the demand for paints in Pakistan. The paint industry still has a long way in its expansion efforts. Apparently, there is a lot of potential to flourish because the demand for paint is increasing day by day. Now the industry has to look for cheaper raw materials for future expansion and growth. It has now become the requirement of the paint industry to manufacture its raw materials within the country.
Regarding the paint industry of Pakistan, the Managing Director (MD) of BPI added:
Many multinational and local companies constitute to make the paint industry of Pakistan. This means there are many competitors to keep in consideration, such as Happilac, Master, Nippon Berger, Black Horse and the new entrant Kansai Paint Company of Japan, and the market leader ICI Dulux.
A report of Business Recorder in 2018 states that the total size of the Pakistani paint market is around PKR 30 billion (USD 197 million). Paints and varnish imports from China increased by 36 per cent in the financial year 2017. Decorative paints dominate the sector at about 60–75 per cent of the market (Berger Paints, 2018).
Profile of BPI
Set up in 1973 at Lahore, BPI has now become a corporate success. The period between 1973 and 2000 was mainly experimental. The company’s initial production was of synthetic enamel paint, the first one in Pakistan with production design being followed even after four decades. Another production plant was set up in 1981. The facility had noteworthy production techniques and creative yet progressive methods to manufacture products that were matchless in quality. These productions were seemed to be an industrial revolution in the paint industry. The company developed Pakistan’s first alkyd resin plant in 1989. In 2000, BPI was added to the list of a private limited company. The founder and the CEO of the company said:
The registration of the company was a step that proved beneficial in the long term. The company became more organized and the operations became easily manageable, especially through the development of the R&D department which worked tirelessly in targeting the exploration of new opportunities for the company.
The company’s ambitious nature helped pave its way towards the production of export-oriented products and further growth by the expansion of their plant capacities. In 2005, the company took a major step towards global expansion when it started export of its products to Afghanistan.
Relocation of a plant in 2005 on the outskirt of Lahore was a step to improve operational facilities keeping in view the international standards. The establishment of the new in-house resin plant to produce water- and oil-based paints helped the company to achieve numerous awards. The Plant was fully automated to cater to the growing demands of the markets. Today the company is ISO 9000:2006 certified. Always emphasizing on quality, BPI was the first paint company in Pakistan to attain International Quality Crown Award in Gold Category by Business Initiative Directions in London.
The CEO explained:
The company has the credit of being the first manufacturer of perfume oil-based paints in Pakistan, which was and is one of the company’s most valued products. We assure the customers that they will be provided with superior quality paint at competitive prices. This pricing strategy is the company’s differentiation factor. We also promise the deliverance of fine quality paints, assuring customers that our products are almost equal in quality to that of multinational players in Pakistan.
He further expressed:
In 2007 we established an in-house marketing division, in accordance with the vision to become a market leader. The division revolutionized the image, identity and market exposure of BPI.
The Paint Production Process
Raw Materials
The raw materials used in manufacturing paint consist of Titanium, Calcium carbonate, Kerosene oil, Additives, Bacteria killers, Stones, Flowing agents, Perfumes, Pigments, and Water. The pigment is used to provide colour, hiding, and control gloss. Pigments are divided into two categories. One is “Prime Pigments” which include Chrome Green Oxide, Titanium Dioxide (white), yellow and red iron oxides, etc. The second is “Extender Pigments” which include talc (magnesium silicate), calcite (calcium carbonate), mica, barytes (barium sulphate), etc.
Resin works as a binder to hold the pigment particles together as adhesion to the painted surface. Waterborne paints usually use acrylic polymers as binders. These come in a wide variety of combinations and types and are mainly based on monomers such as butyl methacrylate and methyl methacrylate. Conventionally, lower-cost paints have been formulated on PVA (Ploy Vinyl Acetate) binders.
Solvent-based resins come in a broad range of types. The most common solvent-based resins are known as ‘alkyd resins’ that are usually used in enamel paints. Urethane alkyds are commonly used in clear varnishes. Protective coating resins include types such as polysiloxane, epoxy, urethane and moisture-cured urethane. Solvent works as a carrier for the pigments and resin and it may be organic (such as Mineral Turps) or water. Additives are used to improve certain properties such as mould resistance, ease of brushing, drying, scuff resistance, and sag resistance.
The Procurement manager at BPI explained:
All the raw materials required by the company are sourced, which helps in the reduction of the cost incurred by the company. This leads to competitive pricing as the cost of producing them is much higher. Another reason for outsourcing is that we want to concentrate our efforts and energies on the production of finished goods. We have various suppliers locally and globally.
Manufacturing Flow
The generic manufacturing process involves five critical stages (Henderson, 2013).
Bead mills are used for large batches and can maintain semi-continuous output. Operation is similar to a ball mill but the vessel is smaller and balls are 3-mm diameter zirconium dioxide beads, and mixing is at a higher speed producing more rapid output. Bar mills are especially useful for highly viscous (thick) mill-bases. The mill-base is forced through a small clearance between a rotating water-cooled roller and a bar pushed against the roller.
The Production Manager at BPI commented:
BPI is following the same generic manufacturing flow process. The paint is generally manufactured in batch lots of 200 litres for special products and colors and 10,000 litres for mainline white products.
Meeting by CEO
Next week on 24 February 2018, the meeting with the department heads started at 9:30 am. The meeting lasted for 7 hours. The CEO chaired the meeting. His secretary tabled the meeting agenda that included discussion on various factors like the company’s overall performance, market positioning, growth strategy, innovation and benchmarking and finally prospects of internationalization.
He started with the importance of internationalization:
For BPI, promoting products globally was always part of the plan. Although we are profitable and successful domestically, the Pakistani market alone isn’t big enough to support large scale opportunities. In order to maximize revenues, we need to think internationally and manufacture products from a global perspective. If the concentration is mainly on the local market then the goods produced will cater only to the local customers, leaving no space or opportunities to mark our performance outside the country. Moreover, expanding abroad is an intelligent step keeping in view the pace of change in the taste and trends of Pakistani consumers. Local customers show less loyalty to the brands and keep switching amongst them. Targeting the market abroad diversifies the customer base and reduces dependence and risk levels.
Later, the CEO presented two options for internationalization. He said that either the company can expand its existing operations in Pakistan and cater to the foreign markets by exporting from here (Option-I) or the company can set up a plant at some foreign location and cater the demands from there (Option-II).
The CEO opened the floor for discussion and asked for valuable contributions by departmental heads. All the members of the meeting enthusiastically expressed their views. Summary of the meeting is as follows:
The MD elaborated the market trend:
The latest trend is that consumers demand more styles and types in the paint. Thus the change in consumer demand requires paint industries to be more creative. The paint industry is now indirectly being hit by new trends such as the use of wallpapers, fabrics, and paneling. Wallpapers have the effect that paint cannot have; not only because of their color and finish but also because of the visual impact of their design (Museum, 2010). Its usage today is highly appreciated.
Explaining the company’s focus on innovation, he continued:
Adhering to the company’s vision and keeping in mind the threats that the current market trends pose, BPI acquired a competitive edge by having “All Color Machine” that can match paint colors with things of any color including floors, curtains, clothes, etc. and also provides ‘recipes’ of creating that particular color. This innovation gives an opportunity for the customers to customize paints according to their choice. It takes merely a second to detect any color and create a paint color exactly like that. Only BPI has the privilege of owning this machine.
He further added:
A new product line of Sterling silver and gold water-based metallic paint was launched in 2014 in order to offer variety to the customers and to bring a new change in the paint industry. This is one of a type of paint and as a result of its production, BPI now has an edge over its competitors in Pakistan. Antique Polish paint is another type of paint that is being developed as a unique concept, which gives a marble effect. It is an invention which does not exist in the market and BPI will be the first company to introduce it in Pakistan.
Regarding benchmarking, he expressed his viewpoint:
BPI has set ICI Dulux as its benchmark for all comparisons and evaluation of work. Our main target is to take over its market share and to lead the market through consistent hard work and improvements and innovations in the operations
Overall the MD was happy with the pace of the company’s progress (Table 1) but worried about foreign investment:
Many parties are interested in working with us; the only reason for hesitation on their part is the current situation of Pakistan. We could not enter into any JV agreement with the foreign companies because the companies were afraid that their investment would be wasted. The economic situation and persistent energy crises in Pakistan is the barrier to that.
BPI Indicators (2000–2018)
Production manager presented his views:
In 2005 BPI began its exports to Afghanistan and marked itself as the pioneer company to begin exporting paints abroad since the creation of Pakistan. Ever since its establishment, BPI was able to find the export work due to overseas contacts, but I feel it has been long that our exports have been only restricted to Afghanistan. As the company is now aiming to grow further we should keep in mind that it is important to improve our production capacity and efficiency in order to cater to a larger customer base.
In order to achieve this goal, the production manager expressed that the company has to take a few important steps. In order to meet the superior quality demand of foreign customers, quality control checks must be added at various stages of production and a revised, more efficient production schedule should be formulated. He was of the view:
Currently the quality of the finished goods is checked at the end of production only. We should implement the revised production schedule that has quality control checks at two strategic stages. The generic process begins with suppliers, both national and international, that send in the inventory of the raw materials to the company’s production facility. The process from placing an order to the delivery of raw materials takes place between 1 to 2 months. Under the revised plan, a random sample from the received materials shall be extracted and taken to the QC lab where it shall be tested according to the set standards. If the samples pass the test, the raw materials shall be transferred to the warehouse for further use. If not, then it shall be returned back to the suppliers. Once the paint has been made, another random sample shall be drawn from the produced batch and shall be checked and testified in the QC Lab. If the paint does not come up to the standards, it shall be sent back to the production plant where it will either be rectified or reused in small quantities in the upcoming batches.
The head of the Market research department appreciated the company’s efforts in terms of bringing innovation during the past years and emphasized the need to improve continuously in the future, whatever is the target market, foreign or local. He elaborated:
It’s not that easy to expand, we need to ensure that we keep our customers extremely satisfied and content. We need to produce superior quality products that satisfy customers all over the world and ensure that we deliver on time. I recall that our 2015 and 2016’s exhibitions held in the UAE were a great success. We got an overwhelming response not only from the UAE market but adjacent countries from all around the Middle East. Therefore, I suggest that if we expand internationally, we should set up a plant in the UAE. UAE seems to be a business hub with great potential.
He also shared his experience of the UAE visit in January 2018 to attend an Expo:
UAE is primarily influenced by infrastructure development in the region and is estimated to grow at 5.7% from 2019 to 2024 according to relevant industry sources. At present, the paint market in the UAE is worth more than AED 150 million (USD 40.84 million). The demand for various types of paints including marine coating decorative paints, powder coating, and protective coating are on the rise year on year. The UAE’s optimistic construction industry has motivated the expansion of several sectors including glass, cement, paint, ceramics and steel industries.
He also referred his discussion in Expo with a senior official from the paint industry who told:
The growth of the paint industry in the UAE is attributed to important factors; one is the fast completion of various construction projects. Second is the inflow of international architects in the region. The types of products they specify are encouraging the paint industry to produce superior quality competitive products. Moreover, UAE is becoming a lifestyle destination for tourists and its residents are having a huge and positive impact on paint consumption.
He also presented a report “Starting a Business in the Emirate of Ras Al Khaimah (RAK), UAE 2017” according to which UAE market has great potential; where tourists and investors are dominant. UAE enjoys a strategic location on the new Southern Silk Road among Africa, Europe, and Asia. It provides the best possible trading conditions and means. UAE is balanced to take advantage of economic activity among the world’s fastest-growing and developing economies as part of the global competition. Thousands of businesses use the UAE as a hub for trade with Africa, Saudi Arabia, and other Middle Eastern countries. UAE is a unique trans-continental trade hub and a nexus for innovation in the fields of technology, culture, and wider knowledge economy. UAE’s optimistic construction industry has motivated the expansion of several sectors including glass, cement, paint, ceramics and steel industries. With such favourable infrastructure and especially access to other countries through the water route, exports will be much easier and cheaper.
He further explained that there are few international paint brands in UAE; each of which has a local manufacturing presence for decorative and protective coating paints. However, there are several other local manufacturing companies making out a niche for them in the market. These companies are mainly focussing on the decorative segment. Almost all of them have production plants and facilities located in the UAE and other Gulf countries. Collective yearly installed capacity of paints in UAE is approximately 500 million litres. The paint industry in the UAE has witnessed excess production capacity due to lower demand (about 5%) as compared to previous years because of the downturn in the real estate and construction sector. In addition, the local manufacturing companies and the producers are exploring more opportunities in other regional countries for business sustainability and lucrative profits. The total market size of paints and coating in GCC (Gulf Cooperation Council, political and economic alliance of six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman) in 2012 was estimated at USD 2.26 billion and is expected to grow at Compounded Annual Growth Rate of 5.8 per cent until 2017 (Starting a business in RAK, 2017).
He put his focus on in-depth analysis of different strategic territories especially United Arab Emirates (UAE) and called for a proper proposal of expansion location and other details so that he could analyze the market, study consumer behaviour and guide on further innovations and expansion procedures. He described the current supply chain process of the company (Figure 1) and emphasized the idea of having more efficient supply chain management to cater to all stakeholders. He talked about the existing system and proposed possible changes that can be made in the future depending upon the decision of the expansion alternative.
The GM business development knows the Pakistani market inside-out. He was aware of what prospects are, what paths to choose for further growth, threats for the paint industry and the overall strategic position of the company compared to competitors. He proudly claimed that in the past years, the company had been very active in identifying and exploiting opportunities that arise:
Whatever final decision we take, whether an expansion of existing operations in Pakistan or expansion into markets abroad, the company’s chosen strategy can be successfully implemented only when we execute an action plan based on our strengths and weaknesses. We should try to overcome the weakness of sustainable growth. Experienced and committed staff, prime location of the factory plant along with the most efficient plants and equipment shall be the most important decisions. Our greatest strength that gives us an edge over our competitors is the use of a water purification plant which is rarely used by any other paint manufactures in the industry.
The GM emphasized all the strengths and weaknesses of the company which has been very helpful to formulate the strengths, weaknesses, opportunities, and threats (SWOT) analysis. He also brought to light the point raised by the MD about the customers’ trend towards using wallpapers, fabric and PVC panelling as an alternative to paints:
Wallpapers are considered expensive. This trend of using wallpapers etc for wall decorations is mostly dominant amongst the wealthy, fashionable classes. This is the reason that in spite of being so popular, wallpapers are still occupying a small chunk of the massive market. It does not seem that these can overpower the paint market. Paint is repairable and can easily be changed if required but wallpaper is more expensive to repair and change. I am of the view that people would continue using paint as their first priority due to durability. The trend of paint alternatives is temporary and it will soon fade away.
The HR Manager shared his views:
Expansion no doubt is the current requirement of the time but as my colleagues suggested we need to be clear on certain aspects so that I can also plan the employment requirements. We can plan properly on the staffing quality and quantity so that we would be able to recruit skilled people when new posts open. Also, if the company operates from the existing location then probably not much recruitment would be required as already, we have 300 employees. However, over time more employees can be added as per requirement. If the final decision is to locate elsewhere then a proper external recruitment plan will have to be developed. For internal recruitment, an appropriate selection will be needed to meet the labor criteria abroad. Moreover, change is always disliked by the employees so in order to keep their motivation level high, there has to be ample provision of some monetary and non-monetary benefits and this can be costly.
He further added:
Moreover, labour related issues would also be less intense in Option-I as suitable labour can be employed as and when required depending upon the volume of orders. The cost of recruiting labour in this option would be approximately 20% less than that of Option-II as there would be no requirement of fluency of communication in English etc. Under this option, the only pre-requisite is that the labour should know how to operate the machine.
The Admin Manager said:
In my opinion, we should expand existing operations in Pakistan. BPI has been operating in this market since 1973 so is fully aware of the dynamics in vogue. We are aware of the trends and elasticity so would be in a better position to forecast that would be adjustable to economic volatility. A business is always vulnerable to its external environmental threats as it has limited rather no control over them. In such a situation a better understanding and valuable experience of the market can be of great advantage to the company. Moreover, no major changes would be required in the corporate culture, working style and organizational structure of the company. It implies that Option-I would be relatively easier for the company to implement.
Finally, the CEO invited the Finance Manager to express his thoughts. The viewpoint of the finance manager was given the most attention as all departmental implementations were based on budgets and the availability of finance. He also highlighted the need to perform an initial appraisal on the feasibility of both options. He explained:
We have to prepare the budgets and forecasts after incorporating all relevant costs such as cost of project investment, construction, additional labor, additional equipment and machinery, R&D, training, transportation, etc. Moreover, analysis of all the costs shall also be required after considering possible expected benefits from economies of scale. We should keep in mind the foreign exchange rates of countries to export in. A proper conclusion could only be reached when the financial feasibility of both the options became known.
Regarding capital structure and financing, the finance manager further elaborated:
We have a history of interest-free financing; we have never taken a loan and would never do so in order to follow the legacy of CEO’s Family. For expanding our existing operation and exporting from the current setup we do have enough retained earnings and finances to rely on. Option-I has its own advantages like the management is already aware of the rules and regulations regarding legal affairs, direct and indirect taxes, audits, environmental issues, waste disposal, etc. However, for a new factory set up abroad, we do need some more additional finance. The question is how do we raise it? What would be the costs associated with financing decision? Can we afford it? A well-coordinated integration with the finance department would be required for the fulfillment of plans.
The finance manager continued:
The budgeted outlay in terms of investment would be around PKR 300 million (USD 1.9 Million) but may not be the requirement once the project gets going and might be the requirement in phases at different times. Thus, the company would not be hard-pressed to raise such a large amount all at once.
The Finance Manager wanted some time to work on it so that proper forecasted statements, feasibility reports and budgets could be formulated.
The meeting was concluded by the CEO of the company:
Both options need to be looked into thoroughly prior to implementation. The perspective of foreign investors is virtually difficult to change the economy of our country. This is nevertheless a great challenge that comes our way. The confidence of the investors is needed to be showed up especially making them feel that their investments will be in safe hands. The investors may be conveyed about the relationships that existed with Afghanistan since 2005 which under all circumstance would inspire investors to have faith in the company. The investors need to be invited for a visit to the production facility and an analysis needs to be carried out. But this would add costs as mentioned by Finance Manager. Effective distribution channels need to be explored for export to foreign countries. In order to increase the operational efficiency, we should cut down costs by buying raw materials in bulk or to produce it locally. BPI’s next target can be UAE. It seems an attractive option. It is now upon my department heads to formulate report and proposals to reach a final decision. Next meeting will be held after 3 weeks in which it would be finalized that whether we are exporting from Pakistan or setting up a new plant in UAE
The CEO delegated the responsibility of the decision-making to his grandson and company’s MD and made him responsible to co-ordinate with all the heads of the departments for further analyses and decision in the next meeting.
Conclusion
The case presents the dilemma of expansion and entry into a foreign market. The entry into a foreign market can be in equity mode, i.e. through export and contractual agreements or non-equity modes, i.e. joint ventures and wholly-owned subsidiaries (Peng, 2008). There are a variety of options to enter a foreign market such as through export, licencing, franchising, joint venture, fully owned and partially owned subsidiary. These modes of entry have associated costs, risks and degree of control that can be exercised by the firm which need to be considered in order to take this strategic decision. Exports directly to the customer or through an intermediary are easy to implement and involves less investment abroad. If manufactured in one centralized location in the home country, it can serve the national and international demand and offer economies of scale. However, it is susceptible to trade barriers and exchange rate fluctuations, logistic difficulties and transport cost which may reduce the economic benefits. Licencing, i.e. granting the right to intangible property, technology and brand name to another entity is another low-risk entry mode with little additional capital or time investment. Disadvantages include a negative effect on the brand image due to inconsistent product quality, the firm may not have tight control over manufacturing and may not be able to exploit the assets in the foreign market and may not avail the advantages of the experience and location economies. Franchising is another form of licencing insists that the franchisee abide by strict rules of the franchisor and involves limited financial commitment with comparative longer time commitment than licencing and low cost of operation in new markets. Franchising also faces the risk of loss of reputation if adequate quality control is not exercised in addition to no location economies and experience curve.
There are various types of a strategic alliance that a firm can have such as joint ventures, partially or wholly-owned subsidiaries. The strategic alliance partners share the risk of achieving a common objective. The alliance may be formed for rapid expansion into a new market, reduced marketing costs, access to new technology, or more efficient production. In a joint venture, the firm is owned by two or more independent firms and offer the benefit of lower investment and access to the expertise of the local partner in terms of marketing, production, procurement, and knowledge about the legal, political and cultural environment. At the same time, it involves the risk of sharing control of the technological know-how with the local partner. The partial or wholly-owned subsidiary in a foreign country offers the benefit of not losing the technological competence and having control over operations. It is also the most costly method with higher commitment and risk.
BPI has experienced a tremendous growth since its establishment in 1973. In 2018, the senior management team deliberated on the two options: (1) expand its existing operations in Pakistan and cater to the foreign markets by export from here or (2) set up a plant at some foreign location and fulfil orders from there to formulate an expansion strategy. The target market identified for international expansion is UAE owing to growth in its construction industry.
It is important to understand the positioning of a company before its expansion in the international or domestic market. While foreign investors are interested in the company, they also feel that this investment may be a waste. How does this affect the company’s expansion and how can the expectation of the foreign investors be met? A structured critical analysis of the apprehensions and convictions that the departmental heads have about the expansion and the forecast should bring clarity (refer Tables 2 and 3). What known opportunities and challenges could be faced by the company if it starts its operations in the UAE and what should the company do to overcome the challenges in that environment? Which other entry options should they have evaluated? By selecting only two options what the firm might have missed out?
UAE Sales Forecast
Comparison of Option I (indigenous expansion) and Option II (overseas expansion)
Footnotes
Acknowledgements
The author is thankful to
Management of Bright Paint Industries for its kind support and permission to use company information for the case study. Ms. Abeera Suleman, Ms. Tania Irfan, Ms. Zoraq Mansoor, Ms. Hadia Sohail, Ms. Kiran Zahra and Ms. Madiha Chughtai for their kind efforts to conduct interviews and collect/compile necessary data and information for the case study.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.