Projects for this Course
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International Business Project

Project Due Date - The Sunday night of Week 10, our school week is Monday thru Sunday

So this is due the Sunday night before finals week

Objective
  • To become an internal "expert" in country of your choice.
  • To create a business oppotunity for an American business in a foreign country.
In order to investigate the business opportunities in a foreign country extensive research and analysis must be completed. Typically the factors to be considered are:
  1. Size of Market (demographics, socioeconomic state, urban/rural.
  2. Socio-cultural acceptance of product-adaptation necessary.
  3. Legal/bureaucratic environment (imports, local manufacturing, taxation).
  4. Competition of market.
  5. Economic and political climate for foreign business.
  6. Methods for marketing and distribution.
  7. Managerial and labor climate.
  8. Financial visibility (profit margin, currency translation, profit repatriation).

Project Report

During this quarter, you will study and learn forces that affect international trade. The report will essentially cover all forces. The outline identifies suggested topics of information to include in your report. It is understood that all of the information or data for the topics in the outline may not be easily accessible within the scope of reference material and time constraints available but give it your best effort. Your grade will reflect the quality and depth of your research and analysis. The Supplementary Readings at the end of each chapter list excellent periodicals, which may be useful resources for your project.

Project Outline
  1. COVER PAGE: Course number; date; your name; title including country.

  2. TABLE OF CONTENTS: including page number for each major topic or subject heading etc...

  3. PHYSICAL FORCES

  4. ECONOMIC & SOCIOECONOMIC FORCES

  5. SOCIOCULTURAL FORCES

  6. COMPETITIVE & DISTRIBUTIVE FORCES

  7. MARKETING & MANAGEMENT ASSESSMENT

      Maximum of 2 pages; overview of your findings, barriers and/or opportunities in conducting business in the country. This discussion should reflect all of the integration of the forces taken as a whole and should address the managerial implications as well as the business opportunities. Give examples.

  8. APPENDIX: charts, maps, tables, etc. DO NOT include copies of articles from periodicals etc.

  9. BIBLIOGRAPHY: Sources of reference material in standard bibliographic format.
The Forces that Affect International Trade
Physical Forces

The importance of geography is staggering, because so many of the other forces are affected by physical forces.

1. Location: It will be useful in placing the country in its proper place with respect to neighboring countries, relative size and topography. A map can be helpful.
2. Political Relationship: Any political changes along the country’s border; any opportunities or barriers to enter into trade agreements with neighboring countries.
3. Topography: The surface features of a country (or region within a country) contribute to the country’s economy, culture, politics, and social structure. Describe the topography i.e. mountains, deserts, plains, and bodies of water.
4. Climate: An important physical environment. It can set limits as to what people can do, and agreeable climates foster growth and development. I.e. topical versus temperature etc...
5. Natural Resources: Anything supplied by nature to which people depend is a natural resource. What natural resources are contained within the country if any?
6. Other Changing Physical Resources: Development of new roads helps transportation and building dam provides power and controls floods.
7. Implications for International Business: Based upon your research summarize barriers and opportunities for locating business opportunities. What should MNC managers be aware of?


Sociocultural Forces

Culture is the sum total of the beliefs, rules, techniques, instructions and artifacts that characterize human populations.

1. Cultural Aspects: Describe the cultural aspects in regard to art, drama, music, folklore, dance, and architecture.
2. Attitudes & Beliefs: Describe this toward work, family, self, and change.
3. Religion: What are the dominant religions and practices in the country or region within the country?
4. Material Culture: Refers to man-made objects. It reflects the degree of economic (material) development and the standard of living. For example, a rich country with high per capita GNP is likely to enjoy a high level of technology.
5. Education: What are the attitudes, literacy rate, educational system and achievements?
6. Communication: What is the dominant language or dialect spoken in the country? What are the characteristics and meaning of unspoken language i.e. expressions, gestures that the MNC managers should be aware of?
7. Business Protocol: Identify or give examples of the nature of business conduct or expectations.
8. Attitudes & Beliefs: Identify regarding social status, gender, race, minorities as they apply to jobs, promotions etc.
9. Implications for International Business: Based upon your research summarize barriers and opportunities for locating business opportunities. What should MNC managers be aware of?


Economic and Socioeconomic Forces

Of all the uncontrollable forces with which business people must contend, economic forces are the most essential. The concept of how scarce resources are allocated and consumed is of great importance to international managers. To be able to stay competitive, managers need to keep abreast of all changes particularly economic areas.

The analysis will provide economic data on both the firm’s actual and potential markets and at the same time keep tabs on the firm’s competitors wherever they are located.

1. Gross National Product (GNP) or Gross Domestic Product (GDP): Indicate the last 3-5 years history and rate of growth. Indicate the GNP/CAPITA or GDP/CAPITA.
2. Income: (Business International; Monthly Bulletin of Statistics; World Development Indicators published by the World Bank): What is the income distribution, disposable income, personal consumption distribution of income, and discretionary income?
3. Labor:
    What is the average hourly rate in U.S. Dollars?
    What is the Per Capita Income in your country?
    Describe the education level.
    Any known mobility of the population or work-force?
4. Population Demographics: Total population of the country, age distribution and birth rate, population per square mile.
5. Investment: Indicate the amount and type of investment in the country, i.e. land development, education, building (by the host country).
6. National Economic Plans: (Business International; Business America; Overseas American Chambers of Commerce; Plans prepared by a government which generally state their economic goals for periods up to five years. (Also, see MINICASE 7-2 PP 248 for an example.)
7. Inflation Patterns: Describe any over the last 3-5 years.
8. Balance of Payment History: Is it a deficit? If so what actions is the government doing or going to do to correct it?
9. Exchange Rates: What is the currency called in your country? What is the most recent value of the currency in U.S. Dollars? Chart the last 6 months history of the exchange rates converted to U.S. Dollars?
10. Implications for International Business: Based upon your research summarize barriers and opportunities for locating business opportunities. What should MNC mangers be aware of?


Competitive and Distributive Forces

World competition has intensified and there are five nations and groups of nations whose firms are in worldwide competition with each other; United States, Japan, EC, North American Trade Alliances (Mexico and Canada) and newly industrialized countries. Although nations do not compete with each other, their firms do, but most economic and social conditions as well as political actions affect the ability of all of a nation’s firms to compete, Channels of distribution are both controllable and uncontrollable variables. When selecting channels of distribution, management must consider the characteristics of the market, the product, the company, and the intermediaries available.

1. Identify any trade barriers that may exist in your country, i.e. restrictions on imports/exports.
  1. Tax (Ad Valorem, VAT)
  2. Wage Controls
  3. Price Controls
  4. Tariffs
  5. Quotas
  6. Product Liability
  7. Attitudes toward labor unions: Are labor unions in your country? Do workers abide by labor agreements and what can the employer do if they do not? Are strikes common (wildcat or advanced warning)?

2. Identify any typical government restrictions against foreign MNCs, i.e. Hit List, Keiretsu, Industrial Targeting.

3. Are there any counterfeit products that may impact competition?

4. Identify any strong industries (steel, computers, etc.) that will present challenges I other MNCs that desire to locate or compete in your country.

5. Identify a typical distribution network, (as a way of doing business in your country) i.e. layers of wholesalers, distributors, or agencies as it affects imports/exports.

6. Are there any other restrictions impacting competition or marketing i.e. antitrust laws, currency exchange controls, contract enforcements?

7. Implications for International Business: Based upon your research summarize barriers and opportunities for locating business opportunities. What should MNC managers be aware of?
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