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Globalization Expansion and Strategy Decisions

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Globalization Expansion and Strategy Decisions

Main Scenario:
In this main scenario, you work for a mid-size US company that manufactures domestically and markets lighting products (i.e. different types of lamps: portable battery lamps, arc lamps, filament lamps etc). The company you work for has no international manufacturing or vendors and does not outsource. To your management team, make several strategy decisions (best alternatives) for your company in a report which details the compiling information gather in each of the three part scenarios below.

Your 3 scenario parts to investigate:

Part 1:
Your management team is considering investing in a foreign country and has requested a report regarding the attractiveness of alternative countries based on the potential return of FDI. Accordingly, the ranking of the top 25 countries in terms of FDI attractiveness is a crucial ingredient for your report. A colleague mentioned a potentially useful tool called the "FDI Confidence Index" which is updated periodically.
Using this index (and other information gathered), make a recommendation to the management team of 5 possible countries for your company to make an investment in and why.

Link for the FDI Confidence Index below in red:
http://www.atkearney.com/index.php/Publications/foreign-direct-investment-confidence-index.html

Link investment markets Article by AT Kearney:
http://www.businessweek.com/globalbiz/content/mar2010/gb2010035_430768.htm

Based on the FDI Confidence Index, I selected these five countries: China, India, Brazil, Indonesia and France although the last two countries I am not so sure are a good choice (these may be replaced for this response if necessary).

Part 2:
Management is using your recommendations and wants you to evaluate the specific countries for this direct investment. They have decided to pursue international expansion opportunities in one of your five recommended countries. To achieve economies of scale, management is aiming toward a strategy of minimum local adaptation.
Focusing on your five recommendations and using the Countries section of globalEDGE (select Countries on the main menu), prepare a summary that features those aspects of the product [you chose] where standardization will simply not work and adaptation to local conditions will be essential and why.

Using this information make a recommendation to your management team of which would be the best two countries to pursue and why.
Link for Countries section of globalEDGE:
http://globaledge.msu.edu/Global-Insights

Part 3:
Due to the current global economic crisis, your management team would also like you to investigate exporting options to your five recommended countries. Since this would be a new venture for your company, you will need to research resources that provide guidance for companies that wish to expand their markets through exporting. globalEDGE provides links to these under a category called "Trade Tutorials". Identify three such sources recommended by globalEDGE and provide a brief description of the services available for new exporters through each of these sources. Recommend one to your management team.

Three recommended by globalEDGE:
1. globalEDGE Export Tutorials (I would recommend this one to the management team).
2. globalEDGE Online Course Modules
3. globalEDGE: Glossary of International Business Terms
Links to globalEDGE Trade Tutorials:
http://globaledge.msu.edu/Global-Resources/Trade-Tutorials

Solution Preview

Globalization Expansion and Strategy Decisions:

The evolving global trends are propelling many companies to expand their target market and go international. This act requires a lot preparation for the company to ensure that they enter a market that will be suitable for their operations. The global expansion of an organization will boost the market share that is held by the organization to increase the profit margins of the corporation. Effective strategies have to be put in place to prepare the organization of what is to be expected (Kearney, 2011).

As the management of the organization is considering investing in a foreign country, there are diverse nations that hold a more attractive market conditions that are suitable to the functions of the company. To ascertain these nations that will be suitable for the company to invest in, the FDI attractiveness list will direct the corporation on the proper nation to invest in. Through this the global development and integration of the company into the appointed nations that they will invest in will give the corporation a competitive edge over the local firms. The company will also be able to gain access to physical resources that will propel the functions of the company. The corporation will hold the opportunity of attaining closeness to the major markets in the investment nation. This will increase the market share of the company. Based on the FDI confidence Index surveyed lately, the following are the five nations that are suitable to the operations of this mid-sized company; China, India, Brazil, Australia and South Korea.

Analysis of the Nations:

The nation of China has continued in its development trends in the expansion of the economic entities in their market. The European Union has a great economic outlook of China ...

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