S.P.

Jain Institute of Management and Research

GLOBAL STRATEGY (PGPM 912) Fall 2013

Group Assignment
This assignment is designed to give you hands-on experience in exploring international growth opportunities for a small or medium-sized enterprise (SME). It will also help enhance your research, analytical, team-working, and report-writing skills, in addition to providing you considerable knowledge of sources of information relating to international business and strategy. The assignment has three distinct components: (1) Select an SME you know about, which is (may be) considering entering a foreign market as part of its growth strategy. The company may already be in some foreign markets, or exporting to them, but now they are considering making FDI in a new foreign market which offers the best potential and the lowest risk for their business. Explain your reasons for choosing this company. (2) Select two countries (preferably from two different world regions) which seem to offer the greatest potential for the companys business there. Explain briefly your reasons for selecting these two countries. (3) Then, using country selection criteria, such as those listed below, select one of these two countries to recommend to the SME for their international expansion. In this phase of the assignment, you will be preparing a business case for the company to enter a particular country. (You will be analyzing both countries to select the one that offers the best growth opportunities for the SME). Deliverable: Each group will submit a final report containing their analyses and recommendations to me on or before Saturday, November 2 by 6:00 p.m. Report-writing guidelines and a list of information sources will be provided. Country Selection Criteria In order for a company to select countries (or a country) to do business in, they will want to consider some or all of the following factors. Market factors: Size, growth rate, industry structure - Exports; imports Competition: Domestic vs. international - Type of rivalry; expected retaliation Political and economic factors - Government democracy vs. totalitarianism - Economy market vs. command vs. mixed

2013 Vinod K. Jain

Social and cultural factors Laws, regulations, and enforcement of laws Institutions and infrastructure Risk Plus any other factors that may be appropriate for the industry you select, such as weather conditions for a theme park company considering foreign market entry.

You may use any one of the foreign market selection frameworks (PEST, CAGE, or PRISM) discussed in class, or develop your own framework so long as it covers most of the critical factors in foreign-market selection. Preparing a Business Case As indicated above, the assignment involves the preparation of a business case for the SME to enter a specific foreign market. A business case provides justification for a business project, in this case justification for entering a specific foreign market. Typically, a business case compares the costs and benefits of doing something. However, given time constraints, you will focus only on identifying a foreign market for the SME and presenting your rationale for making this recommendation. This will involve comparing the two countries you select along country-selection criteria. Sources of Information The most comprehensive single source of information for international business is the GlobalEdge Website of the Michigan State University CIBER (http://globaledge.msu.edu). Please explore the site for information and links such as those listed below. I will provide an additional set of information sources for your possible use. World Population Data Sheet (including population growth rates) Country Indexes FDI Confidence Index (a ranking of countries in terms of their attractiveness for inward FDI) Corruption Perceptions Index (Transparency International) Global Competitiveness Index (World Economic Forum) Doing Business (World Bank) World Governance Indicators (World Bank)

Country Reports Country Fact Sheets (e.g., FDI environment and regulations) Country Commercial Guides (U.S. Commercial Service, U.S. Department of Commerce)

2013 Vinod K. Jain

Freedom in the World Survey (state of political rights and civil liberties around the world) Center for Intercultural Learning (cultural characteristics for different countries) Business Etiquette Around the World Country Reports on Human Rights and Practices (state of democracy and human rights) National Trade Estimate Report on Foreign Trade Barriers (countries import policies relating to trade and non-trade barriers) Global Financial Stability Report (IMF, International Capital Markets Division)

Market Potential Indicators for some 25 Emerging Markets (if the country you select is an emerging market, you can find information on a variety of market potential indicators relating to those markets) International Trade Statistics (World Trade Organization) Chartbook on International Labor Comparisons (hourly wages of manufacturing workers in different countries; Bureau of International Labor Affairs, U.S. Department of Labor) World Investment Report (UNCTAD comprehensive FDI statistics for different countries) Spot and forward exchange rates; Big Mac Index of purchasing power parity Worldwide Tax (corporate and individual taxation rates in different countries; VAT rates)

The GlobalEdge site also has links to a variety of other information of potential use in IB, including: Articles (News and Views; In-Depth Look) Country Comparison Tool Links to Tutorials on international business (IB) topics Glossary of International Business Terms Top 100 Global Brands

Note: Please use the report-writing guidelines (to be provided).

Vinod K. Jain October 20, 2013

2013 Vinod K. Jain