INTERNATIONAL BUSINESS MANAGEMENT ASSIGNMENT- II

You are the Marketing Executive of a company doing handicrafts business under the name
'South Asia Bags and Handicrafts'. The company has its own manufacturing facilities for
producing Ladies Fashion Bags. The company is exploring the possibilities of entering the
international markets. The management has asked you to prepare a preliminary report
covering the following:

(a) Advantages and Challenges for the company in entering the international markets.
(b) Different modes of entering international markets and potential difficulties involved in
each option as well as Physical Distribution implications.

Prepare your report covering the above aspects, for a specific geographic region like
USA/Europe.
1. The Chosen Company
Introduce the chosen company, its IB history and its current operations. What, in
your analysis, is the importance of IB to your chosen company and what is the IB strategy &
structure it seems to be following.

a. Brief History of IB Operations

i. When commenced
ii. Chronological history of markets entered, and with which products
iii. Modes of entry chosen
iv. Organizational structure for IB operations
v. Current size of IB operations & percentage of overall turnover
vi. Markets they are now intending to enter (any pre‐announcements)
b. Analysis of IB Strategy
Any IB theory

2. The Chosen Countries: Some Salient Facts (For Each Country)

You can consider this section as a structured data gathering exercise. There are specific
tools1 that you have been asked to use to get the necessary data. Use the tools, gather and
tabulate the data, and you’re done. The output of this section becomes the input for the
market entry analysis exercise. This data need not be in the main report, it can be as a
compact appendix where you present the following data in a set of comparative tables, for
example.

a. Economic Facts (Last Two Years/ Two latest years where data is available)
i. Macroeconomic Factors
1. GDP, Per Capita Income, Growth Rates
2. Inflation
3. Interest Rates
ii. BOP Details
1. Trade Balance
2. Current Account Balance
3. Capital Account Balance
4. BOP Balance
5. Official Reserves
iii. Exchange Rates
1. Currency
2. Exchange Rate Regime
3. Exchange Rate Movements
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 4. Forward rates or currency futures
iv. Foreign Trade
1. Figures for Imports/ Exports
2. Major Items Imported/ Exported
3. Major Trading Partners
4. Highlights of Trade Policy
v. FDI
1. FDIs Inflows/ Outflows for the past 2 years
2. Major Sectors where FDI is involved
3. Principal source & destination countries for FDI
4. Highlights of FDI policy
vi. Trade Agreements
1. WTO membership
2. Major Regional Trading Agreements
vii. Globalization
1. Degree of Globalization
(The tools that you have been asked to use are in the sources of information
appendix)

b. Political/ Legal System

i. System of Governance
ii. Current Head of State
iii. Political Stability in the past two years
iv. Legal system in operation
v. IPR regime
vi. Degree of protection afforded to foreign investors
vii. Ease of doing business in the country (Highlights)
c. Cultural Highlights
i. Language
1. Official language for doing business
2. Ethnic composition & major languages spoken
ii. Major Religions
1. Different religions being practiced
2. Importance of religion in daily life
3. Intersection of religion & state
iii. Holidays & Festivals
1. Official rest days for the week
2. Important festivals (from the business perspective)
a. Peak business seasons
b. Non‐working holiday season
iv. Business Culture
1. Hofstede’s Dimensions
2. Time orientation
3. Any major injunctions

3. The Entry Choice Analysis (Choosing between the 2 countries)

This is the first of the three main analytic exercises in the project. Given the data you have
gathered, and knowing about your chosen company’s strategic intent – which country would
you recommend, and why – the formal Market Entry analysis involving market
attractiveness, the CAGE model, & country risks.
a. Market Attractiveness
i. Market Size
ii. Market Growth
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 iii. Access to other markets
iv. Competitive Strength
1. Strength of competitors in product market
a. Domestic
b. Foreign
2. Firms competitive strengths in the chosen market
a. Technology
b. Finances
c. Marketing
v. Any other factors
b. Salient Costs & Distances(CAGE)
i. Cultural
1. Cultural Distance
2. Country of Origin Issues
3. Product specific cultural issues
ii. Administrative
1. Specific Trade Barriers (Industry Specific Tariff)
2. FDI Barriers
3. Ease of Doing Business
iii. Geographic
1. Impact of Geographic Distance
2. Climate Issues
3. Time Zones
iv. Economic
1. Relative Economic Growth
c. Country Risk Assessment
i. Political
1. Consumer attitude
2. Government attitude
3. Bureaucracy & corruption
4. Political stability
5. Religious stability
6. Wars
7. Resistance to globalization
ii. Economic
1. Growth rates
2. Macroeconomic policies
3. Inflation
4. Budget & BOP Deficits
iii. Financial
1. Exchange Rate stability
2. Exchange Rate controls
3. Foreign debt service as % of exports of goods & services
4. Official reserves as months of import cover
d. Other Strategic Considerations for Firm

(The final outcome from this exercise would be the one country you chose as best
suited as your company’s next international market.)

4. The Entry Mode

The second of the strategic choices – how should your company enter the chosen country
and why have you made that choice. Try to be as specific as possible here (including

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providing names and details of the firms you think they should be considering for
acquisition/ partnering with)
a. Chosen Mode of Entry, Justification and Details
b. Details on Chosen Partners
i. Who they are
ii. Why have you chosen them

Appendix: Sources of Information

a.Daniels John D, Lee Radebough, & Daniel P Sullivan (2007), International Business:
Environment & Operations, 11th Edition, Pearson Education

b. Country
1. Macroeconomy (World Bank Development Indicators)
http://go.worldbank.org/6HAYAHG8H0
2. BOP (Government websites – Central Banks)
3. Exchange Rates
www.x‐rates.com
4. Trade (UNCTAD Trade Map)
http://www.intracen.org/marketanalysis/Default.aspx ‐‐> Trade Map
5. Trade Policy (UNCTAD Market Access Map)
http://www.intracen.org/marketanalysis/Default.aspx ‐‐> Market Access Map
6. FDI (UNCTAD Investment Map)
http://www.intracen.org/marketanalysis/Default.aspx ‐‐> Investment Map
7. Regional Trading Agreements
http://www.wto.org/english/tratop_e/region_e/region_e.htm ‐‐> RTA database
http://www.bilaterals.org/
8. Globalization (Globalization Indices)
http://en.wikipedia.org/wiki/Globalization_Index_%28A.T._Kearney%29
http://globalization.kof.ethz.ch/
9. Detailed Country Profiles (CIA World Factbook)
https://www.cia.gov/library/publications/the‐world‐factbook/
10. Quick Facts (BBC Country Profiles)
http://news.bbc.co.uk/2/hi/country_profiles/default.stm
11. Quick facts & Links (Globaledge Country Profiles)
http://globaledge.msu.edu/countries/
12. World Bank Ease of Doing Business Site
http://www.doingbusiness.org/EconomyRankings/
13. Culture (Sites on Business Culture)
http://www.kwintessential.co.uk/culture‐vulture.php,
www.executiveplanet.com
14. Country Risk
http://www.prsgroup.com/ICRG_Methodology.aspx