Global Business Assignment 2

Assessment 2: Report This assessment is for these students only: Distance Education; Gold Coast; New Zealand – MIT; Papua New Guinea; SCU Melbourne; SCU Sydney; Singapore – MDIS.

Your company (an Australian retail chain) is considering one of the BRIC nations (Brazil, Russia, India, China) nations to expand its business and enter the global marketplace for the first time. As an International Operations Manager, prepare a report 3000 words) for the company's executive summarising the risks and opportunities in each of the BRIC nations and recommend the best destination. Suggest an entry mode and marketing strategy for the chosen country.

 You are expected to demonstrate your understanding of the following: 

• How to assess country potential through an analysis of risks and opportunities.
• How to identify the best market entry strategy based on the business type and host country business environment (this includes the level of economic integration between home and host country, the political and legal environment of the host country).
• What strategies (with justification) to adopt in regards to marketing in the host country. This paper will be written in the form of a report (research). 

When completing this assignment you are required to access and use materials beyond your text and readings. As a guide you should include 10 references from refereed journals. Please place the word count for this assignment on the cover sheet. 10% more or less then the stated word count is acceptable. Executive summary, table of contents, tables, references and appendices will not be included in the word count. The marker may, at their discretion, discontinue marking at the word count.

Introduction

The various determinants of foreign direct investment (FDI) are economic, institutional and political factors. These include accountability, corruption control, economic stability, government, laws, market size, natural resources, politics, and trade orientation. Emerging economies like the BRIC (Brazil, Russia, India, and China) countries are the major recipients of FDI. These economies pose huge advantages from large markets to low labor costs. For investors, BRIC is a major destination for profit and cost reduction opportunities. This report analyses the opportunities and risks of doing business in BRIC countries and which country would be suitable for overseas market expansion.

Selection Criteria

The key criteria considered while selecting a country for overseas expansion strategy are,

1. Economic climate – Market size and growth
2. Government – Political stability, regulations and trade barriers
3. Social and cultural structure – Proximity to investing country
4. Technology – Information system and growth
5. Market structure – Competition and available partners

The BRIC economies are considered very prospective in terms of trade and investment plans. These are heterogeneous and are opening their markets for FDI. Out of the four countries, Brazil, India, and China are described as developing economies and Russia is described as a transitioning economy. (Bolotov & Gajdušková, 2013) 

In general, export and import trade values, total trade, FDI inflows, and outflows are used to measure the openness of a country towards trade and FDI. BRIC countries hold a significant place in merchandise trade.

BRIC nations have large inflows of FDI. During 2009, economic crisis, they were the major forefront in investment inflows. Most of the FDI inflows to BRIC economies are provoked by the market-seeking purpose. (Jadhav, 2012)