Case Study # 4: Foreign Markets Entry Decision for a Singaporean Firm
While traveling to Singapore on a vacation, you meet Ms. Jenny Chang, an Asian business executive, in the plane. She is happy to learn that you are the international business development consultant for a multinational company. She becomes interested in your expertise and asks you to work as her company’s consultant for a project involving new business development in Pakistan. Her company has just invented a revolutionary new CAD system for designing and weaving wool carpets that can improve the design and manufacturing productivity significantly. Several patents protect the unique design of this technological system. The CEO has asked you to formulate a recommendation for how to expand into Pakistan. Your choices are (i) to export to Pakistan from the manufacturing plant in Singapore, (ii) to license a Pakistani firm to manufacture and market the computer system in Pakistan and elsewhere, and (iii) to set up a wholly owned subsidiary in Pakistan.
Select the best of the three choices for Ms. Chang. Support your recommendation by first evaluating the pros and cons of each alternative for Chang’s company.
This assignment is analytical in nature. You are expected to demonstrate your ability to convert your theoretical understanding of the modes of international business entry into practical applications. Therefore, I would hope that you will relate all of your answers to the situation in the case or the scene presented and notprovide generic text book answers.
Consider the initially license a Pakistani firm to manufacture and market the computer system in Pakistan and elsewhere for the more return on initial investment. The main points of reference in your write up to support such a suggestion relate towards lower risks initially and more of an opportunity to recharging a profit margin. The goal of any business entity to expand globally is to set up a footing within the particular new country to establish and confirm prior market research a targeted consumer base exists.
Some factors that must be kept in mind to analyze the situation and make your recommendations look practical to your client. As a consultant, you can make some assumptions about the different aspects, such as:
1. What is the nature of the product: brand new high technology consisting of a computerized CAD system. The CAD system that this company wants to promote in Pakistan consists of two major parts: the hardware which is a sophisticated weaving machine, and the software that designs the carpets and runs the weaving machine.
Try and incorporate the brand name throughout the recommendation report along with a slogan for the new CAD system – to assists in describing the true nature of the product.
How important is it to protect patents and the technology from being copied illegally?
Depending on the country’s processes to gaining patent protection if the product is being sold in the new country, however, if the decision is made to only reflect manufacturing the product mostly in the new country the patent protection and enforcement can reflect from the origin country. Remember, the technology market always requires talented and skilled engineers as well as workers to assure constant availability.
How important is the firm’s intellectual property? How do transportation costs affect your decision?
Remember, the pursuit for business stability is only based on two main factors; financially stability and the good product/service idea. In which, the only way to sustain such two factors entailed protecting both, mainly, the patents have to be in place before in entry into a marketplace.
2. Where is it being manufactured now: Singapore. What is the level of manufacturing sophistication in this country when compared with the target country?
3. What is the nature of the target market: What are the relative business barriers in the two countries? Demand? Economic development? Legal system for resolving disputes? Patent protection laws or enforcement of the law? Availability of skilled engineers and workers? Availability of suitable agents or partners?
The case study example offers manufactured attributes of internally creating the product with proficiencies with initial financial ability to entry a new company through technology component platform. Thus, the relative business barriers could only constitute of legal, political, and market demand stability due to not as of yet position within the country’s marketplace that leads to determining on economic development, etc.
The consideration of the above factors will allow you to produce an excellent report for Ms. Chang.
Instructions:
- Prepare your responses in no more than 4 type written pages 4 type written pages (in APA Format).There is no need to write too much. Try to stick to the points.
