International Business Expansion
Part 1: Please answer the below with a min of 250 words. Please site sources if any used.
Imagine that you work for a company that sells three (3) major products and has traditionally been conducting business within the U.S. The CEO asks you for your thoughts on setting up an organizational structure that could facilitate foreign expansion of the company. Determine the key issues that you would discuss with the CEO regarding the company’s international strategy before you make any recommendations. Recommend which one (1) of the three (3) strategies (emphasis on global, emphasis on location, or emphasis on global learning) should be used for foreign expansion of the company. Provide a rationale for your response.
From the e- Activity, examine two (2) potential risks that could adversely affect operational effectiveness of U.S. multinational corporations that have plans to do business in Cuba. Recommend strategies that could help the companies mitigate these risks. Provide rationale for your reasoning.
Part 2: please comment and give your opinion on the students discussion with a min of 100 words.
One major disadvantage for doing business in Cuba is the governments controls of production including manufacturing facilities, distribution centers, large-scale agriculture and energy projects, access to domestic capital, and control the hiring process because of the massive holding companies, and not only that, conceptualizations such as rule of law, due process, and honoring contractual agreements don’t exist in Cuba (Flynn, para 4).
Second, limited consumer purchasing power is also a key issue in the country. This is primarily caused because the average wages in Cuba are about $20 per month, with imported goods costing substantially more than they do in the U.S (Flynn, para 5).
Part 3: please comment and give your opinion on the students discussion with a min of 100 words.
Being able to provide direct information and suggestions to the CEO of a company means that your opinion and insights are of value to the organization.
Some of the key issues in the discussion would target the multinational strategies, it’s evident that when it comes to market and product promotion a company has to cater to the area and its diversity, multinational companies are trained in every area of each organization as it relates to the region and location they are in. “When a company chooses this option, it adopts the local responsiveness solution.” (pg.131 Cullen/Parboteeah) Normally a company has to be very efficient when it comes to marketing in a different region, all local businesses will conduct business similarly so in an attempt to follow suit and cater to the inhabitants of that region decision have to be made to produce goods and services that the locals are accustomed to.
Finding a great location can be a rare commodity, companies are wanted to have that centralized location so that the business will provide a ROI and continue to advance and grow in that economy.
The most significant disadvantage about doing business in Cuba is their government, as a country they are one of the most aggressive country with a very dominant government control, their government is in control of production, workers, people and import/export. This tend to pose a problem because they are not easily negotiated with when it comes to launching a business in that country.
Solution preview for the order on international business expansion