Imagine that your company is in agribusiness and is considering entering China w
ID: 1200872 • Letter: I
Question
Imagine that your company is in agribusiness and is considering entering China with a self-cleaning feed bunk for cattle. The item has a low value to weight. The technology is transient. The firm would like to use profits from the Chinese market to expand into other markets but it’s very expensive to set up a manufacturing facility and may not be possible given their resources. Select the most appropriate entry mode and fully justify your decision.
You are the assistant to the CEO of a small textile firm that manufactures high quality, premium-priced, stylish clothing. The CEO has decided to see what the opportunities are for exporting and has asked you for advice as to the steps the company should take. What advice would you give the CEO?
Explanation / Answer
1. A proper growth strategy should be implemented to expand the business in overseasd market. When, there is rise in inflation and current market sector gets a downfall, one should invest in foreign market.Since, the rise in inflation decrements exchange rate, as a result investing in overseas market is quite easy as the export business gets cheap. The value of currency in foreign market goes down giving advantage to those who want to expand their comapny in other markets in other countries. So, we can say downfall in currency in other country makes the export business sustainable and gives ways to grow and succeed.
With the result, the firms begins to invest in other market, giving a new scope to their company. Moreover, neew clients emerge and collaborate giving rise to organizational culture internally as well as externally.
2. Before getting into export market, one needs to have strategic planning in regard to the export business. One needs to have full information about the oveseas target market. Market reseach is done to understand the potential customers as well as the economic sector in whole to facilitate the growth in overseas markets. For example: in case the potential market is in Dubai, the product translation hasa to be changed , rules according to that country will be imposed. One needs to have the observation deliberately that whether that country will make you enough profits to enhance organizational growth or not.
Trade fairs and shows should be held to promote your business in the eyes of interested buyers, giving your business a new edge to develop in exports field.
Secondly, one must be familiar with the laws and regulations of the target markets. Knowledge of the law abroad is crucial before getting into export business. Export duties and tariffs differ from country to country.
Third step is to take care about funds and investments needed to be done to commence business in export sector. Some firms take the help of government for fund support.