Please 100 words Drivers of Globalization in Practice: Global Business Needs Whe
ID: 1224733 • Letter: P
Question
Please 100 words
Drivers of Globalization in Practice: Global Business Needs When considering a country to enter with respect to global trade, business leaders must determine if the particular country under consideration has a sufficiently acceptable environment in which to operate. Based on your Readings and Learning Activities, consider Katjes Fassin Group, a German candy company headquartered in Emmerich, Germany. It is a growing candy company with 2013 sales of $445 million, 1,200 employees, and six manufacturing plants. Recently, its top management has been considering several possible expansion locations and the former Soviet state of Latvia is one contender. Based on your Reading and Learning Activities, discuss the following: What would Katjes Fassin’s top management want to know about the business environment in Latvia before reaching an expansion decision, and why?
Explanation / Answer
Few areas where the firm would like to investigate more is the availability of cheap labor and other resources including raw materials, legal environment, market response, and its possible effects on the local employment, local monopolies or oligopolies.
When a firm decides to expand beyond its national territory, it must entail, right in the beginning, the costs and benefits of such move. Labor being the immobile factor (to an extent), is investigate the most. Recent studies about Multinationals suggest that firms tend to locate themselves where cheap labor requirements are fulfilled. Next is the market elasticity and presence of local or global monopolies.
Strategic planning is needed to accurately predict the outcome of firm's entry and the reaction of the incumbent firms. In this decision, a knowledge of local culture or taste of people will be helpful. Lastly, legal environment must be conducive enough for the firm to operate with full potential.