Opening and Operating Business Within Foreign Country Project

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Business Finance

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As you recall, we are working on a course project. The final deliverable of the course project is a detailed memo that you will prepare, outlining the opportunities and constraints of establishing operations in another country from a legal perspective. There are three parts to the project.

This is Phase 3 of the assignment. Read two- to three-recent articles and/or cases on the Internet, concerning opening and operating a business within a foreign country. These types of recent articles and/or cases are important in supporting your project.

Write a two- to three-page summarization of the articles.

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Running head: MARKET EXPANSION International Operations Tea Kvaratskhelia 1 2 MARKET EXPANSION Introduction Organizations are faced by the necessity of expansion at one time of their existence in their market as they grow. The pursuit of a wider market and better economic opportunities sends organizations across borders and deep into the global markets. Organizations take on this market ventures with the hopes of enhancing their performance as well as ending up in strategic positions globally to facilitate their interaction with customers. In this scenario, PepsiCo is targeting the inception of South Sudan as a global venture for the organization. This calls for various operations and studies before the market can be incepted. Reasons for the Consideration of this Expansion There are various reasons for the consideration of this venture. For one, Pepsi is targeting the growing economy that is affiliated to South Sudan. South Sudan is the youngest country in the world having gotten its independence from main Sudan back in the year 2011. This presents this organization an opportunity to establish itself early in advance and capture the target market with minimal competition. The new economy is a new opportunity for PepsiCo to grab the international opportunity of expansion (Steger, 2017). This also means that there are fewer regulations as well as levels of competition within this market. Besides the young economy, another reason as to why PepsiCo is focused on venturing into South Sudan is due to the market opportunity that exists here. The population is a very good target for the products that this organization is willing to supply. The beverage and food industry is one that is dependent on quality; therefore, PepsiCo's previous market successes also assure their successful participation of this market for their enhanced performance. Tasks to be fulfilled 3 MARKET EXPANSION As a beverage and food industry organization, PepsiCo is going to be involved in the supply of their food and beverages within the market of South Sudan. This consists in venturing into the food sector within the country and availing the famous beverage, Pepsi Cola alongside the various snacks and foods it has developed to envelop over the last years in existence in this market. This will necessitate the establishment of shops that can allow individuals access to these various products from the organization. This can also be achieved through the use of vending machines across the country to supply the various snacks and beverages offered by PepsiCo. Location The location in the new market is very important if the organization is going to have any success at all. The location of a business is a huge determinant on how well it performs. The location for PepsiCo within South Sudan will be in Juba. This is the present capital city of the country as well as the largest city in South Sudan. By establishing ourselves in this city, we have access to the majority of the working population which is more likely to interact with our products as compared to the rural dwellers. The organization can also establish itself in various other cities within the country such as Wau, Malakal, and Bor. Establishment in cities is majorly aimed at access to a population that is willing to pay the required price for the products PepsiCo will bring forth (Steger, 2017). The administrator of the Move In order to pursue the market venture, PepsiCo will need to integrate various roles within the organization. The shareholders, as well as the other leaders, need to be included in the decision-making project. PepsiCo will also involve the human resource department for the purpose of staffing, the financial department of the organization for the establishment of needed 4 MARKET EXPANSION monetary resources and the managerial body to overlook the expansion processes such as creating the teams to carry out market research and so forth (Gomes, Carneiro, & Dib, 2018). The organization should also involve other complementary businesses existing in the country already (Steger, 2017). This will aid in their successful inception as well. Procession of the Expansion In order to successfully take part in market expansion into South Sudan, PepsiCo has to take part in various operations. One of these is the definition of their target market. By understanding their intended market, the organization then needs to go into market analysis where they look into the various aspects of the market that guide the decision to go forth with the venture or not (Steger, 2017). The selection of the market to be served is also a necessity of this process (Gomes, Carneiro, & Dib, 2018). This is then followed by the consideration of various market entry options that would suit PepsiCo and the South Sudan market. Finally, PepsiCo will be involved in the allocation of resources, human and financial to take part in this market venture (Gomes, Carneiro, & Dib, 2018). Legal Framework According to the World Trade Organization, South Sudan is a country with lots of potential with consideration to their trade in oil. It also highlights that besides this commodity, the country also has very little interactions to do with exports. The organization encourages the moving of foreign organizations into the market to help in the development of the economy of this young country. The report from WTO also highlights the potential that lies in the country’s Agricultural, mining, fisheries, and tourism sector. South Sudan is a member of the East African Community. This is a trade union that is aimed at the enhancement of trade and economic MARKET EXPANSION relations between six countries in East Africa. Its economic interactions are barred by the imposition of tariffs and other kinds of trade barriers as well. For the resolution of issues, the country has a well-established judicial system that can serve the purpose of mitigating any conflicts. 5 6 MARKET EXPANSION References Gomes, R. M., Carneiro, J., & Dib, L. A. (2018). Branded retailer expansion on a continent-sized emerging market. International Journal of Retail & Distribution Management, 46(9), 820834. Steger, M. B. (2017). Globalization: A very short introduction (Vol. 86). Oxford University Press. Running head: PHASE 1: COMPANY PROFILE Phase 1: Company Profile Phase 1: Company Profile 1 2 PHASE 1: COMPANY PROFILE Introduction PepsiCo Company needs to expand its business in South Sudan so as to achieve a sustainable growth. By expanding the business to South Sudan, the will be leveraged to be able to compete in the global market. New market in South Sudan which has a potential marketplace will be a milestone for PepsiCo Company. Therefore, this report is on the expanding a business in South Sudan. The report discusses the mode of entry, Human resource needs, marketing and distribution. Company Profile Company Profile (2016) reports that PepsiCo is made up of three different units with six different reportable segments. These segments make up the diversity of PepsiCo with each one representing a portion of their product. The major component of PepsiCo comes in the form of PepsiCo Beverages America (PAB), which saw 33% net revenue over the past year. PAB is the leading entity within PepsiCo in terms of success and prosperity meaning this is the main selling point for investing with PepsiCo (Fulkerson & Schuler, 2012). The structure of PepsiCo's worldwide activities has moved different tomes in its history because of global development and, starting at 2010, it is isolated into six reportable sections; "North America Beverages (NAB), Frito-Lay North America (FLNA), Europe Sub-Saharan Africa (ESSA), Latin America, Asia, Middle East, and North Africa (AMENA), and Quaker Foods North America (QFNA)" (PepsiCo, Inc., 2017, P. 4). Starting at 2009, 71 percent of the organization's net incomes originated from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East, and Africa. PepsiCo overall utilizes around 285,000 laborers. PepsiCo as a well-known company, PepsiCo is the producer of many of these countries 3 PHASE 1: COMPANY PROFILE delighted snacks and beverages. Initially being founded upon their beverage Pepsi Cola, there has been a change in the tide as PepsiCo has diversified its market into foods and snacks that many customers consume in addition to the beloved beverages that the company offers. PepsiCo Corporate Profile The Chairman and Chief Executive Officer of PepsiCo is Steve Reinmund, in the year 2005, PepsiCo recorded a solid performance, and was closing the gap with the main competitor, Coca Cola. PepsiCo puts a lot of emphasis on the wellbeing of the customers, and this means that it invests a lot in ensuring that all of it products are healthy. Though the company has recorded significant growth in terms of assets, the revenue has ditched to about 134 million dollars in the last four years. This demonstrates a decrease of around 3%, when contrasted with earlier year of 2004, in spite of increments in deals by 12% in the year 2005. Country Overview South Sudan is the youngest independent country having gotten its independence from Sudan in 2011. It has been marred by civil violence but the situation is predicted to stabilize given the coming together of the two opposing leaders, President Kiir, and former vice president Riek Mashar. The country is located in the eastern part of Africa. Given the fact that it is economy has started to thrive, this market would provide a great opportunity for PepsiCo. By expanding to South Sudan, PepsiCo, will have an opportunity to grow its market share, although this will come with various challenges such as cultural barrier (Yoffie & Wang, 2012). References PHASE 1: COMPANY PROFILE Fulkerson, J. R., & Schuler, R. S. (2012). Managing worldwide diversity at Pepsi-Cola International. Yoffie, D. B., & Wang, Y. (2012). Cola wars continue: Coke and Pepsi in the twenty-first century. 4
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Attached.

Running head: COURSE PROJECT

1

Course project
Student Name
University Affiliation
Date

PHASE 1: COURSE PROJECT

2

Table of Contents
Phase 1: Company Profile ............................................................................................................... 3
Introduction ................................................................................................................................. 3
Company Profile ......................................................................................................................... 3
PepsiCo Corporate Profile........................................................................................................... 4
Country Overview ....................................................................................................................... 4
Phase 2: Market Expansion ............................................................................................................. 5
Introduction ................................................................................................................................. 5
Reasons for the Consideration of this Expansion........................................................................ 5
Tasks to be fulfilled ..................................................................................................................... 6
Location ....................................................................................................................................... 6
The administrator of the Move .................................................................................................... 6
Procession of the Expansion ....................................................................................................... 7
Legal Framework ........................................................................................................................ 7
Phase 3: Opening and operating business within foreign country .................................................. 8
References ..................................................................................................................................... 11

PHASE 1: COURSE PROJECT

3

Phase 1: Company Profile
Introduction
PepsiCo Company needs to expand its business in South Sudan so as to achieve a
sustainable growth. By expanding the business to South Sudan, the will be leveraged to be able
to compete in the global market. New market in South Sudan which has a potential marketplace
will be a milestone for PepsiCo Company. Therefore, this report is on the expanding a business
in South Sudan. The report discusses the mode of entry, Human resource needs, marketing and
distribution.
Company Profile
Company Profile (2016) reports that PepsiCo is made up of three different units with six
different reportable segments. These segments make up the diversity of PepsiCo with each one
representing a portion of their product. The major component of PepsiCo comes in the form of
PepsiCo Beverages America (PAB), which saw 33% net revenue over the past year. PAB is the
leading entity within PepsiCo in terms of success and prosperity meaning this is the main selling
point for investing with PepsiCo (Fulkerson & Schuler, 2012).
The structure of PepsiCo's worldwide activities has moved different tomes...


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