Rationale for Exporting to (country name) State the rationale for selecting your target country. Refer to your Country Risk Analysis for highlights. Marketing Mix Determine the marketing mix specific to your selected product. Prepare a marketing plan that addresses any product modification, pricing, promotional programs, distribution channels, and ebusiness in your chosen country. Market Indicators and Trends Based on your analysis, what are the market indicators and trends for your product in your target market? Financial Overview Prepare a financial overview for your global venture. Include a chart that represents the general budget for the global venture. Explain how the company will handle foreign exchange risks for the global operation. Financing Sources Identify potential domestic and international sources of financingfor the global venture. Include at least two possible financial institutions within the chosen region. Organization Describe the degree to which your organization will operate as either a centralized or decentralized organization. Include a chain of command chart to illustrate how communications would reach senior management from the field when events necessitate changes in tactics or strategies. Exit Strategies What types of exit strategies would be most appropriate for your global venture? Some strategies to consider include divestiture of assets, handing over to a joint venture partner, diversification, shutting down operation, and contingencies for your global venture. Final Recommendations Based on your findings, make a final recommendation about the feasibility of this global venture. Would you recommend proceeding with this global venture? Explain why or why not. Running head: GLOBAL RISK ASSESSMENT FOR SWEDEN Global Risk Assessment for Sweden Meghan Ward MGT448 November 21, 2016 Dr. Joe Lui 1 GLOBAL RISK ASSESSMENT FOR SWEDEN 2 Global Risk Assessment for Sweden Political, Legal, and Regulatory Risks The political and legal situation in Sweden is very favorable. The government of Sweden has established measures to support foreign investment in the country especially food processing. The business climate in Sweden has been ranked number 8 by World Bank out of 189 in 2016. In addition, Sweden has over 65 bilateral agreements that are in operation currently such as Enhanced Opportunities Partner (EOP) of the North Atlantic Treaty Organization (NATO) (International Business Publications, USA. 2012). This country has strong economic relationships with U.S, whereby the U.S companies are the most represented foreign companies in Sweden and the U.S is the third largest export partner to Sweden. There will be no content that will be prohibited into entering Sweden since the products are organic. Exchange and Repatriation of Funds Risks The current exchange rate of U.S dollar to the Swedish Krona is 1 U.S dollar for 9.23 Swedish Krona. In comparison to the U.S dollar the Swedish Krona has fluctuated much especially in the last decade although it did not fluctuate widely. For instance, in 2002 it was 9kr, 8kr in 2003 and hit a low of 6.5kr in 2009. The current exchange rate in regard to the U.S dollar is around its historic high. After the business starts making profit, I can comfortably send the funds back to the U.S. (In Campbell, 2009). This is due to the fact that Sweden does not have limitations on the repatriation of funds by foreign investors. Competitive Risk Assessment GLOBAL RISK ASSESSMENT FOR SWEDEN 3 Natural and organic foods produce is currently a big business in Sweden due to the growing awareness of the consumer. Due to this growing awareness and the very high spending in natural and organic products, Sweden is a good platform for companies wishing to deal with organic food materials. The biggest and leading competitor is the Arla Foods AB and Skanemejerier AB. These companies are local and they are best known for dairy products. To beat the competition from these companies, my company will focus more on other organic products apart from dairy products such as fruits and vegetables (International Business Publications, USA., 2007). Focusing more on fruits and vegetables will easily earn a significant market share since it is not fully exploited. Taxation and Double Taxation Risks Most of the taxes imposed on foreign investors in the various sectors in Sweden are not exploitative to the investors hence provides an effective climate of doing business. For instance, in the processing of food, the government of Sweden has put measures to support and encourage foreign investors willing to invest in those sectors. Since Sweden places taxes on repatriated profits and the U.S government will also tax the repatriated funds, there is a risk of double taxation (In Campbell, 2009). So as to eliminate this risk of double taxation, I will opt to hold the profits in offshore income. This is due to the fact that offshore taxes are very minimal compared to onshore taxes. Social, ethical and cultural risks In Sweden, family is embraced and there is respect for every individual. The people of Sweden have embraced a culture in which they accept different people with their different ideas. GLOBAL RISK ASSESSMENT FOR SWEDEN 4 The Sweden people are attached to fresh foods and fruits. They like having foods that have a combination of different species of fruits as well as vegetables. However, the Swedes like feeding on meat and foods that are made from flour. They may therefore not prefer more of the fresh foods that I will take into their country. Besides the unlikelihood of the Sweden people feeding on some of the foods that I will introduce in their country, there is the probability of them adapting to changes. For instance, I will have ways through which I will get to understand what they like best and through the help of some of the Swedes (International Business Publications, USA., 2007). There might be resistance to change by the Swedes but through persistence, the long term will be successful. I will also require gathering of information about the Swedish social structures to ensure that I have the best tactics of overcoming the barriers. Cyber or technological risks In the international business operations, there are the risks of technology. The technology used in the business world is dynamic and requires every organization to maintain a pace that will make them updated all through. On the other hand, information stored and transmitted through the use of technology may at times be at risk of some vulnerability such as hacking and other computer threats. In Sweden, there is the use of advanced technology which creates room for threats (In Campbell, 2009). There will be a need for my company to implement measures that will enhance the security of the technology applied in its operations. Tariffs and non tariff barriers The Sweden government has implemented the use of tariffs which act as a barrier to foreign investors. For instance, there is the use of taxes that make trading in the country hard and GLOBAL RISK ASSESSMENT FOR SWEDEN 5 in some cases; some of the organizations are unable to carry out their trading activities. There are also many requirements that every exporting company must adhere to before carrying out any of the business practices in Sweden. Licensing and documenting are required for any organization to remain viable in the country (International Business Publications, USA. 2012). On the other hand, there must be adherence to the legal requirements of the Swedish government for an organization to be successful. Role of international financing institutions Exporting companies require large amounts of capital for them to remain successful in the business operations. Some of the main institutions that fund the international organizations include the IMF and World Bank. The two organizations have remained at the top when it comes to funding foreign organizations in different countries. In my business, I will require the funding of the World Bank as it is more accessible than the other financial institutions (International Business Publications, USA., 2007). Additionally, there are some local financial institutions that can make funding easy through less restrictive terms and conditions in Sweden. Mission and objectives of the organization The mission statement of the organization is “To meet the needs of the Sweden community through provision of organic food exports at an affordable cost.” The company will achieve this mission statement through the utilization of its objectives (In Campbell, 2009). The objectives of my company will include; providing safe food for human consumption, to provide affordable organic foods for all the population of Sweden, to create a business environment that GLOBAL RISK ASSESSMENT FOR SWEDEN 6 facilitates development of the Sweden community and to improve the living standards of the Sweden people through provision of healthy food for consumption. Role of marketing In my company, marketing will assist in creation of a wide market base. Through marketing, my company will become widely known to the Sweden community where people will get to know that it is in existence. On the other hand, the marketing process will enhance the performance of the organization where sales will increase. What most people want is to have a brand that they can relate well with and one that they are proud of consuming. On the other hand, marketing will create awareness to the wider community on the existence of my company and the different products and services that are offered (International Business Publications, USA. 2012). Marketing in general will make the company known all over Sweden thus establishment and gaining of roots in the country will be easy. SWOT analysis for Sweden Strengths Have business units that are experienced There is high growth rate in the Swedish economy There are barriers in the market entry There is skilled workforce in the nation There are existing networks in sales and distribution GLOBAL RISK ASSESSMENT FOR SWEDEN Weaknesses The future profitability is uncertain There is less probability of future productivity Opportunities Widening of global markets Probability of having new markets There is provision of venture capital Threats Cash flow is inadequate There is the probability of increasing costs Government regulations hinder growth of businesses There is growth of technological problems Financial capacity is inadequate There is growing competition leading to lower profitability. Make strategy selection(s) 7 GLOBAL RISK ASSESSMENT FOR SWEDEN 8 Since the organic produce market in Sweden is not mature or saturated, there is ease of entry into the market even for foreign investors. So as to have a local appeal with the consumers of Sweden, I will partner with some local businesses in Sweden for a co-marketing arrangement. A local partnership will help the company to effectively and efficiently enter the local market due to knowledge of the operation of the market and least resistance (Larimo, Nummela, Mainela & Edward Elgar Publishing, 2015).The partnership will also be helpful in ensuring that any differences in the culture (business and social) of U.S and Sweden are effectively smoothened out. Select and justify an appropriate mode of entry for your global product The local partnership will help the company not only to effectively enter the local market but also survive and eventually be successful by acquiring a significant market share in the organic market. This will be achieved through the various advantages of partnership such as helping the business to learn the knowledge of the local market hence increasing the chances of success (Larimo, Nummela, Mainela & Edward Elgar Publishing, 2015). In addition, the local partners have a better chance of attracting the local customers to be loyal customers of the company. With a local partnership, the resistance that is likely faced by foreign investors will be significantly diluted. Devise contingency plan in case of failure or divestiture I have devised two strategies in case the organic products fail to reach the sales goals in the Sweden market. The first strategy will be to carry out an extensive marketing and promotion GLOBAL RISK ASSESSMENT FOR SWEDEN 9 of the organic products. This will help create awareness on the various organic products that the company offers their benefits as well as their respective prices. In case, this strategy also fails to hit the targeted sales, I will apply the second strategy which is a joint venture with an already existing company. This will help to ensure that the reputation of the company is not tainted neither is the trust of the customers that the company had acquired broken (Larimo, Nummela, Mainela & Edward Elgar Publishing, 2015). GLOBAL RISK ASSESSMENT FOR SWEDEN 10 Reference In Campbell, D. (2009). International protection of foreign investment: Volume 2. International Business Publications, USA. (2012). Sweden Business Law Handbook: Strategic Information and Laws. Intl Business Pubns USA. International Business Publications, USA. (2007). Sweden Investment and Business Guide. Intl Business Pubns USA. Larimo, J., Nummela, N., Mainela, T., & Edward Elgar Publishing. (2015). Handbook on international alliance and network research. Cheltenham: Edward Elgar Pub. Ltd. Running head: ORGANIC PRODUCE FOR SWEDEN Organic Produce for Sweden Meghan Ward MGT448 November 7, 2016 Dr. Joe Lui 1 ORGANIC PRODUCE FOR SWEDEN 2 Organic Produce for Sweden Region Analysis Regional Alliances and Economic Integration The products I intend to export will be located in Sweden whose regional location is in Northern Europe. Being a country in Europe makes Sweden a member of the European Union. There exists a stable relationship between Sweden and the United States. The country has ratified different treaties including NATO and EOP. Over the years, the country was focused on developing trading partnership within the European Union but recently, it has opted to export its products to other regions including Asia, Africa, and the United States (www.cia.gov). Although the economy is quite prestigious, the country functions on a pro-free trade basis whereby, it does not allow importation and exportation of goods from the country without the business person acquiring the required consent. Physical Environmental Issues The region is well developed and it has available and accessible roads. More so, there exist other means of transport including the airline among others. The region has a number of Mountains and Peninsulas and it has actually been considered the home of peninsulas around the globe. Despite the numerous physical features, it is quite unlikely that there will be any transportation issues as the airlines will ensure that I can fly over the features. Political Issues The politics of the region is quite stable and the existence of treaties including NATO has seen to a stable political arena. However, countries like Greece are struggling with political instability. Countries surrounding the region including Italy and other South European countries might lead to low economy in Sweden. ORGANIC PRODUCE FOR SWEDEN 3 Economy of Northern Europe The economy in Northern Europe is quite stable. More so, the economic levels of the countries surrounding Sweden are also quite stable and thus, it is unlikely that the surrounding countries will pull down the economy of Sweden. More so, being a member of the European Union has seen the rapid growth in the economic levels of the country (www.export.gov). The country has no intention to exit from the EU and thus, the economy of the country will continue growing and being stable. Financial Institutions Different financial institutions exist in the region. This includes the European Association of Public Banks, SEB (Skandinaviska Enskilda Banken), Swedbank, Handelsbanken, Avanza Bank, Sparbanken Öresund, Nordea, Ikano bank and the Länsförsäkringar bank among others. The financial institutions in the region offer financial aid to different people regardless of their nationality as long as they pass the credibility test. Healthcare issues The Healthcare standards in the country are quite high and they are consistent with the standards found in other countries. The drinking water available in the country has been deemed to be quite fit for the health of the citizens and the life expectancy in the country is also quite high. Currently, there exist no critical health issues that would affect my business transactions with the country. Their healthcare is also quite affordable and accessible. Terrorism Europe had enjoyed peace and tranquility for a long time but within the previous years, terrorism cases have started to become a major issue in the country. In 2010, the Stockholm bombings occurred while 2011 saw to the occurrence of what is now referred to as the ORGANIC PRODUCE FOR SWEDEN 4 Gothenburg Terrorism plot that occurred in Sweden and other reported cases of terrorism in different European countries including Finland among others. Rather than addressing the terrorism issue head on, the political heads of countries like Sweden have opted to make it the issue a political and extremist issue. Thus, terrorist activities might affect my export activities in the country. Country Risk Analysis Political Stability The country’s political arena is headed by a monarch and the country has an established constitutional monarchy and parliamentary democracy system. The political sector of the country is quite stable although the country experienced different issues that brought forth instability in their political arena in late 2014. The monarch system can give rise to dictatorship issues that might affect my ability to freely trade in the country but this is unlikely as the monarchy of the country has been in existence for a number of years and the issues that arose were dealt with (www.sba.gov). Sweden has suffered a number of coups but records show that the coups existed in the 18th and 19th Century and it is unlikely for any other coup to arise. The Economic Conditions The economy of the country has been stable for quite some time but it has encountered different challenges including the growing rates of unemployment in the country among others. More so, the economic levels of the country are rapidly growing which is quite beneficial to the country. Finance Options Available A number of banks exist in the country and the banks include; SEB (Skandinaviska Enskilda Banken), Swedbank, Handelsbanken, Avanza Bank, Sparbanken Öresund, Nordea, ORGANIC PRODUCE FOR SWEDEN 5 Ikano bank and the Länsförsäkringar bank among others. The banks are quite instrumental as they will offer financial aid whenever needed. Physical Activities Sweden has a chain of mountains known as the Scandinavian Mountain Chain that separates the country from Norway. The country also has other physical features including oceans, lakes and a gulf. The physical factors will not hinder my exportation. The country has available and accessible roads and it is home to a number of airports and railway services thus; adequate transportation will be provided (www.wto.org). The availability of the resources will help my entry to the country as the resources boost the economy of the country. Social, Health, and Environmental Conditions The Healthcare standards in the country are quite high and they are consistent with the standards found in other countries. The drinking water available in the country has been deemed to be quite fit for the health of the citizens and the life expectancy in the country is also quite high. Currently, there exist no critical health issues that would affect my business transactions with the country. Their healthcare is also quite affordable and accessible. Cultural Considerations Like any other country, Sweden has its own cultural practices and beliefs. I believe that the difference in our cultural orientation will be beneficial. It will allow me to experience a different culture. More so, I can create products that cater for their cultural heritage. The interaction will also give me new ideas. The ideas gained will allow me to come up with different methods to improve my business. Organization and Product Analysis Description of Organization ORGANIC PRODUCE FOR SWEDEN 6 Our organization is a widely known organization located in America that deals with the export of organic products. We established a company that deals with organic materials and started off as a store before we started exporting products. Our success in America was based on our organizational skills. Our target audience would be the people who opt for healthy lifestyles. My company offers the sale of organic vegetables that are naturally grown. Needs Assessment of the Country Very few stores in the country offer the citizens the naturally grown vegetables. More so, the life expectancy of the country is high but it can become higher if the people opted for a healthy lifestyle. They would also avoid chronic illnesses like cancer. Our product allows for the healthy lifestyles of the citizens in the country. Description of Product Our company deals with the production of organic food materials. We prepare and process all of our produce organically and as healthy as possible. More so we have found that many consumers have food allergies due to the food preservations and the artificial flavoring that other companies put in their product. The product allows for consumption of organic foods which reduces the risk associated with contracting lifestyle illnesses. Entry Strategy When exporting the products, the company will first find a local distributor. We will sell our products through the distributor. The option is the most recommended as it is quite accountable. More so, the distributor will have knowledge of the different practices of the community thus will understand the needs of the area. ORGANIC PRODUCE FOR SWEDEN 7 References Country Commercial Guilds - https://www.export.gov/ccg OECD Data - https://data.oecd.org/ Small Business Administration - Starting & Managing - https://www.sba.gov/managingbusiness/exporting The World Factbook - https://www.cia.gov/library/publications/the-world-factbook/ World Trade Organization https://www.wto.org/english/thewto_E/whatis_e/tif_e/fact1_e.htm The product that my company wants to export is organic produce. Vegetables and fruits (fresh and dried) as well as ready to go meals and healthy snacks. Everything is home grown and process without any artificial favoring or preservatives. Our company has made huge strides to make sure we prepare and process all of our produce organically and as healthy as possible. Also we have found that many consumers have food allergies due to the preservations and artificial favoring that other companies put in their product. Thru research we found that Sweden has been in need of fresh produce, as well as dried, ready to go meals, and healthy snacks. I am confident that our company Organic Grown can export our produce and give the people in Sweden that fresh organic taste that they carve for.
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