I have to respond to two people

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Economics

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In your response post, compare and contrast the findings of your FRM with your those of your peers. Offer additional factors and considerations that may apply in their situations.

Ada Okpara posted May 11, 2018 2:59 AM( I have to respond to her)

In the factor rating method, trade unions in South Korea form the factor with the highest weight, given the fact that employees are free to form their own union to lobby for their rights and negotiate with the employer on various issues. The second factor in terms of weight entails whistleblower protection as it actually protects the employees from any retaliation by the employer (Lee et al., 2015). Thirdly, an employer cannot dismiss an employee with no just cause. In Korea, a just cause for dismissal of an employee ought to be significant such that if the employee is not dismissed then it would be burdensome to Caterpillar Inc.

On the other hand, the notable factor in terms of Russia corruption is the issuance of permits by the government. Given the fact that Caterpillar Inc. would require permits to enter into this market, the political corruption in Russia has the highest weight. In the second rank comes the “corrupt hierarchies” that characterize the Russian economy (Levin, 2000). Corrupt hierarchies have weight given the fact that caterpillar will need to contact various corrupt officials in the heavy equipment industry before setting operations in Russia.

Concerning culture, Caterpillar Inc. should be aware of the whistleblower issues since most South Koreans tend to be protective of their own and thus employees will tend to be secretive on critical information especially if it affects their colleagues. To deal with such a situation, the firm will need to follow the whistleblower protection regulation set by the government. Secondly, the company should not consider hiring women for senior positions, given the cultural perception of women in South Korea. As aforementioned, the Russian culture is marred by corruption especially by executive officials and therefore, for Caterpillar to thrive in this market, it is actually prudent to act like the locals and occasionally pay these officials to get business going smoothly. Secondly, the company should pursue any negotiations with other businesses cautiously and send expatriates who can effectively absorb odd behaviors such as threats to call off a deal or the other business representatives walking out of a negotiation table. In terms of product benchmarking, Caterpillar Inc. will need to do a competitive benchmarking and precisely focus on its products costs (Watson, 2015). Comparing Caterpillar Inc. heavy equipment costs and quality to those of direct competitors such as Volvo and Komatsu will be important before international expansion.

References

Lee, J., Chang, A., Kim, B. & Lee, L. (2015). Employment and employee benefits in South Korea: overview

Levin, M. (2000). Corruptions and institutions in Russia.

Watson, C. (2015). Design Refinement by Iterative Virtual Experimentation (DRIVE): A methodology to solving engineering design problems. Morehead State University.

Eliana Zamora posted May 10, 2018 11:54 PM(I have to respond to her)

Last week I wrote about working on international business in two countries: South Korea and Russia. I analyzed the weaknesses and threats of both markets.

Russia

1. Politics- This country is ran by the president Vladimir Putin. He is on the news quite often as he is one to pick fights with other countries. The United States in particular has had some rough encounters as the Russian government has sent spies to spy on out politicians and other military plans. Not having a trustworthy government could put them at risk for other countries not wanting to trade with them.

2. Language barriers- With the country being so large it has its opportunities when it comes to languages. Its inhabitants are of very many mixed races. There are a total of 120 different ethnic groups currently present in Asia. (Riasanovsky, 2018) This brings upon many different languages due to religious and cultural traditions.

South Korea

1. Competition- The steel, textile and shipbuilding industry affected by Chinese competition. (Coface for Trade, 2018) The Chinese government has slowed down the demand for these items. The competition between the two countries is significant with the COG.

2. Politics- South Korea I very quiet but its neighbor North Korea not so much. There have been military conflicts with the North Korean president threatening major countries to use nuclear weapons on them. The United States has bases right outside of the capital of Seoul. This being one of the biggest cities for production and exports it does not set a settling feeling for investors to move in.

Factors:

  1. Common business laws
  2. Product availability
  3. Marketing strategy
  4. Local competition

Russia

S. Korea

Threat/Weakness

Weight

Raw Score

Weighted Score

Raw Score

Weighted Score

Common business laws

0.2

60

12

20

4

Product availability

0.3

65

19.5

30

9

Marketing strategy

0.15

30

4.5

80

12

Local competition

0.35

70

24.5

70

24.5

Total

1

60.5

49.5

Based on the SWOT created last week the biggest threats at both countries are politics, competition, and language barriers. Caterpillar an international company already has faced challenges as they enter different markets. By determining the weaknesses I came up with the following factors that contribute to these challenges. 1. Common business laws-my concern with this is how they would treat an outside company coming into their home market. Will they weigh heavily on taxes so that this company cannot make it and local companies can? Will it be made more difficult to follow business ethics and practices due to their unsettling government? 2. Product availability is a big concern more for Russia than South Korea. With Russia being the biggest country in the world bordering two continents this could be a huge challenge to overcome. South Korea being a little easier to access does not phase that threat as heavily as Russia. 3. Marketing strategy- as always when entering a foreign market, or any market, it is important to study and analyze what local business trends are, demographics to target, and in which way to handle it. I weighted South Korea heavier on this one because of its competing neighboring countries. China and Japan in particular are huge manufacturers of robotics and steel product. This is not as big of a threat in Russia simply because the next factor will be the local competition. 4. Local competition-is huge for both countries. Russia is tough because of the unknown factors from region to region. How difficult will it be to have distribution centers set up? While the competition has already had this all mapped out and created a logistic presence in the market. South Korea also has this as one of its main threats. Some of these key local competitors include Advantest, Applied Materials, ASML, KLA-Tencor, and Lam Research. (Tech Navio, 2015)

Works Cited

Tech Navio. (2015, September). Retrieved May 10, 2018, from https://www.technavio.com/report/semiconductor-pro...

Coface for Trade. (2018, January). Retrieved May 3, 2018, from http://www.coface.com/Economic-Studies-and-Country...

Riasanovsky, G. A.-W. (2018, April 28). Encyclopedia Britannica. Retrieved May 3, 2018, from https://www.britannica.com/place/Russia

Yu, B.-h. H.-B.-i. (2018, May 3). Encyclopea Britannica. Retrieved May 3, 2018, from https://www.britannica.com/place/South-Korea

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