Managing in a Global Environment
Managing in a Global Environment
MGT-4478
Instructor name
Martha Borowski
Submitted by
Lijian Ren
Date
08/17/2015
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Managing in a Global Environment
Magic Mart
Magic Mart is a departmental store, which offers variety of goods ranging from shoes,
accessories, jewelry, hardware, furniture, electronics, toiletries, etc (“Magic Mart”, n.d.). As we
all know departmental store is a place of business usually owned and operated by a retailer but
sometimes owned and operated by a manufacturer or by someone other than a retailer in which
merchandise is sold primarily to ultimate consumers. The business that the company is dealing is
large business organization, which has recruited more than 2,000 employees. The company
offers wide range of manufactured goods to all categories of people whether it is child,
adolescent or old. Being a US based company, it has been decided to expand the business
overseas because of wide acceptance by the customer and the country decided to expand the
business is India.
Environmental factors
In past few years, India has been leading the global market by providing quality goods at
economical prices. The current price of GDP has increased from US$ 1,875.3 billions to US$
2,308 billions from 2013 to 2015. The GDP percentage has also increased from 6.9 to 7.5.
(“World GDP Ranking 2015 | Data and Charts”, n.d.). There is decrease in unemployment rate in
past few years from 9.4% in 2010 to 4.9% in 2014. This shows that there will huge employment
opportunities for local citizens (“India Unemployment Rate”, n.d.). The export partners of India
are China (11.92%), UAE (8.35%), Saudi Arabia (6.85%), USA (5.19%), Switzerland (4.59%),
Iran (4.17%), Qatar (3.47%), etc in 2012-2013. Similarly import partners are USA (13.87%),
UAE (13.09%), Singapore (4.68%), China (4.52%), etc. From this we observe that there is good
trade relation between India & USA, and also with nations (“India's trade: full list of exports,
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Managing in a Global Environment
imports and partner countries “, n.d.). The industry growth rate shows a rising trend from 0.4%
to 3.8% from June 2014 to June 2015 (“India Industrial Production”, n.d.).
Looking at other factors like geographical factors which includes availability of natural
resources, access to raw material and resources, climate, availability of land and environmental
issues. India is a land rich of resources with abundance of solar energy, wind energy, minerals,
etc. From past trends it has been observed that India is less prone to natural calamities like
floods, earthquakes, tornadoes, etc, while these calamities are quite normal in most of the
nations. Climatic conditions are also favorable, throughout the India observes winters, summers,
autumn, spring seasons that is very good for majority of crop production.
Some of the Political Legal factors include type of government, labor and employment
laws, governmental assistance to foreign businesses, etc. India is a federal nation with
parliamentary form of government. It is a socialist nation, which means there is both public
sector and private sector (“India”, n.d.). India is not a politically stable nation but once the party
wins it holds the position for five years. The Foreign Direct Investment has also increased from
US$ 36 billion in 2014 to US$ 44.9 billion in 2015 (“FOREIGN DIRECT INVESTMENT”,
2015). The government keeps on reforming labor laws for the betterment of employees and
labor.
Conclusion
As stated earlier, business venture in India will prove to be very successful. Because of favorable
trade policies, export, import and employment rate. Moreover the geographical condition of
nation is also suitable for growth of business. India is a nation with huge potential of young
generation with the age group of 18 to 30 years. Apart from all these benefits there are certain
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Managing in a Global Environment
challenges, which may arise like permission from government to set up a business is a big task.
The company should thoroughly prepare for benefits, which can be provided to India in order to
influence the government. The second major challenge may arise huge capital investment and the
profitability of the company. The government of host nation may set strict terms and conditions
for Foreign Direct Investment. The central and state government is also different in India. Also
the majority of young people are migrating to USA, Canada and other nations for higher studies
and job perspective. Apart from all these challenges, the growth rate of economy in terms of
GDP and GNP shows that it will be a profitable venture. The only thing, which is required, is
less interference of central government. As it is quite obvious that government will be asking for
some sort of share in profits and taxes.
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Managing in a Global Environment
References
•
“FOREIGN
DIRECT
INVESTMENT”,
2015,
retrieved
from
http://www.ibef.org/economy/foreign-direct-investment.aspx
•
“India
Industrial
Production”,
n.d.,
retrieved
from
http://www.tradingeconomics.com/india/industrial-production
•
“India's trade: full list of exports, imports and partner countries “, n.d., retrieved from
http://www.theguardian.com/news/datablog/2013/feb/22/cameron-india-trade-exportsimports-partners
•
“India”, n.d., retrieved from http://www.infoplease.com/encyclopedia/world/indiagovernment.html
•
“India
Unemployment
Rate”,
n.d.,
retrieved
from
http://www.tradingeconomics.com/india/unemployment-rate
•
“Magic Mart”, n.d., retrieved from http://www.magicmartstores.com/
•
“World
GDP
Ranking
2015
|
Data
and
Charts”,
n.d.,
http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts
5
retrieved
from
Term Project
MGT 4478: Managing in a Global Environment
Troy University
Section One; Country Study:
Assume your company has decided to expand their US business into an international
business. You have been asked by your company to research potential countries to determine
which country they should expand their business to as their first overseas venture.
Assignment Criteria:
A. Introduction
a. Pick a real organization to use as your template organization for this project.
The organization can be a large multinational organization, a large domestic
organization, a small organization, or your current (or previous) employer. State
whether your organization will be selling a product (state product type), selling
a service (state service), or set-up a manufacturing facility (state type of
manufacturing).
b. Research and determine a country that you would recommend to your CEO for
international expansion. State the name of the country you will be
recommending for international expansion.
B. Perform a country study to help determine the any potential issues, costs, and the
benefits of doing business in a particular country. At the end of your study, write a brief
summary (250 words or more) that concludes your findings highlighting some of the
challenges, benefits, costs, etc associated with entering this country.
Below is a list of the environmental factors you need to study and discuss in your study.
Economic/Geographic:
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GDP
o GDP –real growth rate
o GDP – per capita
Labor
o By occupation
Total Exports
o Exports – commodities
o Exports - partners
Total Imports
o Import – commodities
o Import - partners
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Infrastructure – physical (transportation) & informational (communication)
Unemployment
Industries
o Industries growth rate
Geographic:
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Natural resources
Access to resources and raw materials
Climate
Land use
Current environmental issues
Natural Hazards
Political-Legal:
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Type of government
Political stability
Foreign investment and approval procedures
Regulatory requirements
Labor and employment laws
Governmental assistance programs for foreign businesses
Tax laws and applicable treaties
Under External Links in our course I have provided you with a link to the CIA factbook, this is a
great resource to find out many of the above facts about a country. I do require that you use
at least two additional sources to complete this assignment. PLEASE remember to cite all
your sources; proper citation of your sources is a requirement for this course. This assignment
is to be a minimum of 2 - 4 pages typed, font 12, double-spaced.
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