Description
Purpose of Assignment
This week students will review and revise their Week 3 Research Analysis for Business Signature Assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company's production to a foreign market.
About Your Signature Assignment
This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments might be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.
Assignment Steps
Revise your Week 3 assignment, (I will upload) Research Analysis for Business, using the feedback provided by your facilitator. This Week 6 report should only include one conclusion, so you will need to rewrite the conclusion you included in your Week 3 assignment, Research Analysis for Business.
Select a foreign market in which to expand your chosen product. If you wish, you may use one of the countries your team analyzed in their Week 5 Comparative and Absolute Advantage Assignment. (China)
Prepare a minimum1,750-word report addressing the points listed below. The use of tables and/or charts to display economic data over the time period discussed is highly encouraged, you may submit any economic data in Microsoft® Excel® format in a separate file. You may use the U.S. Department of Labor's Bureau of Labor Statistics (BLS), U.S. Dept. of Commerce's Bureau of Economic Analysis (BEA), the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, and World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library. The new sections of your report should:
- Evaluate current global economic conditions and their effects on macroeconomic indicators in your selected country. Provide forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.
- Evaluate any competitors' existing production in the chosen country.
- Assess sales forecasts in the selected country by using the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library.
- Categorize the type of economy that exists in your selected country as closed, mixed, or market. What is the difference between these types of economies and how might this affect your expansion?
- Assess how your chosen country's current credit market conditions, especially interest rates and the availability of financing, affect demand for your product or service and your planning or operating decision for your production in that country.
- Analyze the role of the selected country's central bank on that country's economy.
- Compare the availability, education, and job skills of the work force in the selected country. Discuss any additional challenges of international production, such as political stability, availability of government financing or other incentives, threat of capital controls, and exchange rate risks.
- Explain any additional supply chain challenges you anticipate if attempting to make your product in your chosen country and selling the product in other countries.
- Based on the data gathered and analysis performed for this report write a conclusion in which you:
- Create business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations.
- Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented.
- Propose how the firm's position within the market and among its competitors will allow it to take your recommended action.
- Recommend strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government.
- Recommend any comparative advantages your company will have over competitors currently operating in that country, and defend your position, either for or against, expanding your company's production into your chosen country based on your research.
Integrate with the Week 3 Individual Assignment, and incorporate corrections and suggestions from the instructor's feedback. The final report should be a minimum of 2,800 words.
Cite a minimum of three peer reviewed sources not including the textbook.
Include all peer-reviewed references and government economic data sources/references from Week 3.
Format your assignment consistent with APA guidelines.
Explanation & Answer
Attached.
Running head: CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
Challenges of Expansion to a Foreign Location
Name
Institutional affiliation
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CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
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Abstract
Over the past two decades, China’s economy has grown four times faster more than in any other
economy in the world. China has experienced an incredible growth in its economy moving its
population from a low economy to middle and upper economy. Considering the size of China the
country has become a potential market for international companies mainly because of its large
population. Apple is one case of a company that targets its expansion through accessing the
market in China. Expanding to an international market requires thorough background
information based on economic and non-economic indicators to determine the success of a
company in a new country. This report will analyses the economic outlook of China through
different economic indicators, the nature of competition in China and conclude by giving
recommendations to Apple’s expansion into the China market.
CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
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Introduction
Global economic conditions and their effects on Macroeconomic
indicators in China
China as part of the BRICS nations has been experiencing economic growth and stability over
the past five years with notable growth in production and retail sales. China has felt a pinch from
the monetary policy that aims at deleveraging the economy, but the action has borne fruits
(Amiti, Mary & Caroline Freund, 2010). Based on economic data China has a strong global
demand and a resilient dynamic with exports and imports accelerating the economy.
Economic outlook
China experienced profound growth over the last decade with has catapulted the country to be
the world’ second largest economy (OECD). When China enacted economic reforms that would
trigger growth and stability in the economy the country moved from the ninth position in its GDP
at $214 billion in 1978 to jump to the second position to a GDP of $9.2 trillion (Amiti, Mary &
Caroline Freund, 2010).
CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
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GDP
In comparing China’s GDP to that of the rest of the world, it can be noted that the GPD growth
rate continues to fall. Despite the fact that China’s economy is growing irregular it continues to
match with the world GDP. In comparison when the world GPD was at 4.6% in 1983 the
economy of China was growing three times higher at 15.2%. It was the broad move that China
made in 2001 when it joined World trade organization which brought positive results as well as
negative such as the great recession of 2007-2009 (WTO). The projection of GPD growth is that
the rate will be declining. Despite the slowdown in the economy, China has positive growths
compared to other western countries.
Despite the comparison of China’s economy, the comparison reached limits when it comes to the
type of economy. Most western countries are capitalist while China is not which makes it quite
CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
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different. However, China’s slowdown in the economy is due to external forces that cause the
world economy to slow down.
GDP per capita growth
China represents 55% of the world’s average GDP per capita, and by last year it was recorded at
6894.5 USD. Over the past fifty years the GDP per capita has averaged 1562.61 USD, and in
2016 it hit the record high of 6894.5 USD and a low of 132 USD in 1962 (OECD). According to
economic analysts, they expect that the GDP will close at 14, 520 USD in 2017 (Maddison,
2010). On a long term projection analyst predict that GDP per capita will rise to approximately
18450 USD by 2020 (OECD forecast).
Population growth
China’s population has contributed to propelling China to the second largest economy in the
world as it influences the development and the world economy. According to World Bank (2017)
analyst predict that the population in China will grow by approximately 1406.54 million by
CHALLENGES OF EXPANSION TO A FOREIGN LOCATION
2020.
By 2015 economic analysts predict that China’s population will reach 1.39 billion which will
represent a growth of 7.2% compared to a growth of 5.2% in 2014 (world bank). By 2020 China
will be having the largest population compared to other countries. The yearly change will be
between 0.39% and 0.01% (Wor...
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