At the end of the seventh century, a delegation from Japan requested that Nihon be used as the name of their country. This name may have its origin in a letter sent in and recorded in the official history of the Sui dynasty. The Nara period is characterized by the appearance of a nascent literature as well as the development of Buddhist-inspired art and architecture.
Deficient Infrastructure Inadequacy in infrastructure can be another factor that deters business expansion. According to a survey by MIGAthe reliability and quality of infrastructure and utilities was the fourth most important factor in choosing a country location to invest.
In general, poor infrastructure will increase overall capital and operating costs for firms for the reason that poor infrastructure increases the uncertainty risk and requires firms to hold higher levels of inventory in order to reduce the risks of production being interrupted.
In some cases, a company has to incorporate its own electricity generators, water filtration units and communication facilities to reimburse the deficiencies of local infrastructure.
The access to roads and utility also further increases the company investment cost. McDonald is one of the examples.
McDonald as the global fast food giant was having expansion problems in India. Based on an article from India, McDonald as the global fast food giant has stores in China but in contrast it has just 50 outlets in India.
The major issue here is the shortage of infrastructure, especially highway roads that link to smaller towns in India. According to the survey by global consulting major KPMG and Economist Intelligence Unit, 66 percent of the total executives stated that existing transportation infrastructure in India highly increases the operating cost for their company, 62 percent of Indian executives said the existing energy and power supply infrastructure has substantially increased the company operating cost.
However, companies can consider joint venture as market entry strategy to reduce the risk. Through joint venture, companies can share the financial risk, secure access to resources, gain local management knowledge and obtain access to market or distribution.
Policy barriers Macroeconomic policies are another problem that deter foreign firm from entering a market, increase cost and increase the business risks that foreign firm have to deal.
The major macroeconomic policies that could deter a business expansion are: High debt country tends to repay public debt by printing domestic currency and caused inflation and deprecation of currency.
In short, bad macroeconomic policies management will cause economic instability and increase the risk of future taxation, currency risk and currency convertibility risk which affects company profits. Euro Disney is one of the examples to illustrate the problem. The financial plans for Euro Disneyland first year operation anticipated total revenues of FF 5, million and a net profit after taxation of FF million.
European recession caused Euro Disney to fall into serious financial problem. In November the management announced a loss of FF million. The second year was even worse; they faced a loss of FF 5, million whereas total turnover was FF 5, million due to the failure of unforeseen European recession.
Managing global business is equal to managing the complexity; decision that made on today may be not appropriate tomorrow.
Thus, it is important to gather all information to create a basis for plan decision making.
All plans include uncertainty and risk because the nature of future planning requires estimation. Technology Technology is the key to provide businesses with the competitive edge that can lead to greater profitability and growth.
Indeed, technological factors can lower the barrier to entry and reduce the minimum efficient production levels, reduce capital costs and labor costs, and influence outsourcing decisions.
In order to avoid such pitfalls in outsourcing, a company like IBM can integrate the business strategy that focus on the technological advances to substitute software automation for its labor force. Entry Strategies When entering a foreign market, a company must decide on the appropriate entry strategy and ownership forms; while at the same time considering the legal structure, the amount of capital, resources invested, and managerial involvement required in the host country.
The management of joint ventures, for instance, is one of the key entry strategies a company can consider when expanding business overseas. International Business Machines Corporation IBMdevelopers and manufacturers of information technology products and services worldwide, though underestimated the costs associated with the joint ventures that recently formed with PC maker Lenovo resulting reduction in its profit margins.
From this case, selecting the appropriate entry strategies are the key factor in the success under different circumstances. IBM found itself facing not only more dangerous vendors, Lenovo, but also a new competitor that once underestimated.
Multinational corporations and their manufacturing partners in foreign market need to rethink how they manage their relationships with each other. For companies like IBM and the other multinational companies, partnership problems are one of the leading causes of joint ventures failure.The easier way to transfer money overseas.
Established in , Kangaroo Service developed according to the regulations and technologies of Indonesia and Australia through cooperation between PT. The Japanese are so ethnocentric that they do not learn even after having paid huge price for their policies without testing their (policies') relevance in the specific cultural milieu.
A Japanese MNE's policies led to severe violence and burning of company property by the workers in July in Gurgaon, India. A must read for students and scholars interested in the political economy of media.
Pickard weaves intensive archival work into a beautiful and cohesive narrative explaining how the American media companies become dominant, while also pointing out pathways for reform. Communication Problems of Overseas Japanese Corporations Introduction My six years of work experience in China allowed me to observe the Japanese culture objectively.
I noticed that one common problem causes many business failures, namely, our communication style; it is proving to be an obstacle in the way of Japanese globalization.
International Business Machines Corporation (IBM), developers and manufacturers of information technology products and services worldwide, though underestimated the costs associated with the joint ventures that recently formed with PC maker Lenovo resulting reduction in its profit margins.
This is the text of my keynote speech at the 34th Chaos Communication Congress in Leipzig, December (You can also watch it on YouTube, but it runs to about 45 minutes.).