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Phase 3 Individual Project

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Phase 3 Individual Project

  1. 1. MH Company Expanding its Markets Trade or Invest?<br />Phase 3 Individual Project<br />MGM355-0902B-04<br />International Business Practices <br />Professor Robert Miller <br />By<br />Delisa C. Fryer <br />
  2. 2. Global Market<br />There are three reason for shifting from domestic to global marketing :<br /><ul><li>Saturation of domestic markets
  3. 3. Death of the product in domestic market
  4. 4. New market opportunities
  5. 5. Global presence
  6. 6. Maximization of profit</li></li></ul><li>Research and Development<br />R&D has a special economic significance apart from its conventional association with scientific and technological development .<br />R&D investment generally reflects a government&apos;s or organization’s willingness to forego current operations or profit to improve future performance or returns , and its abilities to conduct research and development.<br />In 2006 , the world three largest spenders of R&D are the United States , China and Japan.<br />In general R&D activities are conducted by specialized units or centers belonging to companies , universities and state agencies.<br />Research involves the identification of possible chemical compounds or theoretical mechanisms in pharmaceuticals company. In the united States, corporations buy licenses from universities or hire scientists directly when economically solid research level products emerge and the development phase of drug delivery is almost entirely managed by private enterprises.<br />
  7. 7. INTERNATIONAL ORGANIZATIONAL STRUCTURE<br />Managing risk<br />Management decision and control<br />Motivation across cultures<br />Leadership across culture<br />Human resource selection and development<br />
  8. 8. International Trade & International Invest Strategy and Recommendations<br />Strategies - Greenfield venture<br />Advantages - First-mover advantages <br />Disadvantages - carry-over problems the existence of government <br />
  9. 9. Trading Strategy, Expected Profit, Risk Management and Market Analysis. <br />Trading Strategy<br /> The strategy is the implementation of Portfolio Theory, means to diverse the investment funds. It also covers diversification on transaction time : short-term trading, middle-term trading, long-term trading, or the combination among the three to minimize risk.<br />Expected Profit<br /> Expected Profit is one way to maximize profit from trading. It is based on exchange rate expectation, counter risk and investment value in the future compared with potential profit. Particularly in Hang Seng market is vary from 250 up to 2000 points per annual day.<br />Risk Management<br /> Stock exchange market is very unpredictable. It can change within hours, minutes even seconds. A wise trader must equipped with a method to minimize any possible risk that may occur. And risk management is a must have tool to do that. Risk Management is a strategy to manage risk and limit it by putting a stop order. Stop order helps traders to control the risk from losing the entire margin.<br /> I put a stop order 50 points as an insurance of the profit. When there is a correction on the market, the gains will be protected by advance trailing stop.<br />
  10. 10. Recommendations for MH Company.<br /> International Market Expansion Strategies<br />
  11. 11. 14-8<br />Relationship of Strategic Alliances to Companies’ International Objectives<br />
  12. 12. Firm Strategy, Structure and Rivalry<br />Long term corporate vision is a determinant of success<br />Management ‘ideology’ and structure of the firm can either help or hurt you<br />Presence of domestic rivalry improves a company’s competitiveness<br />4-9<br />
  13. 13. FDI Based Explanations: Dunning’s Eclectic Paradigm<br />Three conditions determine whether or not a company will internalize via FDI:<br />Ownership-specific advantages – knowledge, skills, capabilities, relationships, or physical assets that form the basis for the firm’s competitive advantage<br />Location-specific advantages – advantages associated with the country in which the MNE is invested, including natural resources, skilled or low cost labor, and inexpensive capital<br />Internalization advantages – control derived from internalizing foreign-based manufacturing, distribution, or other value chain activities<br />10<br />
  14. 14. Two Types of International Collaborative Ventures<br />Equity-based joint ventures result in the formation of a new legal entity. In contrast to the wholly-owned FDI, the firm collaborates with local partner(s) to reduce risk and commitment of capital.<br />Project-based alliances do not require equity commitment from the partners but simply a willingness to cooperate in R&D, manufacturing, design, or any other value-adding activity. Since project-based alliances have a narrowly defined scope of activities and timeline, they provide greater flexibility to the firm than equity-based ventures.<br />11<br />
  15. 15. The UK<br />
  16. 16. Australia<br />
  17. 17. India<br />Strong trade ties with U.S.<br />High demand in healthcare sector<br />Population 1.2 Billion<br />Hofstede index: Individualism/Long-term orientation<br />
  18. 18. References <br />Cool., K & Dierickx. I (1993) Rivalry, Strategic Groups and Firm Profitability Retrieved June 23, 2009 from (http://www.jstor.org/pss/2486549<br />Economy and Business Practices (2009) Retrieved June 22, 209 from <br />http://www.buyusa.gov/uk/en/doing_business_uk.html<br />India In Business (2009) Retrieved June 21, 2009 from http://www.indiainbusiness.nic.in/whyindia.htm/ British <br />The Big Push and International Trade: Exports as Investment Strategy(2009) Retrieved June 23, 2009 fromhttp://jobfunctions.bnet.com/abstract.aspx?docid=171060 <br />Journal of Business Key Success Factors for Strategy (2009) Retrieved June 23, 2009 from http://linkinghub.elsevier.com/retrieve/pii/S0148296307002329<br />