Business Market Entry in Global Markets
While traveling to Singapore on a vacation, you meet Ms.
Jenny Chang, an Asian business executive, in the plane. She is happy to learn
that you are the international business development consultant for a
multinational company. She becomes interested in your expertise and asks you to
work as her company’s consultant for a project involving new business
development in Pakistan. Her company has just invented a revolutionary new CAD
system for designing and weaving wool carpets that can improve the design and
manufacturing productivity significantly. Several patents protect the unique
design of this technological system. The CEO has asked you to formulate a recommendation
for how to expand into Pakistan. Your choices are (i) to export to Pakistan
from the manufacturing plant in Singapore, (ii) to license a Pakistani firm to
manufacture and market the computer system in Pakistan and elsewhere, and (iii)
to set up a wholly owned subsidiary in Pakistan.
Select the best of the three choices for Ms. Chang. Support
your recommendation by first evaluating the pros and cons of each alternative
for Chang’s company.
This assignment is analytical in nature. You are expected to
demonstrate your ability to convert your theoretical understanding of the modes
of international business entry into practical applications. Therefore, I would
hope that you will relate all of your answers to the situation in the case or
the scene presented and not provide generic text book answers.
Some factors that must be kept in mind to analyze the
situation and make your recommendations look practical to your client. As a
consultant, you can make some assumptions about the different aspects, such as:
1. What is the nature of the product: brand new high
technology consisting of a computerized CAD system. The CAD system that this
company wants to promote in Pakistan consists of two major parts: the hardware
which is a sophisticated weaving machine, and the software that designs the
carpets and runs the weaving machine. How important is it to protect patents
and the technology from being copied illegally? How important is the firm’s
intellectual property? How do transportation costs affect your decision?
2. Where is it being manufactured now: Singapore. What is
the level of manufacturing sophistication in this country when compared with
the target country?
3. What is the nature of the target market: What are the
relative business barriers in the two countries? Demand? Economic development?
Legal system for resolving disputes?
Patent protection laws or enforcement of the law?
Availability of skilled engineers and workers? Availability of suitable agents
or partners?
The consideration of the above factors will allow you to
produce an excellent report for Ms. Chang.
