BUS 363: International Business

Phase I (6 - 7 pages, due – see Schedule) – 10%

1. Company Overview -- Describe the company, its business model(s), and marketing mix (4P) strategies. What are the pricing, product, place, and promotion strategies? Determine differentiation points and brand image of the product or service. Perform a SWOT and/or other analyses as listed in the Guide to the Case Method and models learned in class. What are the core competencies of the organization? Briefly describe the business problem and business objectives. Use realistic numbers for recent revenue (estimates are acceptable) and sales growth. Set clear deadlines, when possible, for your client.

2. Country Overview -- A survey of the country's history (very brief), current political and social systems, and legal issues. Identify the dominant issues that might affect conducting business in the country in the economic sector of your client. Describe the country’s major imports and exports, with focus on relevant and related to your client industries, and sources of foreign direct investment (FDI) as they relate to your company’s products and services. Identify whether the chosen country has common law or code law and what are the business implications (why it matters for business). How would you mitigate the various risks of investment (i.e., political, economic, etc.) in this country? Conduct a PESTEL analysis.

3. Culture and Ethics Briefing -- A survey of cultural practices important for the visitor to be aware of and a guide to cross-cultural success in the country. Identify cultural attributes (cultural traits, habits, norms) and their potential effects on business practices, especially as they relate to your company’s product or service. Define whether the culture indicates a low or high risk context. (Use resources / web-sites provided in your textbook). Assess the level of corruption in the chosen country and your assessment of effective ways to deal with it.

4. Business Practices -- Assess relevant current business practices and conduct analysis of market opportunities available to your client. Describe the factors determining the viability of an entry strategy to the country. Identify the country’s participation in any international business or tax treaties/agreements/unions (e.g., CUSMA). Describe trade and investment barriers relevant to your company’s operations. Describe factors and sources of information that will help you determine the likelihood of success of your decision to operate in this country (e.g., conduct analysis using Porter’s Diamond model).

5. Financial Environment and Currency Markets – Provide an analysis of the country's economic system, financial, currency, and accounting practices, and foreign trade policies. What kind of foreign exchange risk management / hedging tools would you recommend given the current exchange environment in the country of interest? What is the corporate tax rate, regulations regarding profit repatriation, other foreign-trade related regulations?

Phase II (12 to 13 pages) (Final Project – due Dec. 2) - 20%

(Note: submit Phase II in addition to the revised Phase I (based on my feedback, with track changes) in one file).

Market Analysis

What product or service are you selling and market conditions?

     Issues to address are:

• Specifications of your products and or services and key features relative to what prospective buyers in your target market are saying they need.
• What is the size of the market (volume in tonnes, units; sales – USD)?
• How is the product produced locally (if any)? How does it enter the country?
• What are the current trends?
• What regulations apply to your product or service?

Who is your customer?

Determine the market size and your target customer profiles, and analyze their buying decision processes. Provide information that will assist in choosing a location, determining product or services to be offered, establishing pricing, and planning a selling strategy.

Key issues to consider are:

• Who will buy your product? How frequently?
• Which segment of the market is the most attractive in terms of future growth potential, ease of entry, competition, profit potential and overall risk?
• Identify primary and secondary target groups, number of potential customers, and physical boundaries.
  • Where does the buyer consume or use the product?
  • What are the buyer's preferences and needs?
  • What factors influence the decision to buy?
  • Who is involved in the purchase decision?
  • How often will buyers buy? Where do they buy, when and how much do they buy?

Who is your competition?

Are there competitors that exist now and what new competitors are likely to enter the market? How will your product or service compare and what is the probable reaction of your competitors once you enter the market?

Issues to address are:           

• Who are your major competitors (name three – five, with brief descriptions, including sales)? What share of the market do they have?
• What are their strengths and weaknesses (e.g. quality, price, service, payment terms, location, reputation, etc.)?
• How do you compare to your competitors and how will they react to your entry into the market?
• What factors are there that could increase or reduce your competition?

What are your distribution channels?

There may be many options for moving your product to the customer such as direct retail, wholesale, consignment, broker etc. The method of distribution has important implications affecting your pricing structure, cash flow, etc. You will want to choose the distribution method best suited for your product and where you want to be positioned in the marketplace.

Key issues are:

• What methods of distribution are best suited for your product?
• What methods of distribution do your competitors use?
• What are the costs relative to market coverage?
• Port Selection (Origin Port, Destination Port)
• Mode Selection—Specify your mode of choice and discuss the advantages/disadvantages of each mode for reaching your country (Railroad, Air carrier, Ocean carrier, Motor carrier). What are the terms of each mode?

What are your Pricing strategies?

The objective is to optimize profits while remaining competitive in the marketplace. Pricing can be based on either the cost price or market price (what is the market willing to pay?). (Pricing strategy might be a sensitive topic for your client. You will need to exercise caution in this phase of your project).

Issues to consider are:

• What control do you have over the product price (e.g., exclusive product, no competition, high market demand, etc.)?
• What are competitor prices and how do they price their products?
• What price and sales volume are needed to achieve profit objectives (estimate)?
• Can you sell your product at different prices into different markets or market segments?
• Can you maintain your prices over time and what do you expect to happen to competitors’ prices?

• Have you considered the additional costs of transportation, tariffs, government licenses, customs duties, import taxes, and other international expenses (when possible and available)?

What are your Promotion and Selling strategies?

What are the best methods of making your customer aware of your offering? What message will motivate them to buy? What communication style should be used? From the promotion strategy the advertising budget and overall sales plan are then developed.

Items to consider are:

• What primary and secondary media of advertising are best suited to reach your customer? (e.g. primary - newspaper and radio; secondary - flyers and trade shows).
• What media of advertising and selling  strategies do your competitors use?
• What sales tools and training will be required for staff?
• What image are you attempting to build through your promotion?
• Who will head up the international effort? Will it be new staff or existing personnel? Will they need additional staff? In what roles? Will they open new offices?

Entry modes and strategies

Analyze and evaluate alternative entry modes and international expansion strategies, including guidelines for product lines. Will your client be working with existing companies in other countries or at home? How will you structure those deals/contractual arrangements?

Provide recommendations on whether to enter / avoid / defer decision on this potential market opportunity. Propose an implementation plan with deadlines.