international business final

7/31/2019 International Business Final

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TABLE OF CONTENTS

Company background Universal studio ............................................................... 4

Country overview - Brazil ...................................................................................... 6

Country background - Brazil .................................................................................. 7

Country overview South Korea ........................................................................... 8

Country background South Korea ....................................................................... 9

Policital and legal Environment ........................................................................... 10

Political Stability ................................................................................................................................ 10

Business FreeDom ............................................................................................................................. 11

Trade Freedom ................................................................................................................................... 13

Taxation policies ................................................................................................................................ 14

Effectiveness of Legal Environment ........................................................................................... 15

Economic Environment ....................................................................................... 17

General Economic Indicators ........................................................................................................ 17

Economic Freedom ........................................................................................................................... 19

Tourism Economy ............................................................................................................................. 21

Social Environment ............................................................................................. 23

Ethic Groups and Education .......................................................................................................... 23

Households ........................................................................................................................................... 26

Consumer Behaviour and Lifestyle trends .............................................................................. 27

Choice of Country ............................................................................................... 31

Entry Strategy ..................................................................................................... 36

Conclusion .......................................................................................................... 39

Bibliography and References ............................................................................... 40


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LETTER OF APOLOGY

Due to unfortunate circumstances and events, I was unable to submit the assignment

at the deadline. I deeply apologies for my failure action and I promise to fulfill

requirement in the future.

Moreover, I would like to apologies for not conducting full PESTLE analysis. Although

total word count limit is 5,000 words, my assignment was exceeding 10,000 words

(exclude references). Due to this reason, I decided to exclude unimportant part,

which is technological environment. My technological environment analysis,

emphasize on country infrastructure and technological readiness such as availability

of electricity, Internet and latest technology which is essential for the business. After

the analysis both country have the almost identical result. From my prospective, I

think that it dont have much to discuss thus, therefore I decided that the technology

environment is not important. I would like to apologies if my decision went wrong

from your prospective.


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INTRODUCTION

COMPANY BACKGROUND UNIVERSAL STUDIO

Universal Studios is the one of the most successful company in the global

entertainment industries. Aside from the film production, company operates four

theme parks under Universal Studio theme park in Florida, California, Japan and

Singapore (Chavis, n.d). All the theme parks have thrill rides, shows and family

entertainment. Many of the Universal Studios attractions are based on classic and

familiar Universal movies.Though four Universal Studios parks, they each offer their

own selection of rides, and they are different experiences.

The history of Universal Studios theme parks began during the early part of the 20th

century. Tours at Universal Studios Hollywood began in 1915. The founder of the

studio, Carl Laemmle, decided to leverage the public interest in the film industry. The

Hollywood location was purchased by MCA in 1962 (Kelly, n.d). Within two years, the

company expanded its tour practices with tram rides and staged demonstrations ofspecial effects. Soon, the staged stunts became the primary feature of the theme

park. The most successful location in the network of Universal Studios theme parks

opened in Orlando, Florida, in 1990. The Orlando location was designed to focus on

the tourist element in an effort to rival Walt Disney World (Kelly, n.d). A Japan

location opened in 2001 and became one of the most successful attractions in the

country, prompting the company to expand into new locations (Kelly, n.d). After brief

analyzing several countries, Brazil and South Korea have most attractive emerging

market for Universal Studios Theme park.


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COMPARATIVE ANALYSIS

BRAZIL

VS

SOUTH KOREA


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COUNTRY OVERVIEW - BRAZIL

HIGHLIGH AREAS

1. Brazil is a Host country for upcoming of both 2014 FiFA world cup and the

2016 Olympic games.

2. Under ministry of tourism, Plan watercolor 2020 is in progress and expected

to increase in tourism industry.

3. Current president Dilma Rousseff is emphasizing on Brazil s taxation policies

might result in increase share price in some sectors such as steel, TEXTILESand electronics.

TRAVEL AND TOURISM INDICATORS, 2010 ESTIMATED

Percent of

Total

Annual growth

(% Forecast)

Travel and Tourism Industry

GDP US$ millions 258 2.0 4.6

Employment 1000 jobs 6 3.2 2.7

Travel and Tourism Economy

GDP US$ millions 1,464 11.5 4.5


Source; Above this data are acquire from The Travel and Tourism Competitiveness Report 2011,

http://www.weforum.org/issues/travel-and-tourism-competitiveness

Key indicator, 2010 estimated

Population - million 203.9

Surface area square kilometer 8,514,877

GDP trillion (US$) 2.172

GDP per capita (US$) 10,800

Real GDP growth (percent) 7.5

Source; Above this data are acquire from The World Factbook,

https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
http://www.weforum.org/issues/travel-and-tourism-competitivenesshttp://www.weforum.org/issues/travel-and-tourism-competitivenesshttp://www.weforum.org/issues/travel-and-tourism-competitiveness


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COUNTRY BACKGROUND - BRAZIL

Brazil is the largest and most powerful country in South America and has become

one of the world's most attractive emerging markets in recent years (Mozee, 2008).

Brazil accounts for almost half of South America's total population and landmass and

has established itself as the dominant power in South America (Central Intelligence

Agency, 2011). Moreover, Brazil's rapid economic diversification is allowing it to

transform itself into a modern economy, playing a key role in a variety of industries).

Brazil is a founding member of the United Nations, the G20, Mercosul and the Union

of South American Nations, and is one of the BRIC Countries. Brazil is also home to

a diversity of wildlife, natural environments, and extensive natural resources in avariety of protected habitats (BBC News, 2011). In the Global tourism market, Brazil

is ranked 1st out of all countries for its natural resources and 23rd for its cultural

resources, with many World Heritage sites, a great proportion of protected land area,

and the richest fauna in the world (World Economic Forum, 2011)

The Brazilian tourism industry was enjoying exceptionally good health until 2001.

Starting from late 2002, Brazilians lost buying power as a result of a series of

financial crises, and the slowdown in the countrys economy and it become the

trouble time for tourism market (Slob & Wilde, 2006). According to indexmundi.com,

Brazils GDP grew by a mere 0.5% in 2003. Brazil economy showed the first sign of

recovery in 2004. The country GDP grow 5.3 percent in first quarter of 2004

compared to the same period of 2003. Fortunately, Brazils economy remained in

strong health for 2004 - 2009 (Central Intelligence Agency, 2011). Its estimated

growth rate in 2010 is 7.5 percent, which is the highest for two decades. The

expected average annual growth is 4.1% for year 2011 and 3.6% for 2012 (Ragir,

2011). The greatest driving force for Brazil economy and its tourism industry, isBrazils forthcoming hosting of both the 2014 FIFA World Cup and the 2016 Olympic

games.


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COUNTRY OVERVIEW SOUTH KOREA

HIGHLIGH AREAS

1. South Korea industries trends are moving toward medical tourism and 1st

Asia

Medical tourism and global Healthcare congress was recently took place in

Seoul.

2. The Economist Intelligence Unit (EIU) STATES that South Korea economic

outlook will remain relatively stable for until 2015, with the forecast GDP

Growth rate of 3.8 to 4.1 percent annually throughout the five year forecast

period.

3. South Korea government policies are aiming at aiding a steady structural

adjustment of the economy, which include channeling funds into renewable

energy resources and negotiating free-trade agreements

TRAVEL AND TOURISM INDICATORS, 2010 ESTIMATED

Percent of

Total

Annual growth

(% Forecast)

Travel and Tourism IndustryGDP US$ millions 16,237 1.6 3.4




Employment 1000 jobs 1,910 8.1 1.5

Source; Above this data are acquire from The Travel and Tourism Competitiveness Report 2011,

http://www.weforum.org/issues/travel-and-tourism-competitiveness

Key indicator, 2010 estimated

Population - million 48.75

Surface area square kilometer 99,720

GDP trillion (US$) 1.459

GDP per capita (US$) 30,000

Real GDP growth (percent) 6.1

Source; Above this data are acquire from The World Factbook,

https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
http://www.weforum.org/issues/travel-and-tourism-competitivenesshttp://www.weforum.org/issues/travel-and-tourism-competitivenesshttp://www.weforum.org/issues/travel-and-tourism-competitivenesshttp://www.weforum.org/issues/travel-and-tourism-competitiveness


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COUNTRY BACKGROUND SOUTH KOREA

South Korea's economy ranks 15th in the world by nominal GDP and 12th by

purchasing power parity (PPP) (Central Intelligence Agency, 2011). The South

Korean economy depends heavily on international trade, and in 2009, South Korea

was the eighth largest exporter and tenth largest importer in the world (BBC News,

2011). South Korea's major industries include shipbuilding, production of armaments,

foreign and domestic construction, and production of Automobiles. South Korea has

advanced into a developed economy to eventually attain a GDP per capita of

$30,000 in 2010, almost thirteen times the figure thirty years ago. The whole

country's GDP increased from $88 billion to $1,460 billion in the same timeframe(Central Intelligence Agency, 2011). In 2009, South Korea officially became the first

major recipient of official development assistance (ODA) to have ascended to the

status of a major donor of ODA. Between 2008 and 2009, South Korea donated

economic aid of $1.7 billion to countries other than North Korea. South Korea's

separate annual economic aid to North Korea has historically been more than twice

its ODA.

South Koreas tourism industry measured in terms of tourism arrivals has expanded

by 8.8% and 9.6% for the years 1998 and 1999. Despite the Asian financial crisis in

1998, the tourism industry had a very good impact on South Koreas crisis-hit

economy. The industry foreign exchange earnings amounted to 85.5% of gross

domestic product in 1999, which is much higher than the electronic industrys

average of 69.1 percent (Korea National Tourism Organization, 2001). The Korea

National Tourism Organization (KNTO) began in 1962 as a government-invested

corporation to assist the promotional efforts of the tourism industry and local

governments. . In 2007, South Korea was ranked 36th of the most visited countries inthe world with an estimated 6.4 million foreign tourists visiting that year. Incheon

International Airport was rated the best airport worldwide consecutively since 2005

by Airports Council International.


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POLICITAL AND LEGAL ENVIRONMENT

The political areas have greater impact on the international business. Depend on the

type of the industries and fields of the business; various types of political factors are

needed to analyze. In this analysis, each country of political stability, business

freedom, trade freedom and tax policies will be compare.

Legal Environment analysis will include effectiveness of respective countrys law and

regulation regarding tax, labor, property rights and strength of legal protection for

foreign investors. Measuring the countrys legal effectiveness is extremely difficult

and uncertainty of result is also high. Depend one the individual prospective, the

result might be infinite. Therefore, analysis and comparison will base on ranking from

Global Competitiveness Report 2011, Travel and Tourism Competitiveness Report

2011 and 2011 index of Economic Freedom.

POLITICAL STABILITY

Political stability index - 2010

Indicators Brazil South Korea

Underlying Vulnerability 5.8 4.2

Economic Distress 5.0 6.0

Index Sore 5.4 5.1

Previous Score (2007) 4.4 2.0

Global Rank 165 countries 105th 117th

Sources; Above data are acquire from ViewsWire,http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0

Political stability index is arrange from 10 highest to 0 lowest political risk. Compare

to the 2007 score, both countries political risk was increased in 2007. The wall street

journal stated that Brazilian political system was vulnerability because of the election

in 2010 and countrys currency will continue to fluctuate (Lyons, 2010). During the

global financial crisis 2008, Brazil commodity price were declined and the stock

market had declined approximately by 30% and but overall economy are remain

stable (Knowledge@Wharton, 2008) Therefore, increasing the political risk by 1 point
http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0


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is acceptable. However South Korea political risk was increased by 3.1 compare to

2007 since country by itself is facing ongoing geo-politic issues with North Korea.

Moreover, Korea economic distress value is larger than Brazil, which is result from

2008 global financial crisis. During 2008 2009 crisis, Korea experience a sharp

reduction in its credit lines, a decline in equity markets and a dollar shortage in

foreign exchange. Moreover, country face largest export decline, which was -34.5

percent in January 2009 (KEI, 2010). Therefore it is safe to assume that Brazil have

the more resistance in economic compare to South Korea. It is indeed South Korea

is the winner in overall ranking however, Brazil is recommended because of the

economic durability and its emerging market potential.

BUSINESS FREEDOM

Business Freedom Comparison Chart 2007 - 2011

Sources; Below data are acquire from Economic Freedom,http://www.heritage.org/index/ranking

0

10

20

30

40

50

60

70

80

90

100

20072008

20092010

2011

54.2 54 54.454.5

54.3

84.3 84.190.4 91.9 91.6

Brazil South Korea
http://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/ranking


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Business Freedom Score Index - 2011

Country Score

Brazil 54.3

South Korea 91.5

Sources; Above data are acquire from Economic Freedom,http://www.heritage.org/index/ranking

SOUTH KOREA

After the 2008 global financial crisis, South Koreas business freedom grows strong

and serves as a source of vibrant economic growth (The Chosunilbo, 2010). The

competitive regulatory framework facilitates dynamic entrepreneurial activity.

Business formation and operating rules are efficient and allow innovation. Bankruptcyproceedings are relatively easy (eStandardsForum, 2010).

BRAZIL

The main barrier in Brazil for the business freedom is their excessive regulations. As

for the foreign organization, this regulatory inflexibility cause unnecessary delay in

order to start the business (World Economic Forum, 2011). Despite some progress

in Brazil, organizing new investment and production remains cumbersome and

bureaucratic. It is costly and time-consuming to launch or close a business.
http://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/ranking


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TRADE FREEDOM

Trade Freedom Comparison Chart 2007 2011

Sources; Below data are acquire from Economic Freedom,http://www.heritage.org/index/ranking

Business Freedom Score Index - 2011

Country Score

Brazil 69.8

South Korea 70.8


SOUTH KOREA

South Koreas weighted average tariff rate was 7.7 percent in 2009 (Heritage

Foundation, 2011). However, nation by itself is straggling with energy crisis and

therefore government recently impose some prohibitive tariffs, import and export

restrictions, services market access barriers, import taxes, use of adjustment tariffs

and taxes, burdensome and non-transparent standards and regulations, and

subsidies add to the cost of trade (World Economic Forum, 2011).

63

64

65

66

67

68

69

70

71

72

20072008

20092010

2011

69.870.8

71.6

69.269.8

69.2

66.4

70.270.8 70.8

Brazil South Korea
http://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/ranking


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BRAZIL

Mostly, Brazil and South Korea Trade Freedom are the same. However, cost of trade

which is relatively higher south Korea, are Import bans and restrictions, market

access barriers in services, high tariffs, border taxes and fees, restrictive regulatoryand licensing rules, subsidies, complex customs procedures, and problematic

protection of intellectual property rights (World Economic Forum, 2011).

TAXATION POLICIES

Tax Rate Comparison Index 2011

Indicator Brazil South Korea

Income Tax 27.5 38.5

Corporate Tax 34.0 24.2

Tax Burden %GDP 34.4 26.6


SOUTH KOREA

In South Korea, a foreign corporation is liable to pay corporation tax only on the

income derived from sources within Korea. However, no corporation tax is levied on

the liquidation income of a foreign corporation.According to Marco-Economic Datathat available from Heritage.org, South Korea foreign direct investment corporate

rate is 24.2%. Taxation policy in Korea is politically not very important since SouthKorea is the one of the OECD (Organization for Economic Co-operation and

Development) country with the lower Tax burden, low share of income tax revenue,

fixed local tax rates and lenient tax administration (OECD, 2011). However, due to

recent Asia financial crisis and increasing governments welfare expenditure, income

tax will be increase to 9.2% until 2013 and tax burden also expected to rise in future

(Xinhua, 2009)
http://www.heritage.org/index/rankinghttp://www.heritage.org/index/rankinghttp://www.heritage.org/index/ranking


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BRAZIL

Brazil's combined corporate tax rate for 2011 is 34%. The tax consists of a basic tax

of 15%. There is also a surtax of 10% for annual income of over BRL 240,000, about

US$ 110,000. Additional 9% are added for social contribution on net profits. Theworst aspect of the Brazilian tax system from the standpoint of a foreign investor is

extreme complexity (Melo et al., 2010). During the 2010 election, Jose Serra from

PSDB (Partido Da Social Democracia Brasileira) stated that Brazil has highest tax

burden in the developing in the world and current president Rousseff supported his

statement (Ottens, 2010). There are approximately 52 separate taxes, imposts,

duties, compulsory loans, withholdings and other charges and fees imposed by

federal and municipal governments (Melo et al., 2010). After the 2010 presidential

election, it was surprised that the issue of tax reform has a very low profile in the

agendas of president.

EFFECTIVENESS OF LEGAL ENVIRONMENT

Effectiveness of Legal Environment 2011

Indicators

Global Ranking

Brazil South Korea

Strength of Investor protection 59 th 59 th

Protection of Minority Shareholders interests 64 th 102nd

Property right 72 th 54 th

Efficiency of legal Framework 71st 87 th

Intellectual property protection 89 th 44 th

Legal right index 103th 39 th

Burden of customs procedures 122

nd

47

th

Burden of government Regulation 139th 108th

Number of procedures required to start a business 132th 73 th

Time required to start a business 135th 52 th

Source; Above data are acquire from Global Competitiveness Report 2009 - 2010,

http://www.weforum.org/s?s=Global+competitiveness+report
http://www.weforum.org/s?s=Global+competitiveness+reporthttp://www.weforum.org/s?s=Global+competitiveness+report


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SOUTH KOREA

In Overall ranking, South Korea is the legal environment is relatively stronger than

Brazil. Global competitiveness report 2011 state that property right is secure and

expropriation is highly unlikely but the justice system can be inefficient and slowerthan Brazil. Although intellectual property protection ranking is higher than Brazil,

2011 index of Economic Freedom suggest that the protection of intellectual property

rights need to be improved, as piracy of copyright materials is significant. According

to Travel and Tourism Competitiveness Report 2011, South Korea ranks a dismal

124th with respect to labor market flexibility and business leaders express dismay at

the difficulty of hiring and firing employees because of the Korea labor law. The

World Bank estimates that the average severance pay for dismissing an employee is

equivalent to 91 weeks worth of salary (The World Bank, 2011). This leads

companies to resort extensively to temporary employment, thus creating precarious

working conditions and giving rise to tensions.

BRAZIL

2011 index of Economy point out that, Brazils judiciary is inefficient, subject to

political and economic influence, and lacks resources and staff training (Heritage

Foundation, 2011). Court decisions and legal processing for business cases can take

years, and judgments by the Supreme Federal Tribunal are not automatically binding

on lower courts. Moreover, most of the politicians have greater influence on its

judicial system. Protection of intellectual property rights has improved compare to

2008, but piracy of copyrighted material persists (Heritage Foundation, 2011). Legal

barrier to the foreign direct investment are the taxation and labor law. The worst

aspect of the Brazilian tax system from the standpoint of a foreign investor is extreme

complexity. There are approximately 52 separate taxes, imposts, duties, compulsory

loans, withholdings and other charges and fees imposed by federal and municipal

governments (FIAS, 2001). The Brazilian labor law tends to be generous to

employees and paternalistic. Firing an employee will almost inevitably lead to a

lawsuit seeking back pay for overtime, alleging failure to pay equal remuneration for

equal work, etc. (FIAS, 2001). Therefore, The present structure imposes rigidities

and high labor costs to investors, making it difficult to employ Brazilian workers.


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ECONOMIC ENVIRONMENT

Analyzing the countrys economic is much more complex than other factors from

Marco-environment. Form the business prospective, countrys economic is the major

player in PESTLE analysis since it have the greater influence on countrys political,

social, Technology, even countrys legal system. As for instance, when a country

facing economy downturn, direction of its politic, consumer spending pattern,

technology development, and its regulations and certain law have to be adjust. Brazil

politic directions are heading to energy investment due to global energy crisis. South

Korea government is promoting medical tourism due to the shift in economic

direction. Therefore, economic environment is complexity because of theinterrelationship with other factors. Moreover, analysis result may be infinite depend

on what type of topic is choose to be analyze. This analysis will try to include as

many factors as possible such as general economic indicators, economic freedom

and tourism economy. Each country consumer behavior and spending pattern will

discuss more in social environment.

GENERAL ECONOMIC INDICATORS

General Economic Indicators 2010 EST.


GDP - trillion 2.172 1.459

GDP Growth Rate 7.5% 6.1%

GDP Per Capita US $ 10,800 30,000

FDI Contribution to its GDP 18.5% 28.7%

Inflation Rate 4.9% 3%

Unemployment Rate 7% 3.3%

GDP Composition by Service Sector 67.5% 57.6%

Labor Force - million 103.6 24.62

Labor Force in Service Sector 66% 68.4%

Sources; Above data are acquire from The World Factbook;https://www.cia.gov/library/publications/the-

world-factbook/
https://www.cia.gov/library/publications/the-world-factbook/https://www.cia.gov/library/publications/the-world-factbook/https://www.cia.gov/library/publications/the-world-factbook/https://www.cia.gov/library/publications/the-world-factbook/https://www.cia.gov/library/publications/the-world-factbook/https://www.cia.gov/library/publications/the-world-factbook/


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SOUTH KOREA

At the initial development of South Korea economy, Living standard and the

individual income was almost the same with poorer countries of Africa and Asia

(Central Intelligence Agency, 2011). After 1960s, South Korea had gained aremarkable record of economic development after adopting the high-tech

industrialized economy. In 2004, South Korea total GDP was exceed over trillion-

dollar, and entering into the world's 20 largest economies (KEI, 2010). Initially, a

system of close government and business ties, including directed credit and import

restrictions, made this success possible. The government promoted the import of raw

materials and technology at the expense of consumer goods, and encouraged

savings and investment over consumption (KEI, 2010). The Asian financial crisis of

1997-98 exposed longstanding weaknesses in South Korea's development model

including high debt/equity ratios and massive short-term foreign borrowing (Central

Intelligence Agency, 2011). GDP plunged by 6.9% in 1998, and then recovered by

9% in 1999-2000. Korea adopted numerous economic reforms following the crisis,

including greater openness to foreign investment and imports (KEI, 2010). Growth

moderated to about 4-5% annually between 2003 and 2007. With the global

economic downturn in late 2008, South Korean GDP growth slowed to 0.2% in 2009

(KEI, 2010). In the third quarter of 2009, the economy began to recover, in large part

due to export growth, low interest rates, and an expansionary fiscal policy, and

growth exceeded 6% in 2010 (Central Intelligence Agency, 2011). The South Korean

economy's long-term challenges include a rapidly aging population, inflexible labor

market, and overdependence on manufacturing exports to drive economic growth.

BRAZIL

Brazil economy showed the most significant development among South American

nations, characterized by large and well-developed agricultural, mining,

manufacturing, and service sectors. Although country itself is full with colorful

economic history, Brazil has steadily improved its macroeconomic stability, building

up foreign reserves, and reducing its debt profile by shifting its debt burden toward

real denominated and domestically held instruments after 2003 (BBC News, 2011).

In 2008, Brazil became a net external creditor and two ratings agencies awarded

investment grade status to its debt (Central Intelligence Agency, 2011). After record


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growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in

September 2008. During the recession, as global demand for Brazil's commodity-

based exports dried up and external credit was vanished (Bloom, 2009). However,

Brazil was one of the first emerging markets to begin a recovery. Consumer and

investor confidence revived and GDP growth returned to positive in 2010, boosted by

an export recovery (BBC News, 2011). Brazil's strong growth and high interest rates

make it an attractive destination for foreign investors. Large capital inflows over the

past year have contributed to the rapid appreciation of its currency and led the

government to raise taxes on some foreign investments (Central Intelligence Agency,

2011). President Dilma ROUSSEFF has pledged to retain the previous

administration's commitment to inflation targeting by the Central Bank, a floating

exchange rate, and fiscal restraint.

ECONOMIC FREEDOM

There is no definite definition on the economic freedom, however, in general some

evidence show that there are strong relationships between economic freedom and

quality of life (EcnomicFreedom.org, 2011). Countrys economic freedoms are

determined by inflation and income per person. As for an instance, most free

countrys economy provides better income level, better civil right, lower corruption,

and lower unemployment rate.

SOUTH KOREA

According to 2011 index of economic freedom, South Koreas have the 35th freest

economy in the world with the economic freedom score of 69. Moreover South Korea

is ranked 8th out of 41 countries in the AsiaPacific region. Inflation rate is stable at

3% and unemployment rate is relatively as low as 3.3%. According to The World

Fact Book 2011 index, South Korea standard of living is high with the approximately

US $ 30,000 income per capital. South Koreas dynamic economy successfully

survived the global economic recession and demonstrated a considerable level of its

economy strength. In order to promote as one of the worlds premier trading nations,


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the country recently signed a free trade agreement with the European Union (KEI,

2010). South Korea is attractive place for entertainment industries due to the

existence of higher-level quality of live. However, rigidity of the labor market and

lingering corruption continue to hold back overall economic freedom (The World

Bank, 2011).

BRAZIL

Brazils economic freedom score is 56.3, making its economy the 113th freest in the

world (Heritage Foundation, 2011). Brazil is ranked 21st out of 29 countries in the

South and Central America/Caribbean region, and its overall score is below the

regional and world averages. Inflation rate is higher than South Korea, which is

stable at 4.9% for past two year (Central Intelligence Agency, 2011). Unemployment

rate is 7% and income per person is US $ 10.800. Overall quality of live is

significantly lower than South Korea. The Brazilian economy has been expanding

with the help of booming commodity exports. Over the past decade, economic

growth has averaged around 4 percent, accompanied generally by low inflation

(Ragir, 2011). Brazil has a large agricultural and industrial base, but a growing

services sector has accounted for over 60 percent of GDP in recent years (Central

Intelligence Agency, 2011). The global financial and economic turmoils impact has

been moderate.

The states role in the economy has been heavy and even increasing. However, the

efficiency and overall quality of government services remain poor despite high

government spending as a percentage of GDP (FIAS, 2001). Barriers to

entrepreneurial activity include burdensome taxes, inefficient regulation, poor access

to long-term financing, and a rigid labor market (IFC, 2011). The judicial system

remains vulnerable to political influence (possible high corruption).


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TOURISM ECONOMY

Tourism Economy Indicator - 2010 est.

Percent ofTotal

Annual growth(% Forecast)

Travel and Tourism industry

Korea Brazil Korea Brazil Korea Brazil


258 2.0 4.6


6 3.2 2.7



1,464 11.5 4.5

Employment 1000 jobs 1,910 8.1 1.5

25 13.4 2.9

Source; Above this data are acquire from The Travel and Tourism Competitiveness Report 2011,http://www.weforum.org/issues/travel-and-tourism-competitiveness

SOUTH KOREA

South Korea travel and tourism economy alone contribute 79,795 million to its GDP.

According to travel and tourism competitiveness report 2011, South Korea rank 15 th

out of 50

countries for the premium international arrivals (World Economic Forum,2011). Annual forecast growth is expected to 4.6% for up coming year because of

the aggressive promotion on medical tourism. South Korea is emerging as a popular

destination for medical tourism especially among the tourists from the US, Japan and

China, says a new research report Emerging Medical Tourism in South Korea by

RNCOS. In 2008, the country received around 25,000 foreign medical tourists, an

impressive increase of more than 56% from year 2007 (RNCOS, 2010). It is

expected that the medical tourist arrivals in South Korea will grow at a CAGR of

around 42% during 2011 to 2012. Medical tourists prefer South Korea not just for the
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lower costs of treatment, but also for its advanced technology and better healthcare

infrastructure.

BRAZIL

Compare to South Korea, Brazil tourism economy is the significantly smaller.

However, 2014 FIFA World Cup is set to be a huge draw for visitors and the addition

of the 2016 Olympics in Rio de Janeiro will further boost the industry (Exact Invest,

2010). In January 2010, the government said it would invest 1 million Brazilian reals

to improve facilities throughout the country before of the World Cup. Inboundvisitor numbers had been growing but the industry could benefit from greater stability.

While arrivals rose from 4.7 million in 2001 to 7.2 million (about a 65% increase) in

2008, the report estimates a fall in that number in 2009 because of the impact on

developed countries of the global financial crisis (Exact Invest, 2010). The recovery

should be relatively quick, with a forecasted increase of tourist arrivals of 9.2 million

by 2014. The number of Brazilians looking to travel within their own country and that

can afford to do so is growing. According to Instituto Brasileiro de Turismo

(Embratur) president Jeanine Pires, the revenue generated by tourism in 2008 was

nearly 17% higher than in 2007, which was the best year on record (Exact Invest,

2010). Sector growth appears to be building up momentum as the globaleconomy recovers. Renovations are a positive area for investment in Brazils tourism

infrastructure. A lack of infrastructure has held the sector back to date but this looks

set to change as investment increases over the coming years.


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SOCIAL ENVIRONMENT

Social Environment analysis will briefly discuss about each country demographic,

consumer behavior, trends and culture. Culture is the main factors for behavioral

practice affecting on business. Depending on the culture different, consumer

behavior and lifestyle trends are different in each country (D. Daniels et al., 2011).

ETHIC GROUPS AND EDUCATION

SOUTH KOREA

Demographic (2011/2010 est.)

Indicator

Population 48.7 million (2011 est.)

Urban Population 83%

Urbanization Rate per annual 0.6%

Ethic Groups Homogeneous

Religions

Christian 26.3%

Buddhist 23.2%

None 49.3%

Literacy 97.9%

Male 99.2%

Female 96.6%

Sources; Above data are acquire from The World Factbook;https://www.cia.gov/library/publications/the-

world-factbook/

It is important to understand the national ethic groups in order to identify the

requirement of countrys social environment. Nature of Universal Studio Themes

Parks business model require higher living standard. Literacy rate is one of the
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factors that contribute to living standard. The higher the literacy rate, the higher the

living standard will be (D. Daniels et al., 2011). The Ethic groups of South Korea are

homogeneous where culture and language areconcerned except for about 20,000Chinese. All South Koreans speak the same language and share a common

culturalheritage (CIA, 2010). Literacy rate of the South Korea is 97.9%, which isrelatively higher than Brazil. Education is highly regarded by the South Korean

government and supported by the parents. According to the CIA World Fact Book, in

2010 South Koreans attended school on average for 17 years. The average for

males is 18 years, while for females is 15 years. English is widely taught in junior and

high school.

BRAZIL

Demographic (2011/2010 est.)

Indicator

Population 203.4 million (2011 est.)

Urban Population 87%

Urbanization Rate per annual 1.1%

Ethic Groups 2000 Census

White 53.7%

Mulatto (mixed White and Black) 38.5%

Black 6.2%

Others 0.9%

Unspecified 0.2%

None 7.4%

Religions

Roman Catholic 73.6%

Protestant 15.4%

Spiritualist 1.3%

Bantu/Voodoo 0.3%

Others 1.8%

Unspecified 0.2%

None 7.4%


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Literacy 88.6%

Male 88.4%

Female 88.8%

Sources; Above data are acquire from The World Factbook;https://www.cia.gov/library/publications/the-world-factbook/

Due to the ethnic diversity, need, wants and consumer preferences may vary across

country. It is important to understand those peculiarities in order to better identify

niche markets and target consumer groups. Races and ethnicities vary across Brazil.

Most Brazilians are descendants of colonial settlers, with strong Portuguese paternal

ancestry. In the late nineteenth and early twentieth centuries, after numerous

multiracial marriages between settlers, native Indians, Spanish, Italian, German,

Japanese and Black Africans, the Brazilian population developed unique

characteristics (Instituto Brasileiro de Geografia e Estatsticas, 2007).

The Southeastern area, which includes highly populated cities such as Sao Paulo

and Rio de Janeiro, concentrates people with European, Black African and native

Indian backgrounds. In 2011, the population of Brazil was composed of 53.7%

whites, 6.2%% Black Africans, 38.5% Mulatto, and 0.9% others (Central Intelligence

Agency, 2011).

From a sociological standpoint, ethnicity plays an important role in influencing

consumers expenditure and spending pattern. Historically, the spending pattern in

Brazil developed through the influence of colonial settlers and has undergone

transformations as the different ethnicities commingled. Due to the diverse cultural

and ethnic backgrounds, Brazilians have an innovative and inquisitive attitude toward

new products and services. Brazilians are open to try both new products and

services (Instituto Brasileiro de Geografia e Estatsticas, 2007).

Brazilians are becoming more educated, which have an impact spending patterns.

Higher education is usually associated with the higher income. Instituto Brasileiro de

Geografia e Estatsticas (2006-2007) indicate that the level of education has

increased overall in Brazil and that the literacy rate increased 0.4% between 2006

and 2007. Current literacy rate is 88.6% with the average of male 88.4 % while

female is 88.8% (Central Intelligence Agency, 2011). Female have higher levels of

education, especially those residing in urban areas (Instituto Brasileiro de Geografia
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e Estatsticas, 2007). Ernst & Young forecasts that by 2030 the level of education of

the Brazilian workforce will increase by 30%, going from 7.8 years to 11.3 years of

schooling.

HOUSEHOLDS

SOUTH KOREA

Statistics Korea (2009) indicates that while the number of ordinary households1 hasincreased from 6.6 million in 1975 to 14.3 million in 2000 and 15.9 million in 2005,

the average number of household members has decreased from 5.0 in 1975 to 4.5 in

1980, 3.1 in 2000 and 2.9 in 2005. This is expected to further decrease to 2.7

persons by 2020. The number of households with less than 3 persons will increase,

while those with more than 4 will decrease.The biggest change is expected to see inthe number of one-person households, which are forecast, to account for one out of

every five households in 2015 (Park, Kim and Ko, 2002). Two-generation households

still remain the most common type. One-generation or one-person households are

rapidly increasing, while the number of three-generation households is declining

steadily. Euro-monitor International attributes some of this change to higher divorce

rates. Its data indicates that the number of divorced persons increased by almost

59% between 2000 and 2007 (Euro-monitor, January 2009).The changes in household structure are also affected by a trend towards later

marriage. South Koreans are waiting longer to marry for the first time the average

age of women was 27.9 years in 2007 increasing from 25.4 years in 1995, while men

were 30.7 years of age in 2007 up from 28.4 years in 1995 (Euromonitor, January

2009).


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72,000 Won per annual, most of the South Korean spend more on entertainment

industries because of their stress related issue. Moreover, Referring to 2004/2005

Global Retail & Consumer Study from Beijing to Budapest, Continuous

westernization of South Korea lead to increased interest in fashion, well-being,

shopping, time for and expenditure on leisure actives. Therefore, it is not surprising

that for 52% of South Koreans, theme parks are viewed as a major considerationintheir choice of destination for their leisure time (Datamonitor, September 2009).

BRAZIL

2010 estimated GDP per capita for Brazil is $10,800. Income per capita in Brazil has

increased during the past years and is expected to continue to grow in the medium

term, as a result of the expected economic growth (Central Intelligence Agency,

2011). GDP per capita varies by regional. Some of the researcher suggest that

purchasing power of Brazil will also grow as a consequenceof the decrease in theinterest rates and of credit expansion (World Economic Forum, 2011).

According to research conducted by Instituto Target/FGV (2009), in the next 5 years

the Brazilian s to grow its share in the consumer market by 5.6 points, from 60.8% -

66.4% of the total consumption. For this research, middle class is defined as having

household/family income between BRL 2,230 and BRL 3,750 per month, in addition

to other characteristics such as level of education, consumption pattern, occupation,

etc. The number of urban households among middle class is expected to increase by

7.9% over 2012. Except from 87% of the Brazilians live in urban areas, this apparent

uniformity does not reflect homogenous consumption habits.

Population below poverty line in 2008 is 26%, which is relatively higher than South

Korea. Moreover, gap between income and consumption by percentage his high,

which is 1.1% lowest and highest 4.3% (Central Intelligence Agency, 2011). Those

facts reflect the inequality between populations. As for large country, income

distribution also varies depend on different regional setting. As stated above, a result

of a historical inequality in income distribution, different classes of consumers are

encountered in the Brazilian consumer market, as for instance, the typical basic

needs patterns in lower income classes, where household spending is higher on food


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and beverage items, or the ascendant middle class pattern that normally shows an

increase in the participation of expenditure in transport and communications. Upper

classes reveal an increase in the share of goods and services, like durable goods,

leisure activities, education and healthcare, and expenditure with luxury items (K.

Miller, 2009).

The entertainment industries currently target each of these groups in the Brazilian

consumer market, as long as they are sizeable and have a significant consumption

potential likely to grow both in volume and value (A. hudson, 2009).

Consumer behaviors are unstable due to the technology shock. Rapid changes in

technology and culture such as globalization, communication and Internet have

unstable impact in consumer habits. In Brazil, trends connected with the principles of

quality of life, convenience, price-consciousness, brand loyalty and others are very

present in the market (Developers Diversified Realty, 2010).

In fact, many companies in Brazil already provide products and services that meet

the consumer needs derived from those trends. For instance, Nestl has announced

another new unit in the North of the country, for the demand of the lower income

(C/D/E) classes, which will probably include the development of new products to

meet their specific needs (K. Miller, 2009). Shopping is definitely integrated into the

lifestyle of the Brazilian urban population, as a usual and necessary activity and as

an entertainment programmed. Shopping malls, outlets, hypermarkets, supermarkets

and convenience stores have been designed to fit the profile of the relevant customer

(Developers Diversified Realty, 2010). Regardless of whether the consumers profile

is of high or low consumption, quality-service or price-oriented, or attracted to

branded or private labels, in most developed cities it is possible to find places that

best meet these characteristics. Many of these places are designed to offer a wide

range of services (for example, restaurants, coffee shops, fitness centers, beauty

parlors, shoe repairs, post offices, bank services and dry-cleaners among others)

and to provide some entertainment with cinemas, cyber-cafs and play areas for

children.

The Brazilian consumers distinguish products by the brand, associating them with

concepts of high quality, trust, loyalty and status (Developers Diversified Realty,

2010). The Brazilian consumer market has plenty of examples of local or


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international brands that have historically maintained a significant market-share.

Despite the fact that Brazilian consumers recognize distinct brands, they are

influenced by those brands in their purchasing decisions, and eventually contribute

as opinion makers to attract new consumers to the brands, it is important to point out

that there has been a real increase of price-conscious customers in Brazil. Most of

the entertainment industries, such as cinema and resort have been decisive in

stimulating this consumer behavior, through an aggressive implementation of

discount format and by expanding the portfolio of private label products and services.


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CHOICE OF COUNTRY

Country Competitiveness Score


Global Ranking (out of 139) 58 22

Global Competitiveness Index 5

Basic Requirements 4.3 5.4

1stpillar: Institutions 3.6 4.0

2nd Pillar: Infrastructure 4.0 5.6

3rd Pillar: Macroeconomic Environment 4.0 5.8

4th Pillar: Health and Primary Education 5.5 6.3

Efficiency Enhancers 4.4 4.8

5th Pillar: Higher education and training 4.3 5.4

6th Pillar: Goods market efficiency 3.7 4.5

7th Pillar: labor market efficiency 4.1 4.3

8th Pillar: Financial Market development 4.4 4.0

9th Pillar: Technological readiness 3.9 5.0

10th Pillar: Market Size 5.6 5.6

Innovation and Sophistication factors 4.0 4.8

11th Pillar: Business sophistication 4.5 4.8

12th Pillar: Innovation 3.5 4.8

Sources; Above data are acquire from The World Economic Form; Global Competitiveness Report

(2010-2011,).

Note; Score are arrange form 1 to 7, the higher the number is the higher the rank will be.


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The most problematic factors for doing business in Brazil


Tax regulations 19.3 8.1

Tax Rate 17.7 3.9

Inadequate supply of infrastructure 13.8 5.5

Restrictive labor regulation 12.9 12.7

Inefficient government bureaucracy 11.3 15.3

Corruption 6.9 5.9

Access to financing 5.6 15.3

Inadequately educated workforce 5.1 7.7

Crime and theft 2.2 0.3

Foreign currency regulations 1.7 2.4

Policy instability 1.7 15.2

Poor public health 0.8 0.2

Inflation 0.5 3.7

Poor work ethic in national labor force 0.5 2.4

Government instability 0.2 1.5

Sources; Above data are acquire from The World Economic Form; Global Competitiveness Report

(2010-2011,).Note; Higher score is most problematic

Remark; According to world economic form, above15 factors conducted based on domestic population.

Therefore domestic population based factors may varies from global prospective.


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Country competitiveness Charts The most problematic factors

It is obvious that South Korea have the higher global ranking comparing to Brazil.

However, global ranking alone cannot determine the country potential for the

Universal Studio business. It is necessary to determine the future potential and some

certain aspects that related to the companies business. After the analysis, it was find

out that both countries have their own weakness and strength for business. In case

of tax regulations and tax rate, South Korea is much more attractive and flexible than

Brazil. Restrictive on labor regulation is almost the same for both countries.

According to global competitiveness report 2011, Brazil has more efficient

government bureaucracy than South Korea (World Economic Forum, 2011).

0 5 10 15 20 25

Tax regulations

Tax Rate

Inadequate supply of infrastructure

Restrictive labor regulation

Inefficient government bureaucracy

Corruption

Access to financing

Inadequately educated workforce

Crime and theft

Foreign currency regulations

Policy instability

Poor public health

Inflation

Poor work ethic in national labor force

Government instabilityKorea

Brazil


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Moreover, South Korea has a little troublesome foreign currency regulation than

Brazil. In term of policy stability, Brazil is a winner however South Korea has more

government stability and low corruption compare to Brazil.

Upcoming FIFA and Olympic is the great opportunity to introduce Universal ThemePark and Resort in Brazil. However, weak government support on tourism industries

and burdensome rules and regulations are the problematic factors to do business in

Brazil. Compare to Brazil, South Korea have less opportunity. Strong government

support on medical tourism, flexible rule and regulations are the attractiveness

factors to do business in South Korea.

Strength and Weakness of Brazil and South Korea

Brazil South Korea

Strength

Efficient Government Bureaucracy

WeaknessForeign Currency Regulation

Policy Stability

Weakness

Tax Regulation

StrengthTax Rate

Corruption

Government Stability

Moreover, South Korea is the attractive place to invest from country economic point

of view. Unlike Brazil that has the double unemployment rate (7%), South Korea

unemployment rate is only 3.3%. According to D. Daniels et al., 2011, unemployment

account in major factors that depress the economic growth. Although unemployment

factors alone cannot project the countrys economic growth, it possible to consider asthe fraction of countrys insurance for business in economic environment while

comparing between two countries. In overall quality of life, living standard and

tourism economy, South Korea showed the better result than Brazil. South Korea

economy future potential is the medical tourism.

Although Brazil shows the significant lower result, it has the ongoing potential as an

emerging market and one of the BRIC countries. Unemployment rate is significantly

higher than South Korea. However, another factors to consider are the size of the


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countrys population while comparing unemployment rate. The total population size

of Brazil is three times bigger than South Korea. As for large and spawning

population rate, unemployment rate 7% is acceptable. Unlike South Korea which

majority of service sectors is matured, Brazil service industries are still growing and

less competitive. Brazil is the more suitable for the organization that can withstand

first mover disadvantages.

As stated in the previous section, nature of universal business require higher social

environment. In general, it is possible to assume that higher density of population

refer to larger market size. However, some other factors need to be considering,

such as poverty rate, inequality, income distribution, tourism economy and national

economy. As a large country, Brazil has the obvious advantages on population on

South Korea. However, the gap between social standard is high and so do in income

distribution. According to research conducted by Instituto Target/FGV (2009), higher

income level family only represent 47.6% of Brazil population. Therefore, the volume

of Brazil consumer halved to half of its total population. Unlike Brazil, South Korea

has advantages in lower inequality, well-distributed income and higher living

standard compare to Brazil. Although the countrys population is lower than Brazil,

South Korea has significant potential in both consumer value and volume.

Another factors need to be considering is the future potential of inflow and out flowof tourism economy. Both countries have the future potential in tourism economy.

The only different between two countries is stable and dramatic tourism. Brazil

tourism will have dramatic tourism due to up coming Olympic and FIFA events.

However, tourism economy may unstable due to the result of after effect. For

example, one country has to push forward not only their infrastructure but also the

social standard if there is up coming dramatic changes. Especially while

consideration tourism economy, rapid change of government rules, regulation and its

policy. After the dramatic change, country will have to face adjustment periods orexhausted stage. Dramatic investment in country infrastructure and social standard

may have negative effect on national savings and countrys debts. Moreover,

inequality and income distribution may disturb by regional setting. During exhausted

stage, citizens spending pattern may change or disposal income may decline. Unlike

Brazil, South Korea is likely to have the steady growth in tourism economy because

of the nature of medical tourism.

Above of all reasons, South Korea should be the choice of the country for UniversalStudio.


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ENTRY STRATEGY

ENTRY MODE

Entry method into the South Korea should consider joint venture in order to

overcomes the ownership restrictions and cultural distances. Although South Korea

consumers are homogeneous, Datamonitor Consumer Surveys (April/May, 2009)

stated that most of the consumers in consumer are favorable to local brand. It is the

great risk for a company to use the direct investment methods. By adopting the Joint

Venture methods, company will benefit from the certain advantages such as less

investment, potential for learning about domestic market, reduce political risk andviewed as insider. Although, Knowledge spillovers, manage and control difficulty are

disadvantages for the company, the benefit of the advantages outweigh the

disadvantages.

DEALING WITH CONSUMER DIVERGENCE

As for a local brand oriented country, consumer preferences, culture, consumptionpattern may vary from Universal Theme Park business model. Current popular figure

of the Universal Studio theme park is Harry Porter however, adopting its as the figure

for theme park model might result as the Euro Walt Disney. Korea entertainment

industry becomes widely popular in Asia especially in movie and music production.

Integration Universal film production with local entertainment industry may necessary

for future potential of all the theme park in Asia.


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ANSOFF MATRIX STRATEGY

Ansoff Matrix Strategy enables four options for Universal Studio while company

seeks for increasing sales and creating growth at Korea (Ansoff, 1957). The four

options are market penetration, product development, market development anddiversification. As for Universal Company, it will be suitable to adopt market

penetration and diversification strategy. Market penetration strategy is suitable to use

when product or services and its market already exists. Diversification strategy

stands apart from the other three strategies. The first three strategies are usually

pursued with the same technical, financial, and merchandising resources used for

the original product line, whereas diversification usually requires a company to

acquire new skills, new techniques and new facilities. As mention in suppressing

consumer divergence, it is necessary for a company to develop new figure for

Universal Studio Theme Park.

NewExisting

New

Marketpenetration

ProductDevelopment

MarketDevelopment

Diversification

Existing

Market

Products/Services

New


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MARKET PENETRATION

Among the four options, Universal Studio intends to enter into new markets, which is

South Korea, by using penetration strategy. Company will need to create new value

to the competition to increase sales and capture new market shares in Brazil (Kotler,et.al. 2009; Richards & Media, 2011). The penetration strategy will allow the

company to attract customers from the new market as well as help the company to

reduce or eliminate risk to internationalize its business (Ansoff, 1957). The main

reason of conducting this strategy is to secure its target market for Universal Studio.

However, the company cannot only rely on this strategy for its sustainable growth.

DIVERSIFICATION

Diversification is a form of corporate strategy for a company. It seeks to increase

profitability through greater sales volume obtained from new products and new

markets (Ansoff, 1957). Under diversification, there are different types of strategies

such as concentric diversification, horizontal diversification etc. Horizontal

diversification is suitable Universal Studio. Horizontal diversification is mainly use

when company adds new products or services that are often technologically or

commercially unrelated to current products but that may appeal to current customers.

In a competitive environment, this form of diversification is desirable if the present

customers are loyal to the current products and if the new products have a good

quality and are well promoted and priced. Moreover, the new products are marketed

to the same economic environment as the existing products, which may lead to

rigidity and instability. In other words, this strategy tends to increase the firm's

dependence on certain market segments. For example, Universal Studio may add

the new figure from Korea cultural Aspect instead of using only on its original figure.

However, adopting diversification strategy may require the attractiveness test and the

cost-entry test


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CONCLUSION

Attractive country for Universal Studio has a choice of expanding into Brazil and

South Korea. Both countries have certain weakness and strength. The

characteristics of Brazil are that they record extraordinary economic growth and that

they have high potential to become the next global economic leaders. However,

unique requirement of business model match in South Korea rather than Brazil. For

example, requirement of social standard, disposal income, etc. Thus, it is very

important for Universal Studio to gain a foothold in markets and for future sustainable

growth. Upon tourism analysis, it was found that South Korea have is a more stable

tourism economy for investment in the long term. Certain factors such as policy

instability and inefficient government bureaucracy are most problematic factors to

start the business in South Korea. Those factors may result in delay of construction,

difficulty in acquisition of land, delay of approval from government bureaucracy while

starting the business. However, it is safe to assume that certain advantages such as

tax rate, tax regulations and access to financing outweigh its advantages. With South

Korea chosen as the destination, the entry method will be via joint venture with a

local partner. Furthermore, market penetration strategy will be initially adopted,

followed by diversification strategy.


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BIBLIOGRAPHY AND REFERENCES

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Xinhua, 2009. S Korea seeks tax increase in 2011-2013. [Online] Available at:

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A. hudson, R., 2009. Brazil. [Online] United State Available at:http://countrystudies.us/brazil/19.htm[Accessed 10 June 2011].

Ansoff, H.I (1957), Ansoff Matrix, Harvard Business Review, pp 1-4.

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