your firm is a large conglomerate

8/7/2019 Your firm is a large conglomerate

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GLOBAL BUSINESS MANAGEMENT

ASSIGNMENT

SUBMITTED TO:Ms. Snigdha Malhotra

SUBMITTED BY:NIPUN CHAWLA

AMITY INTERNATIONAL BUSINESS SCHOOL

Countries major export and import data


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INDIA

Of the $10.1 billion in American exports to India, the following product

categories had the highest values.

Civilian aircraft US$1.4 billion (14.1% of India from U.S. imports,

up 169.6% from 2005)

Diamonds $621.2 million (6.2%, up 33%)

Chemical fertilizers $608 million (6.0%, up 25.5%)

Telecommunications equipment $486 million (4.8%, up 4.9%)

Organic chemicals $410.4 million (4.1%, up 10.5%)

Other petroleum products $336.8 million (3.3%, up 55.7%)

Computer accessories $311 million (3.1%, up 19%)

Jewellery $285.5 million (2.8%, up 31.5%)

Medicinal equipment $259.4 million (2.6%, up 17.3%)

Industrial machines $251.1 million (2.5%, up 21.5%)

Fastest-Growing Indian Imports from U.S.

Below are American exports to India in 2006 with the highest

percentage sales increases from 2005.

Military vehicles US$11.6 million (up 232,000% from 2005)

Military clothing & footwear $30.1 million (up 68,000%)


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Collectibles (e.g. artwork, antiques, stamps) $43.2 million (up

513.5%)

Engines for military aircraft $13.1 million (up 281.9%)

Civilian aircraft $1.4 billion (up 169.6%).

RUSSIA'

SIMPO

RTS FROM

U.S.Of the $10.1 billion in American exports to Russia, the following product


Meat incl. poultry US$636.7 million (13.5% of Russia from U.S. imports, down

15% from 2005)


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Passenger cars $399.3 million (8.5%, up 25.1%)

Civilian aircraft $384.3 million (8.1%, up 222.6%)

Oil field drilling equipment $319.6 million (6.8%, up 2.3%)

Excavating machinery $170.7 million (3.6%, down 5.1%)

Computer accessories $155.1 million (3.3%, up 9.9%)

Agricultural machinery $148.1 million (3.1%, up 1.8%)

Service industry machinery $125.2 million (2.7%, up 48.8%)

Trucks, buses & special purpose vehicles $117 million (2.5%, up 48%)

Materials handling equipment $98.6 million (2.1%, up 96.5%)

Fastest-Growing Russian Imports from U.S.

Below are American exports to Russia in 2006 with the highest percentage sales

increases from 2005.

Iron & steel products US$2.9 million (up 482% from 2005)

Railway transportation equipment $18.7 million (up 598%)

Engines & parts $70.1 million (up 322%)

Coal $3.8 million (up 1227%)

Civilian aircraft $384.3 million (up 223%)

Synthetic rubber $3 million (up 217%)


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UAE

Of American exports to The UAE, the following product categories had

the highest values.

1.Civilian aircraft US$2.9 billion (24.8% of UAE imports fromAmerica, down 32.1% from 2006)

2.New and used passenger cars 1.4 billion (11.6%, up 59.4%)3.Drilling and oilfield equipment $569 million (5.5%, up 21.4%)4.Non-monetary gold $431.5 million (3.7%, up 114.5%)


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5.Telecommunications equipment $431.2 million (3.7%, up156.2%)

6.Other industrial machines $351.6 million (3%, up 60.2%)7.Industrial engines $262 million (2.3%, up 37.8%)8.Parts for military-type goods $241.3 million (2.1%, up 97.3%)9.Gem diamonds $227.3 million (2%, down 1.6%)10. Excavating machinery $211.9 million (1.8%, up 68.6%).

BRAZIL

Of the $19.2 billion in American exports to Brazil, the following product


Computer accessories, peripherals and parts US$1.7 billion (8.9% ofBrazil from U.S. imports, up 29.5% from 2005)

Civilian aircraft parts $1.19 billion (6.2%, up 39.7%)

Civilian aircraft engines $1.18 billion (6.2%, up 1.9%)

Organic chemicals . $1.14 billion (5.9%, up 17.2%)

Fully built civilian aircraft $1.06 billion (5.5%, up 716%)


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Oil field drilling equipment $894.5 million (4.7%, up 146.8%)

Plastics $757.7 million (3.9%, up 19.1%)

Semi-conductors $693.6 million (3.6%, up 0.1%)

Chemical fertilizers $571.3 million (3.0%, up 4.5%)

Pharmaceutical preparations $566.2 million (2.9%, up 20.5%)

Fastest-Growing Brazilian Imports from U.S.

Below are American exports to Brazil with the highest percentage sales

increases.

Fully built civilian aircraft $1.06 billion (5.5%, up 716% from 2005)

Raw cotton $67.0 million (up 277%)

Bodies & chassis for passenger cars $4.1 million (up 264%)

Oil field drilling equipment $894.5 million (up 147%)

Fuel oil $119.2 million (up 131%)

Copper $9.2 million (up 101%).

CHINA

Of the $55.2 billion in American exports to China in 2006, the following

product categories had the highest values.

Read on

China's Imports & Exports Slow in 2008


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US Trade with China in 2007

Cuban Trade Deficit Improves

Semi-conductors US$5.9 billion (10.6% of China from U.S. imports, up74.7% from 2005)

Civilian aircraft $5.3 billion (9.6%, up 39.7%)

Soybeans $2.5 billion (4.6%, up 12.5%)

Plastics . $2.2 billion (3.9%, up 18.8%)

Raw cotton $2.1 billion (3.7%, up 47%)

Industrial machines $1.97 billion (3.6%, up 29%)

Copper $1.86 billion (3.4%, up 99.7%)

Computer accessories $1.82 billion (3.3%, up 27.5%)

Aluminum $1.7 billion (3.1%, up 90.3%)

Steelmaking material $1.69 billion (3.1%, up 11.9%)

Fastest-Growing Chinese Imports from U.S.

Below are American exports to China in 2006 with the highest

percentage sales increases from 2005.

Unmanufactured tobacco US$61.4 million (up 3127% from 2005)

Corn $22.6 million (up 2963%)

Oilseeds & food oils $60.7 million (up 970%)


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Precious metals $305 million (up 205.2%)

Railway transportation equipment $220 million (up 146%)

Entry should relate to organizations corporate strategy and extent,

depth, and geographical coverage of its present and intended foreign

operations.

a)How quickly the firm wishes to commence operations in themarket.

b)Volatility of competition in countries.


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c)The firm experience and expertise in selling and operating abroad.d)Sizes of the margins taken by intermediaries in particular nations.e)Tariffs levels, quotas, and other non tariff barrier to market entry.f) The business financial resources and hence its capacity to

purchase.

g)Political stability of foreign countries the firm wishes to enter.h)Ease of communication with intermediaries in specific countries.i) The degree of market penetration desired.

Uae

The UAE has an open economy with one of the highest per capita

incomes in the world and a sizable annual trade surplus.

In 2009, its GDP, as measured by purchasing power parity, stood at

US$400.4 billion.


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UAE's economy, particularly that of Dubai, was badly hit by the financial

crisis of 20072010. In 2009, the country's economy shrank by 4.00

percent, but UAE's overseas investments are expected to support its

full economic recovery.

Petroleum and natural gas exports play an important role in the

economy, especially in Abu Dhabi. More than 85% of the UAE's

economy was based on the exports of natural resources in 2009.

A massive construction boom, an expanding manufacturing base, and a

thriving services sector are helping the UAE diversify its economy.Nationwide, there is currently $350 billion worth of active construction

projects.

Aluminum, steel, iron and other forms of metal exports along with

textile produce much a significant amount of income and are expected

to surpass the income brought in by petroleum and natural gas exports

within the next 40 to 60 years.

Government projects include the Burj Khalifa, which is the world's

tallest building, Dubai World Central International Airport which, when

completed, will be the most expensive airport ever built, and the three

Palm Islands, the largest artificial islands in the world.

Other projects include the Dubai Mall which is the world's largest

shopping mall, and a man-made archipelago called The World which

seeks to increase Dubai's rapidly growing tourism industry.

Also in the entertainment sector is the construction of Dubailand,

which is expected to be twice the size of Disney World, and of Dubai

Sports City which will not only provide homes for local sports teams but

may be part of future Olympic bids.


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Major increases in imports occurred in manufactured goods,

machinery, and transportation equipment, which together accounted

for 80% of total imports. Another important foreign exchange earner,

the Abu Dhabi Investment Authority - which controls the investments

of Abu Dhabi, the wealthiest emirate - manages an estimated $360

billion in overseas investments & an estimated $900 billion in assets.

More than 200 factories operate at the Jebel Ali complex in Dubai,

which includes a deep-water port and a free trade zone for

manufacturing and distribution in which all goods for re-export or

transshipment enjoy a 100% duty exemption. A major power plant with

associated water desalination units, an aluminium smelter, and a steel

fabrication unit are prominent facilities in the complex. The complex iscurrently undergoing expansion, with sections of land set aside for

different sectors of industry. A large international passenger and cargo

airport, Dubai World Central International Airport, with associated

logistics, manufacturing and hospitality industries, is also planned here.

Russia

Franchising in Russia

The spending patterns of consumers in Russia are rapidly starting to

resemble those of other European cities, and thus are creating demand

for recognized brands and high quality services. In order to meet the

expectations of their clients and gain a competitive advantage, more

and more Russian private enterprises and entrepreneurs are seeking


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partnerships with well-recognized Western companies, including

franchisors.

During its 12-year history in Russia, the franchising sector has

developed mainly in customer oriented segments, such as fast food and

restaurants, education and training, fitness and health care, recreation

and entertainment, travel and lodging, automotive and retail.

Franchising in business-oriented services is also gaining momentum.

Good examples of the B2B segments where franchise models work

successfully are cleaning services and maintenance, transportation,

logistics, express mail services, management training, and consulting.

Import Market for Franchise Concepts

Franchising as a business model first came to Russia in the early 1990s,

when it was introduced by foreign franchisors. Among the franchise

pioneers were such well-known American brands as Pizza Hut, KFC,

Subway, and Alphagraphics. The second wave of market entries came

at the beginning of the new millennium, when economic reforms

initiated by a new government led to gradual improvement of the

business environment and Russia joined the list of the world's fast-

growing economies. According to data from Newbridge Group, out of

165 franchise concepts currently present in the market, 68 percent

were established domestically, 20 percent were brought to Russia by

European franchisors, and 12 percent are American franchise concepts.

The most visible U.S. franchise concepts present in the market today

include: AlphaGraphics, Baskin Robbins, Broaster Company, Carl's Jr.,

Crestcom, Chem-Dry, Chips-Away, Days Inn, FasTracKids, Gold's Gym,Jani-King, KFC, LMI, Mail Boxes Etc., Office 1 Superstore, Papa John's,

Pizza Hut, Sbarro, and Subway. Among these should also be included

Broadway Pizza, Chicago Design, Kroshka-Kartoshka, New York Pizza,

Pasta Lavista, and Star Galaxy, which are all franchise concepts


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established and developed in Russia by (or with participation of capital

of) U.S. companies or entrepreneurs.

McDonald's, which now has 137 restaurants in 17 Russian cities and is

one of the most recognized brand names in Russia, was among the firstto enter the market in the early 1990s. The brand successfully grew to

become the country's largest network of non-domestic, fast-food

restaurants. However, Despite the direct association of its brand name

with franchising, McDonald's has been growing in Russia so far only by

opening corporate-owned restaurants and has not sold a single

franchise license.

Market Entry

The majority of U.S. franchisors that enter the Russian market prefer to

establish master franchise partnerships with partners based in two

main cities - Moscow or St. Petersburg. However, markets in Moscow

and St. Petersburg no longer represent an easy opportunity for quick

entry due to high costs and increased competition. There are a number

of challenges that U.S. franchisors should be aware of, such as access to

good locations, increasing competition from local and international

service providers, necessity of aggressive promotional campaign, and

significant expenditures on marketing. Another important factor that

may affect new market entries into the Moscow market is the

possibility of conflicts of interest with the Moscow Government. The

Moscow City Government and other senior officials from local

administrations may be directly or indirectly involved in commercial

projects in consumer-oriented sectors.

The regional cities that are commonly ignored by foreign franchisors

may represent significant business opportunities. Several regional cities

have populations exceeding one million people. These metro areas

have educated workforces, entrepreneurs with excellent experience,

good relationships with local administrations, and access to fine


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locations. The demand for well-known brands and high-quality services

in the regions is very strong.

U.S. franchisors may utilize a number of instruments in their efforts to

establish their presence in the Russian market. The U.S CommercialService offices in Moscow, St. Petersburg and Vladivostok can assist

U.S. franchisors with successful market entry by providing professional

market research and customized contact facilitation services. In

addition, the U.S. Commercial Service in Russia organizes U.S. franchise

outreach programs to different parts of Russia and helps U.S.

franchisors and U.S. franchise holders in Russia establish direct contacts

with local authorities and business associations, as well as to meet with

qualified potential partners. In addition, BISNIS representatives inRussia's regions (Samara, Nizhny Novgorod, Novosibirsk, Tomsk,

Khabarovsk, and Sakhalin Island) can provide information and support

to U.S. companies interested in exploring these areas.

The annual BuyBrand International Franchise Exhibition, which is held

in Moscow in the fall, is an excellent way to make contacts and become

acquainted with the market. An inexpensive way to participate in the

show is to join the U.S. Commercial Service (CS) Moscow exhibitionbooth where Commercial Specialists showcase catalogues of U.S.

franchisors, collect contact information from the visitors who express

interest in specific U.S. franchise concepts, and forward the contact lists

to the U.S. participants.

U.S. franchisors planning to exhibit at the International Franchise Show

2006, which will be held in Washington, D.C., on June 2-4, 2006, may

want to inform the CS Moscow about their interest in Russia. CSMoscow plans to accompany an official Russian delegation to IFE 2006

and will facilitate business meetings and help with follow up.


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U.S. franchisors may also work with professional business consulting

companies and brokers who help U.S. companies find business partners

and successfully enter the Russian market.

Brazil

Brazil is the fifth largest country in the world with a total area of 8.5

million square kilometers, covering approximately half of South

America. Distances are continental: 4,420 kilometers from north to

south, 4,328 kilometers from east to west, an Atlantic coastline of 7,367

kilometers and a total border of 23,102 kilometers. It neighbors everycountry in South America except Chile and Ecuador.

The country is divided into five regions:

North - comprised mostly of the Amazon Basin; also consists of the

states of Acre, Amazonas, Roraima, Rondnia, Par, Amap and

Tocantins.

Northeast comprised of the states of Maranho, Piau, Cear, Rio

Grande do Norte, Paraba, Pernambuco, Alagoas, Sergipe and Bahia.

Central West comprised of the states of Mato Grosso, Mato Grosso

do Sul, Gois and the Federal District.


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Southeast comprised of the states of Minas Gerais, Esprito

Santo, Rio de Janeiro and So Paulo.

South comprised of the states ofParan, Santa Catarina and RioGrande do Sul. More than half of Brazil is 200 meters or more above

sea level but only a small part rises above 1,000 meters, with the

highest peaks reaching an altitude of around 3,000 meters. Brazils river

system is extensive. The Amazon and its tributaries, which are great

rivers in themselves, drain over half of Brazil. Other large rivers include

the So Francisco in the northeast and the Paran and the Paraguay

Rivers, which flow south to empty into the Rio de La Plata. The

considerable hydroelectric potential of Brazils rivers has beenincreasingly exploited over the last 35 years. Forests still cover vast

expanses and farmland is found mainly in the South, Southeast and

Central West with large areas suitable or adaptable for pasture. Brazil

has some of the largest iron ore deposits in the world and mines

significant quantities of many other metals, minerals and precious

stones.

Market attractivenessBrazils gross domestic product (GDP) declined by just 0.3% during the

global economic crisis in 2009, and it is expected to rise by 5.8% in

2010. Its balance of payments deficit is less than 2% of GDP and its

budget deficit, which stands at less than 4% of GDP, is very relatively

low. Inflation also stands at a moderate level of 4.6% per annum, and

short-term interest rates at 8.5%

per annum are high enough to continue to keep inflation under

controlThe Brazil commercial arena is changing rapidly due thecountrys increasingly competitive markets, as well as government

initiatives. However, a number of potential target companies may lack

reliable financial, tax, commercial and operational information as well

as historical and forecast management reports, competitive

intelligence, operational and market data may be untimely,


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inconsistent, inaccurate or simply nonexistent.

Market selection and determination

In considering the first steps into a new market, organizations have

many issues to consider. Our team helps you identify which steps are

the most critical, where the most significant risks could be and how to

implement a plan both to take advantage of market opportunities while

mitigating risks:

1. Identify the market - which markets, which segments, how to

manage and implement marketing efforts,

how to enter through intermediaries, or directly, using what

information?

2. Develop sourcing opportunities - whether to obtain products, make

them or buy them?

3. Decide on the form of investment and control joint venture, local

partner, acquisition?

4. Determining how to operate in Brazil from a tax perspective whatare the most efficient structures, the key

potential taxes, risks, opportunities involved, existing benefits and

incentives?

5. Building or validating a business plan how the business is likely to

perform in the upcoming years? How the key

commercial and operational drivers, external and internal factors will

impact the business?

6. Evaluating where to establish the business (location assessment, site

identification) - What locations (regions, cities)

are more attractive? Within the selected locations, what are the sites

(properties, land, buildings) that best fit the

business needs?


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IndiaGreenfield

India: the second fastest growing market in Asia The Indian market with

its one billion plus population, presents lucrative and diverse

opportunities for U.S. exporters with the right products, services, and

commitment. Indias requirements for equipments and services for

major sectors such as energy, environmental, healthcare, high-tech,

infrastructure, transportation, and defense will exceed tens of billions

of dollars in the mid-term as the Indian economy further globalizes and

expands. Indias GDP, growing at 6.7% (for 2008-09), makes it one of

the fastest growing economies in the world and the second fastest in

Asia. India has potential for a sustained growth of 8-10% for the next

couple of years. Now is the time for U.S. companies to enter the rising

Indian market.

Indian Heritage - Concepts & Values to Know In a diverse and complex

country like India, its difficult to impart generic conclusions that could

be used by those wanting to do business here. Regionalism, religion,

language and caste are all factors that need to be taken into account

when doing business in India. Behavior, etiquette and approach are allmodified depending on whom you are addressing and the context in

which they are being addressed.


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Unlike western societies, in India religion, fatalism and collectivism are

all components of daily life and they need to be respected for a healthy

and successful business relationships. Despite the traditional caste

system being dismantled, remnants may still be witnessed in the Indianhierarchical structure of business practices and decision-making. There

is a strong sense of tradition tied into daily business practices. Yet, signs

of change are becoming more evident. Ever since the economic reforms

began in 1991, Indias market is growing rapidly. With its geographical

positioning in the Indian Ocean, a major international trade route, and

with its rich mineral and agricultural resources, Indias economy is

witnessing increased inflows of foreign investments. India is alsorecognized for its competitive education system and vast pool of highly

skilled laborers, making it an attractive market for foreign businesses.

No matter what the industry is, foreign businesses should expect some

degree of differences in business norms in India. Included below are

some basic business etiquettes that the U.S. companies should followwhen developing and maintaining relationship with Indian businesses.

Business Etiquette Do use titles to address your Indian counterparts,

such as Professor or Doctor. If he/she does not have a title, use

Mr, Mrs, or Miss.

Do wait for a female business colleague to initiate a greeting whether

it is verbal or physical. Indian men do not generally shake hands with

women out of respect.


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Do remain polite and honest at all times in order to prove that your

objectives are sincere.

Don't be aggressive in your business negotiations it can be

interpreted as a sign of disrespect.

Don't take large or expensive gifts as this may cause embarrassment.

If you do take a gift make sure you present the gift with both hands.

Don't refuse any food or drink offered to you during business

meetings as this may cause offence (sample small portions atleast). In

addition, it is useful to keep in mind that traditionally, and religiously,

majority of Indians are vegetarians and do not drink alcohol or smoke.

Market Entry Key factors to doing business successfully in India

include: finding good partners who have knowledge of the local market

and procedural issues; good planning; aggressive due diligence and

follow up; and patience and commitment.

The U.S. Commercial Service in India offers customized solutions to

help your business enter and succeed in the Indian market. Our India-

wide network of trade specialists will work one-on-one with you

through every step of the exporting process, helping you to:

Target the best markets

Promote your products and services to qualified buyers

Meet the best distributors and agents for your products and services

your firm is a large conglomerate

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