Global business plan

GBP_00_Overview_Final.docx
Global Business Plan Project

Overview

Every organization conducts research to plan and implement a business idea. This project is designed to provide the foundation for an international business plan. These activities offer flexibility for many settings related to global business enterprises. The framework may be used for planning global expansion of an existing product or service, or may be used to research a new foreign business opportunity. Each module of this project is designed to gather information for one component of an international business plan.

The final result of your global plan may be in one of the following formats:

· a written report with supplementary tables and visuals ( preferred ).

· an oral presentation with visuals ( not in this class ).

· a summary in a poster format or other visual display (web site, video, newsletter; acceptable if online access and/or uploadable to Canvas ).

Note: While the research components in each module are designed to provide a comprehensive analysis of this aspect of a business plan, selected items may be used to gather information for a specific element.

Table of Contents

Phase 1 – Planning the Global Business Enterprise

MODULE 1 – Identifying Global Business Opportunities

· Determine potential international markets for existing or proposed goods and services

MODULE 2 – Analyzing International Competitors

· Identify domestic and international companies involved in similar business global business activities

MODULE 3 – Assessing the Economic-Geographic Environment

· Examine geographic and economic factors that affect the business environment of a nation

MODULE 4 – Assessing the Social-Cultural Environment

· Research social institutions, customs, traditions, and beliefs influencing business

MODULE 5 – Assessing the Political-Legal Environment

· Research the influence of government and regulations on business activities

PHASE 2 – Organizing for Global Business Activities

MODULE 6 – Selecting a Global Company Structure

· Suggest objectives and an organizational framework for global business operations

MODULE 7 – Financing Sources for Global Business Operations

· Project start-up costs and funding sources for international operations

MODULE 8 – Creating a Global Management Information System

· Identify needed databases and information systems to facilitate international business activities

MODULE 9 – Identifying Human Resources for Global Business Activities

· Gather information on needed personnel for operating an international enterprise

MODULE 10 – Managing International Financial and Business Risks

· Identify methods for reducing global business risks

PHASE 3 – Implementing the Global Market Plan

MODULE 11 – Product and Target Market Planning for Foreign Markets

· Identify specific attributes and customer benefits for a proposed international product or service

MODULE 12 – Designing a Global Distribution Strategy

· Analyze distribution channels and intermediaries for global business operations

MODULE 13 – Planning a Global Promotion Strategy

· Suggest advertising messages, media and other promotional activities for an international enterprise

MODULE 14 – Selecting an International Pricing Strategy

Recommend a global pricing strategy based on costs, market demand, competition, and economic environment

PHASE 4 – Implementing the Global Market Plan

MODULE 15 – Determining Financial Results

· Estimate revenue and costs based for international business activities

MODULE 16 – Measuring International Business Success

· Suggest potential criteria for global business accomplishments based on financial results and social contributions

GBP_01_Identifying_Global_Business_Opportunities_final.docx
Global Business Plan Project

1. Identifying Global Business Opportunities

Learning Goals

1. To assess factors that create international business opportunities

2. To identify potential global business opportunities for various foreign markets

Purpose

Some organizations attempt to expand their international operations by seeking foreign markets appropriate for existing products and services. Other enterprises assess foreign business environments in an attempt to meet needs in those markets.

In this first module, you will conduct a preliminary assessment of geographic, economic, social-cultural, and political-legal factors that create global business opportunities in foreign markets. Also, you should consider how technology could create new foreign business opportunities by expanding possibilities for production, marketing, and distribution of goods and services.

BACKGROUND

Global Business Opportunities

Potential foreign business opportunities may be viewed in two major categories:

A. Various country factors create international business opportunities. These include:

· Natural resources, agricultural products, or geographic factors (climate or terrain)

· Level of economic development and infrastructure

· Cultural characteristics, social activities, or demographic trends

· Changing political situations or legal factors

· Technology that may enhance production or distribution of an item

B. Existing companies attempting to expand into new markets around the world—List several possible global business opportunities that would be the basis for new or expanding international business operations. These business opportunities may be consumer goods or services; or organizational goods and services, sold to businesses, government agencies, nonprofit organizations, schools, hospitals, hotels, or other organizations.

Examples of global business opportunities include: processing of fresh fruit in Chile for distribution around the world; sale of water filtration systems in developing economies; sale of food products adapted to the tastes of different cultures; development of cellular telephone systems in countries with a weak communication infrastructure; and expansion of fast-food restaurants into countries with expanding economies.

Resources

Web links:

· Global Edge CyberSite: http://www.globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

(Works best with Firefox.)

Conduct Research

Collect data and information to use in formulating this aspect of your business plan by answering the following questions.

1. POTENTIAL MARKETS

Discuss one or more of the global business opportunities from above in terms of:

(a) a specific product or service, including customer benefits; and

(b) a potential market—a country that would be appropriate for this business opportunity.

2. ABSOLUTE AND COMPARATIVE ADVANTAGES

Analyze for the presence of an absolute or comparative advantage that might be related to a business opportunity in the country where the item will be produced or sold. Describe how this analysis might influence the success of your proposed business idea. (For example, the availability of natural resources can make a business opportunity cost efficient.)

3. BUSINESS OPPORTUNITY ANALYSIS

Compare two or more proposed business opportunities based on factors such as foreign market potential, start-up costs, and foreign business risks. (For example, a proposal to construct new highways may be appropriate for a developing economy. However, the risks in this market are probably greater than in an industrialized nation.)

Supplementary Activity

Research the international operations of a company doing business in several countries. Obtain information related to:

1. the products sold in various regions of the world;

2. current and planned business activities in specific regions of the world—Asia, Africa, Eastern Europe, Middle East, Latin America;

3. the company’s strengths and weaknesses related to global business activities;

4. future actions that might be suggested for the company’s international operations.

E-Commerce Application

Identify an online business application (such as providing product information, selling online, or ordering from suppliers) that would be appropriate in the proposed foreign market or that could enhance the promotion or distribution of your proposed business opportunity.

Prepare Summary

In a separate Word document, prepare a summary report entitled: Global Business Opportunities consisting of the following components:

1. An overview of geographic, economic, cultural, political, and technological factors that creates the proposed global business opportunity.

2. A description of the potential market for this product or service.

3. A synopsis of any absolute or comparative advantages (as applicable).

4. Recommend one or more foreign business opportunities (with a specific foreign market) for an existing company or a new enterprise. Provide evidence to support your proposal.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

(1) these samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project

(2) the accuracy of content, data, and clarity of writing are NOT guaranteed; and

(3) these samples may NOT BE DUPLICATED.

SUBWAY’s mission is to provide Brazilian consumers with a healthy and quick alternative in the fast-food market. By providing made-to-order sandwiches, we are meeting the needs of the ever-growing, fast-paced and health-conscious Latin American community. Our goal is to provide value, service and convenience to our customers. SUBWAY plans to equal or exceed the number of outlets operated by McDonald’s, currently Latin America’s largest fast-food company. With our system and operational strengths, dedicated personnel are willing to meet the expectations of consumers. We believe that our SUBWAY franchise will continue to grow and be successful in the Latin American market.

SUBWAY is the largest submarine sandwich chain in the world and is rapidly expanding internationally. SUBWAY has more than 14,100 stores in over 73 countries, making it the second largest restaurant chain overall. The brand was introduced in 1974 and today, all locations are franchised. From 1987 to 1999, the SUBWAY franchise has been ranked #1 Submarine Sandwich franchise in Entrepreneur’s Franchise 500 listing. For eight times in those past twelve years the SUBWAY system was #1 franchise overall, beating out other fast food franchising giants and all other franchises. In Entrepreneur International’s 1999 Top 200 ranking, SUBWAY was placed third out of the world’s top 200 franchises. Latin America is among the growing markets for SUBWAY franchises, with over 215 stores already in this area.

The Happy Harbor Company’s mission is to improve global exporting and importing that enhances economic activity. The objectives of the company are to construct profitable harbors that will help boost the country’s trading capacities, increase trade between countries with already existing harbors, and create jobs and a higher standard of living for the people of Latin America.

The Happy Harbor Company is there so that countries that do business with Latin America do not have to think of how to get their goods into the countries and where the best harbors are located. The Happy Harbor Company provides the construction of the harbors and seaports for countries that are in need of better facilities for trading on their coastal borders. The company is also here to help companies in other countries to locate their goods. Latin America has a growing economic base and the Happy Harbor Company wants to be there to help not only the countries of Latin America, but also the many international companies that would benefit greatly from conducting business with the Latin American economy.

Translated from Spanish, our product name simply means “Good Health.” As we are a U.S. company entering into a foreign market, and, therefore, bound to meet with cultural differences, it is important that there be no confusion caused by complicated names and slogans lest we are faced with language and cultural problems. Our slogan is also quite simple, although it does have two slightly different, yet equally valid, translations. The first is simply “The vitamins for the whole world,” which stresses the multinational aspect of our operations. We wish to provide “Good Health,” literally and figuratively, to the entire world through our vitamins. The second, more slang-oriented, translation of our company’s slogan is “The vitamin for everyone.” This translation implies, and rightly so, that this is the vitamin for everyone. Indeed, our product is for everyone as it is a multi-vitamin that can be taken by adults, children, men, women, and so on. More, though, about the particulars of our fabulous product will be revealed later.

GBP_02_Analyzing_International_Competitors.docx
Global Business Plan Project

2. Analyzing International Competitors

Learning Goals

1. To identify potential competitors related to a proposed global business enterprise

2. To determine the influences of competitors in global business

Purpose

As proposed enterprises or established companies enter foreign markets, lessons can be learned from the successes and challenges of other organizations. In addition, awareness of competitors makes it possible to better plan and implement your global business activities. In this module, your goal is to identify and analyze the international business operations of organizations related to the global opportunity you are exploring.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the global business opportunity identified in Module 1 (or a different international business enterprise or idea), research information related to the following:

1. POTENTIAL COMPETITORS

Identify companies that:

A. have business activities similar (or related) to the business opportunity you are proposing; and

B. operate in the country (or countries) that you are considering for your international business enterprise.

2. COMPETITIVE ADVANTAGES

Discuss the competitive advantages of these companies. (For example, some companies may gain a competitive advantage as a result of access to raw materials, others may gain an advantage through the use of technology for production and distribution or as a result of a well-known brand name.)

3. INTERNATIONAL STRATEGIES

Compare the international business strategies of these companies. Do these companies make use of standardized products and operating policies? Or, do they use a strategy that is adapted to various foreign markets? (Film is sold in standardized formats around the world while laundry detergents are adapted to clothes washing habits and water hardness.)

Supplementary Activity

Interview people who work in similar companies, related industries, or potential suppliers for your business idea. Obtain information about the product or service that might enhance your knowledge of this type of business.

E-Commerce Application

As online operations increase, companies seek new expanded markets and additional business activities. Describe situations in which the competitive environment has changed as a result of e-commerce activities.

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. A discussion of potential competitors and their global business activities.

2. A synopsis of global business strategies that could create competitive advantages.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

The Happy Harbor Company has competition in the form of other harbors, including the ports in Callao, Illo, Paita, Salaveryy, Iquitos, and Yurimaguas. However, our harbor differs from our competitors because we not only offer competitive service at a lower price, but we offer an entertainment sector as well, which will improve the surrounding economy.

The fast-food market is very young in Brazil. The Brazilian people have the luxury of eating at McDonalds. We believe that the market will be very competitive between McDonalds and us. This market, however, will not be half as competitive as it would be in the United States. We believe that we can gain a solid portion of McDonalds’ market share by the use of product differentiation.

Coche Libro will have a competitive advantage in Bolivia. One reason is that this service will be unique for the country and surrounding countries. Its biggest competitor will be the public library system. However, we are confident that people will be attracted to the services we have to offer. Due to the advancement of e-commerce, we will be assured that many will be able to access our company via the Internet. Also, due to technological developments of highways, more areas of Bolivia will be accessible. We will also have an advantage because we will be using the most up-to-date resources thanks to our alliance with Ford and Apple.

In response to demonstrated needs of the Bolivian market, new services are being developed to include minor checkups, blood pressure testing, mammograms, and infant and child immunizations. These new services would be especially useful to rural Bolivians who can now easily obtain them during one of the many convenient Healing Wheels routine stops. These needs are not only local to Bolivia, and as previously stated, perhaps Healing Wheels can answer some of the needs of other Latin American countries in equal need.

GBP_03_Accessing_the_Economic_Geographic_Environment.docx
Global Business Plan Project

3. Accessing the Economic-Geographic Environment

Learning Goals

1. To identify economic and geographic factors on international business activities

2. To assess economic and geographic influences on proposed global business operations

Purpose

The natural infrastructure (such as rivers and seaports) and physical infrastructure (transportation and communication systems) of a nation provide the foundation for economic development. In this module, your goal is to gather information on various geographic and economic factors that include business opportunities in other countries.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas:

1. GEOGRAPHIC INFLUENCES

Identify geographic factors (climate, terrain, waterways) that influence business activities in the country. (In some countries, mountains make movement of raw materials and production supplies difficult and expensive.)

2. MAJOR PRODUCTS AND INDUSTRIES

Describe the country’s :

A. main natural resources and agricultural products,

B. major industries,

C. major imports, and

D. major exports.

(A country’s natural resources and agricultural products are the basis for foreign investment and exporting activities.)

3. CURRENT ECONOMIC CONDITIONS

Assess the country’s recent economic conditions related to GDP, inflation, interest rates, currency value, personal income, and employment. Suggest how these economic factors may attract or deter foreign investment.

4. INFRASTRCTURE

Analyze the infrastructure of the country with regard to availability of transportation, communication, and utilities.

Supplementary Activity

For the country (or countries) you are researching, monitor recent trends of the value of its currency on world markets. Discuss factors that have influenced the exchange rates.

E-Commerce Application

Research Internet access in other countries in an attempt to determine potential e-commerce activities in those foreign markets.

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. A synopsis of geographic factors, natural resources, major industries, imports, and exports for the country (or countries) being considered for the proposed global business enterprise.

2. An overview of the economic environment and infrastructure.

3. Recommend actions that might be taken for existing or proposed businesses related to geographic and economic influences in this foreign market environment. Provide evidence to support your proposal.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

Geographically speaking, Latin America is as diverse a terrain as one would hope to find. There are mountains, most notably the Andes, two oceans, numerous major rivers, rainforests, deserts, and even some Antarctic territories. “Nature has presented the inhabitants of South America with an unrelenting challenge. On the west coast, most of the major cities are located in geologically active zones. All too frequently, earthquakes, tidal waves, volcanic activity and mudslides have taken a staggering toll of human life.”

Linked to this difficult terrain is that, in many of the region’s poorer countries, the physical infrastructure is less than desirable. Often, there is only one two-lane road to reach destinations and, as we have seen in the video of the Amazon, sometimes there are no roads at all. The absence of viable roads, as well as the lack of sufficient transportation, makes it difficult for residents of rural areas to receive medical care. In some countries, like Brazil, for instance, there is only one doctor for every 681 people, partially due to the aforementioned lack of infrastructure. In comparison, Argentina (one of the region’s most rich and resourceful countries) has one doctor for every 376 people, which is still a low ratio by U.S. standards. The people of Latin America, then, often incur difficulties reaching one of their few available doctors. A multi-vitamin like our product would provide them with pro-active and preventative medical treatment so that they would be better protected against the sickness and infection that requires medical care.

The geographic factors of Brazil have enticed our team to bring a SUBWAY franchise to this country. We believe that the mostly tropical climate in Brazil is ideal for our product. The terrain, which is somewhat treacherous, should not be a problem for distribution due to the fact that corporate SUBWAY will handle the delivery of our supplies. The franchises that we plan to open will be located in urban areas where the infrastructure is more stable; this will ensure safer arrival of our supplies and our customers.

Geographically, Bolivia is the only country in Latin America that is landlocked. The country is bounded by Brazil to the north and east, Paraguay to the southeast, Chile to the southwest, and Peru to the northwest. The Andes mountain range runs through the country, dividing it into three geographical zones: the mountain ranges to the West, the semitropical Yungas and temperate valleys of the eastern mountain slopes, and the tropical lowlands or plains of the eastern lowlands. Although Bolivia is within tropical latitudes, climatic conditions go from tropical conditions in the lowlands to cold polar conditions in the highest parts of the Andes. Temperatures differ due to elevation and there is little seasonal variation.

Many geographical factors will influence the market potential for our product. The main aspect includes Peru’s coastline; with the 2,414 kilometers of coastline, it makes it very accessible to ships to come in and out of our port. An unfortunate consequence that our company will have to deal with is the possibility of natural hazards. Within Peru, earthquakes, flooding, and landslides are all within the realm of occurring. In addition to this, mining wastes have increasingly been polluting the coastal waters of Peru. However, we believe that our harbor will help eliminate this due to the sponsorship that we plan on providing. We will have the financial means to help clean up both the rivers and coastal waters of Peru. Helping the country in hazard relief is just one way our company is planning to give back to the country in which we operate.

Shipping products from our harbor to companies within Peru can be seen as a slight problem mainly because there are 64,793 kilometers of unpaved highways. However, the Amazon system more than makes up for this problem with the 8,600 kilometers of navigable tributaries that it provides.

The town of Chiclayo has been chosen as the target city for a possible business venture due to its great geographical location. Chiclayo is located on the upper coast of Peru and has possible roadways to the Amazon which offers a tremendous amount of trade with countries such as Brazil and other countries on the eastern side of South America.

Bolivia has sufficient roadways within its rugged terrain. Although not all of the roads are paved as ideally as in the United States, our trucks are Ford tough backed with four wheel drive and also come equipped with the off-road package for the less developed areas. The climate is ideal for our service. We do not have to deal with snow, but we may need to deal with spells of heavy rain. (However, by going on-line to our company site, one can reserve books and we can drop the books off at their desired location.) One hindrance will be due to the high elevation of some of the plateaus, which will lead to the combustion of the gasoline and will cause inefficiency (www.odci.gov).

The infrastructure in Brazil is more adequate for our franchise. Brazil has over 30, 133 km of railroads, 1,670,148 km of highways and 50,000 km of inland waterways. This is more than enough infrastructure to successfully cater to our business.

Telecommunications in Brazil are very good. Brazil has extensive microwave radio facilities, 9.86 million telephones, TV and AM/FM radio, short-wave, 3 coaxial submarine cables, and 3 Atlantic Ocean INTELSAT earth stations and domestic satellite earth stations. There is enough communication power here for NASA let alone a sandwich shop.

In 1997, Peru had economic growth of 7.3%, with inflation at an all time low of only 6.7%, which is a great rate when compared to other Latin American countries. The economy grew vigorously in past years, with tourism and telecommunications leading the advance. This is good for global business, as the economic stability will lead to increased profits for our company. The Peruvian economy has become increasingly market-oriented, with major privatizations completed since 1990 in the mining, electricity, and telecommunications industries. Foreign investments have helped push GDP growth to 7.3% in 1997 with inflation at its lowest levels in 23 years.

Because Bolivia is one of the poorest and least developed countries in Latin America (literacy rate- 83%) infrastructure may be an issue. Not everyone will have a computer, so many will not be able to access our on-line services. And, many may not make it to sporting events, so some may not know about El Coche Libro during its introductory stages. Our aim is to have enough trucks around that our service will be spread through word of mouth and we will gain brand recognition (www.odci.gov).

Upon the arrival of the 1990s, the Brazilian economy was declining in growth and was experiencing serious inflation. This led the Brazilian government to keep the economy highly regulated. The government utilized trade barriers and investment barriers to protect the unstable economy. This could be a bit of a problem for our plan, but in recent years the government has been moving to a free trade, unregulated economy. The Real Plan resulted in a significant increase in the real income of poorer Brazilians as they were no longer forced to bear the inflationary burden. The Real Plan has effectively lowered the annual rate of inflation, reformed social security, taxation, and public administration. Therefore, the demand for consumer goods and services has exploded in Brazil.

GBP_04_Accessing_the_Social_Cultural_Environment.docx
Global Business Plan Project

4. Accessing the Social-Cultural Environment

Learning Goals

1. To assess social and cultural influences of global business activities

2. To identify potential adaptations

Purpose

A country’s business environment may be influenced by the importance of family, religious beliefs, and demographic trends. In this module, your goal is to gain cultural and social awareness about the country (or countries) you are considering for your global business opportunity.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas:

1. DEMOGRAPHIC TRENDS

Identify demographic trends (such as birth rates, literacy rates) that might influence business activities in the country. (Lower birth rates result in an aging population with expanded demand for health care.)

2. CULTURAL ANALYSIS

Discuss language, customs, traditions, and beliefs of the country. (Religious beliefs may make the sale of certain products inappropriate in some countries.)

3. SOCIAL INSTITUTIONS

Analyze the influences of social institutions (family, church, labor organizations) on the business culture. (In some countries, a strong tie exists between family and business.)

4. INFORMAL TRADE BARRIERS

Describe informal trade barriers created by social and cultural factors. (Communication styles and negotiating tactics vary around the world resulting in the need to adapt to the host country’s culture.)

Supplementary Activity

Interview a person who has lived in, worked in, or traveled to a country you are researching. Obtain information related to eating habits, shopping, leisure activities, the role of family and religion, customs, traditions, and other aspects of the business environment.

E-Commerce Application

Locate web sites designed to meet varied cultural needs of Internet users in other countries. Identify specific adaptations related to format, language, colors, pricing, product offerings, and other features of the web sites.

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. An overview of demographic trends that could influence global business activities.

2. A description of cultural factors, social institutions, and informal trade barriers that could affect global business activities.

3. Recommend actions for existing companies or new enterprises that might be necessary when considering the social and cultural environment of the foreign market. Provide evidence to support your recommendations.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

Society is becoming faster-paced and more industrialized, creating a market opportunity in healthy fast food. Cultural tastes of Brazil range so widely that our sandwiches can be customized to various tastes. Brazilians prefer freshness and natural foods as opposed to fast food, which dominate Brazil’s franchise market, and is a growing concern in Brazil for healthy alternatives to their current way of life.

Socially and culturally, Bolivian people have a strong Catholic belief, with 95% of their people being Roman Catholics. People are very friendly and welcome new ideas, and new institutions. The adult literacy rate is 80% as of 1998; El Coche Libro will try to increase this number to 90% in the first 5 years of operation.

The social contributions of Costa Rica deliver positive indicators of a successful country. Astonishingly, 95% of Costa Rica’s population above the age of 15, can read and write showing the strength in the Costa Rican education system from pre-school through the university level. Spanish is the official language with few dialects, and 95% of the religious community is Roman Catholic. Costa Rica’s population reaches 3.5 million with concentrations around urban centers. Whirlpool will easily be able to find skilled and reliable hotel employees in Costa Rica.

GBP_05_Accessing_the_Political_Legal_Environment.docx
Global Business Plan Project

5. Accessing the Political-Legal Environment

Learning Goals

1. To assess political and legal influences on international business activities

2. To identify appropriate strategies for operating in various political-legal environments

Purpose

Political stability is commonly related to the type of government and degree of corruption present in a country. In addition, a company may face various business regulations when conducting international business. In this module, your goal is to identify political and legal factors that could affect global business decisions.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas:

1. GOVERNMENT AND POLITICS

Describe the type of government and recent political developments that could influence the economic and business environment of the country. (For example, various events in recent years in the Middle East have contributed to an uncertainty when doing business with some countries.)

2. FORMAL TRADE BARRIERS

Identify formal trade barriers (tariffs and other taxes, foreign exchange controls, ownership restrictions) that might require a company to adapt its business strategy.

3. PROMOTING GLOBAL BUSINESS

Analyze host government efforts to attract foreign investment. (Some nations offer tax incentives to attract foreign capital.)

4. INTELLECTUAL PROPERTY

Discuss the country’s regulations to protect intellectual property, such as brand names, copyrights, patents, software, music, videos. (Some countries do not enforce these laws resulting in the pirating of products and lost profits for companies.)

Supplementary Activity

Conduct a survey of local businesspeople who are involved with or aware of political and economic trends around the world. Obtain information related to their assessments of which regions are the best prospects for international business expansion.

E-Commerce Application

Research possible restrictions or taxes imposed for online activities in other countries. Describe how these government actions could affect global business operations.

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. An overview of government regulations, taxes, and formal trade barriers that affect global business activities.

2. A synopsis of intellectual property rights and regulations.

3. Recommend actions that might be necessary for an existing company or a new enterprise with regard to factors in the political and legal environment. Provide evidence to support your proposal.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

Politically, Peru is currently quite stable. Harbors will give Peru an opportunity for expanded foreign trade giving them stronger exporting ties and therefore increasing political relations with other Latin American countries. Current political risks include the presidential election going on which might change certain tax factors that could directly affect the importing and exporting activities. In addition, the threat of guerilla upheaval on the government is a direct risk the company must consider.

Consumer and Franchising Laws have enabled companies to franchise their businesses more steadily as the government moves toward an unregulated, free trade economy. The Real Plan has resulted in a significant increase in the real income of poorer Brazilians as they were no longer forced to bear the inflationary burden. The Real Plan has effectively lowered the annual rate of inflation, reformed social security, taxation, and public administration. Therefore, the demand for consumer goods and services has expanded in Brazil.

Politically, Bolivia has had its share of instability, having gone from dictatorships to democratic rule. The military rule was in effect until very recent years, from 1964 until 1982. After this, Bolivia became a democratic country. Today, the government of Bolivia is a republic that is very active in foreign trade. The government is especially cooperative with educational resources, and they strongly support educational institutions (like El Coche Libro), and services.

Government regulations that our company will have to deal with include Peru’s current system of tariffs and taxes. Currently, Peru has a two-tier tariff structure with a duty of 15% on the vast majority of imports and 25% on the rest. However, Peru does have in effect a simplified drawback scheme, which allows small exporters to claim a flat 5% rebate. Since the beginning of 1991, Peru has applied surcharges (in addition to the 15% tariff) on numerous agricultural products, including wheat, rice, corn, sugar, and milk products, but recently these surcharges have all but become extinct. Peru is also involved in free trade agreements, which grant tariff preferences to most Latin American countries. A positive aspect of operation in Peru is the elimination of non-tariff barriers, including subsidies, import licensing requirements, import prohibitions, and quantitative restrictions.

Costa Rica has a stable democratic political system. “Bilateral relations between the United States and Costa Rica remain excellent, reflecting shared democratic values and traditions” (www.usatrade.gov). In February 1998, national elections voted in Miguel Angel Rodriguez of the Social Christian Party over Jose Miguel Corrales of the National Liberation Party. In 1983, President Luis Alberto Monge announced Costa Rica’s permanent neutrality creating a demilitarized country, in which their constitution prohibits armed forces, only allowing room for the Coast Guard. Costa Rica is nicknamed the “Switzerland of Central America.” Tourists will be able to feel safe and secure when visiting this country.

GBP_06_Selecting_a_Global_Company_Structure.docx
Global Business Plan Project

6. Selecting a Global Company Structure

Learning Goals

1. To assess various entry modes for global business operations

2. To recommend strategic alliances for proposed international business activities

Purpose

As a business organization enters new foreign markets, decisions must be made regarding various organizational factors. In this module, your goal is to develop a strategic plan related to an enterprise’s strategic goals and organizational structure.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas:

1. STRATEGIC PLANNING

Develop strategic objectives that communicate major goals related to:

A. product (or service) offerings,

B. target market and customer benefits,

C. financial aims (market share, return on investment),

D. employee satisfaction, and

E. social contributions.

(Strategic goals are commonly stated in a manner that can be measured objectively, such as “to provide households with clean drinking water at a moderate price.”)

2. ENTRY MODES

Analyze different global business entry modes that a company might select when planning international business activities. Compare the benefits, costs, and risks associated with using exporting, turnkey projects, management contracting, licensing, franchising, contract manufacturing, joint venture, and wholly-owned subsidiaries. (In general, exporting has less risk than some of the other entry modes. The product or service, as well as the economic, social-cultural, and political-legal environment of the country, will influence an organization’s entry mode.)

3. ORGANIZATIONAL STRUCTURE

Discuss the extent to which the organization will use centralization and decentralization. (Centralized organizations tend to offer standardized products or services with decisions made in upper levels of the organization. In contrast, decentralized organizations usually involve products or services that need to be adapted to various geographic, economic, social-cultural, and political-legal influences.)

4. STRATEGIC ALLIANCE

Identify local companies of the country or international companies operating in the country that could be a business partner. These strategic alliances may be suppliers, distributors, sales representatives, or consultants. (For example, a bottled water company might reach an agreement to transport and sell its product through the existing distribution system or a soft drink company.)

Supplementary Activity

Prepare an in-class presentation (and visual) comparing alternative entry modes for implementing international business activities. These could include exporting, turnkey projects, licensing, franchising, joint venture, and wholly-owned subsidiaries.

E-Commerce Application

Based on your proposed global enterprise, suggest an online strategic partnership with a company that has a strong online presence. Discuss how this agreement could benefit the parties involved.

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. A synopsis of the strategic objectives for the proposed global enterprise.

2. A description of potential global business entry modes that might be used.

3. An overview of centralized and decentralized organizational activities.

4. Recommend strategic alliances that could contribute to global business success. Provide evidence to support these recommendations.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

The top priority of the Buen Salud vitamin company is to improve the health of its consumers. These consumers include residents of both urban and rural areas of Latin America. As Buen Salud is a small, independently-owned company, it was decided by its board of directors that a strategic alliance was needed to facilitate operation. The company chose McNeil Consumer Healthcare, the world’s leading manufacturer and marketer of nonprescription pain-killers, such as Tylenol. McNeil Consumer Healthcare seemed to be a prime candidate for such a joint venture as they are a company that prides itself on aiding and educating others. They have established several programs to benefit those wishing to get started in the pharmaceutical world (see their website at www.mcneilcampusrecruiting.com).

Although usually willing to sponsor individuals rather than entire companies, there was still some work to be done to make this alliance a reality. After some debate, however, McNeil has agreed to take Buen Salud under its wing and the agreement established is this: Buen Salud will have the use of Tylenol’s manufacturing plant in Argentina. In return, Buen Salud has agreed to enter Chile and Brazil as our first markets and to use our distribution vehicles to distribute Tylenol to markets where it does not currently have a large presence (mostly rural areas of Chile and Brazil).

With respect to our global approach, we chose franchising. We believe this approach combines our entrepreneurial drive and ambition with the experience and expertise of a larger company. We will be selling a product that has been well accepted in many markets, giving us name recognition. The operation and control of our business has already been established, assisting us in running the business. In contrast to purchasing an independent business, buying a franchise is an investment not only in our store, but in the franchising company as well. If the chain expands, our individual may build greater equity. Government statistics have shown individuals starting a new business on their own have significantly higher failure rates than those investing in franchises.

We have chosen three specific strategic alliances to benefit our start-up plan. First, we will be working with Casa Santa Luiza, a delivery company, for delivering meats and vegetables. We will be putting our name on their trucks so they get a household name associated with their company. We will also be using Signexpress and Signs.now for promotions. They will give us free signs, and in return, we will set up space in our store, which they can use to sell to other companies for advertising. Finally, we will be using G-S-M Arguitetura e Design to build and renovate our store. They will be cutting the cost of construction, and in return they are able to advertise outside our store that they were the store designers.

If we are going to have a strategic alliance with companies in Latin America for us to succeed, we will have major bookstores, libraries, gasoline companies, and sports teams (mainly the soccer team “The Strongest”). We will ask them to help us in promoting our company (El Coche Libro) and run the company. In exchange, we will help promoting (bookstore, gasoline, etc.) and support (sport teams) for these companies that are willing to help us, for a better future of their own country.

We will also have an alliance with ShopGenerosity.com. This company is an Internet shopping mall and fundraising service for community based arts, educational, and other nonprofit organizations. Shoppers shop through www.shopgenerosity.com by first selecting a recipient nonprofit organization and then selecting from more than 70 of the Internet’s top merchants. Partnering nonprofit organizations receive 50% of lead fee revenue and up to 25% of other revenue from ShopGenerosity.com. Our participation with ShopGenerosity.com is risk and investment free. By having a strategic alliance with an Internet shopping mall, we will be getting backed by consumers all around the world.

Our joint venture is a major source in the success for the project. We have to establish who will use our port once it is built. Such companies, including exporting companies, will contribute to the main profits of our harbors. Also, our company will include an entertainment segment that will increase the job market as well as the existing economy.

The production of our port should be conducted with a decentralized business plan. Every time we open a new harbor, the size and the materials used to export and import products will determine the profits of the particular harbor. Relationships with suppliers will be vital to the success of the construction of harbors by our company. By establishing a construction force, the port-development process will be easily duplicated.

Healing Wheels has a centralized production strategy because each team of volunteers has a specific base and team leader in charge of each route and schedule. This means that each sector has a centralized team and base. The relationship with the suppliers will be kept up using Internet and e-commerce applications.

SAMPLE TIME LINE

May 15, 2000: Funding will be complete. All capital will be available. All paperwork concerning franchising agreement with corporate will be complete.

May 15-30, 2000: Management team will close deal on one of three locations in Brazil. Letters of intent will then be signed and building construction will begin.

May 30- August 1, 2000: Building construction will be started and completed within these dates.

May 30- August 1, 2000: Management team will recruit and hire full team. Training will take place at this time as well.

August 3, 2000: Grand Opening: three days of promotions and carnival type atmosphere. Appearance by Billy Blanks, Subway’s celebrity sponsor.

August 3, 2001: One year evaluation. If evaluation is sound, we will begin the planning of our second store.

GBP_07_Financing_Sources_for_Global_Business_Operations.docx
Global Business Plan Project

7. Financing Sources for Global Business Operations

Learning Goals

1. To determine start-up costs for proposed global business operations

2. To identify sources of funding for international business activities

Purpose

Both global expansion by large organizations and initial international business activities by smaller companies require financing. In this module, your goal is to obtain information related to start-up costs and sources of funds for your international business enterprise.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the global business opportunity identified in Module 1 (or a different international business enterprise or idea), research information related to the following:

1. ECONOMIC ENVIRONMENT

Discuss the influence of the country’s infrastructure and economic conditions (inflation, currency exchange rate, interest rates, unemployment, personal income) on startup costs and the financial potential for this business enterprise.

2. START-UP COSTS

Identify expenses (and estimated amounts) that would be necessary when starting this global business enterprise. (Be sure to consider equipment, buildings, vehicles, infrastructure improvements, training costs, consultants, legal fees, and licenses.)

3. FINANCING SOURCES

Compare the availability and costs associated with different sources for funding this global business enterprise. (Large companies may sell stock, issue bonds, and obtain loans. Smaller organizations might make use of personal investors, small business loans, venture capital sources, or government-guaranteed loans.)

Supplementary Activity

Obtain recent currency exchange rates for the country you have researched. Graph changes of these currency values in relation to two or three other countries. Discuss economic and political factors that may have influenced any changes in the country’s exchange rate.

E-Commerce Application

Locate online information sources for organizations that provide funding for start-up enterprises involved in exporting and international business. What requirements exist to obtain this funding?

Prepare Summary

In a separate Word document, prepare a summary report consisting of the following components:

1. An overview of economic conditions that might affect start-up costs and financing alternatives for the proposed global business enterprise.

2. A description (and estimate of amounts) of the necessary start-up costs.

3. A synopsis of financing alternatives that might be used in this situation.

4. Recommend actions that might be taken to obtain financing for the proposed global business enterprise. Provide evidence to support your recommendations.

View Sample Report

The following project segments are EXAMPLES and SAMPLE MATERIALS. Please note:

1. These samples were selected from several student team projects at one school and are not intended to represent a particular level of quality, and DO NOT represent a complete project.

2. The accuracy of content, data, and clarity of writing are NOT guaranteed; and

3. These samples may NOT BE DUPLICATED.

Our harbor, which will span a distance of eight miles, will cost us approximately $3 billion to construct. The $3 billion will come from governments subsidizing the harbor, as well as from the sponsors. Our project consists of excavation and dredging approximately 1,100 feet by 600 feet of fastland along the northwest margin of Peru in Chiclayo. We will excavate a triangular area of approximately 230’ by 280’ by 360’ and will have a depth of 38’. This will cost us approximately $13,900,000. The estimate for this price was obtained by Healy Tibbitts Builders, Inc.

To sponsor harbors, the Happy Harbor Company will seek funding from three major American-based companies: McDonalds, Pepsi, and Anheuser Busch. These three major sponsors will provide money mainly for the entertainment and retail sector of the harbor. The sponsors will help support our commitment to provide quality family entertainment throughout the year. Their financial support will help underwrite a variety of free attractions and entertainment, and their advertising and promotional support will help us exceed the approximately 8.2 million visitors that we are expecting at our harbors each year. Of the 8.2 million visitors the entertainment sector expects, the Happy Harbor Company hopes to earn $10 million a year.

For construction purposes, Caterpillar will be providing the materials and equipment for a minimal price as we advertise the benefits of their company to the governments in which we build our harbors. This will make it profitable to build our harbors as well as expand Caterpillar’s business throughout the world.

Start-up costs will include a $10,000 initial franchising fee due upon signing the franchising agreement. Approximately $60,000 will be needed to pay for the lease on the property and for the renovations that will be needed on our store. Since we will be investing in SUBWAY internationally, we are not able to benefit from the equipment-leasing program through SUBWAY headquarters. SUBWAY estimates equipment costs to be around $50,000, but through strategic alliances these costs will be cut by coming to agreements with equipment companies in Brazil. Another $40,000 will be needed for expenses like opening inventory, signs, insurance, supplies, training expenses, opening advertising, and other miscellaneous expenses. Operating costs will include labor, supplies, along with an eight percent royalty to SUBWAY weekly, and a three percent advertising fee. Revenues will come from in-store sales, on-line sales, and catering to small and medium sized businesses. Our pricing strategy will be to slightly increase the price of our products compared to American prices, with respect to the American dollar.

We have decided upon obtaining a small business loan from an American bank. We believe that by doing this in America, we will decrease fears of loan problems due to a more stable economy in the U.S. By having the luxury of the SUBWAY name, we believe banks will be much more comfortable approving our loan application. We will also use the Billy Blanks Foundation for some start-up money. That foundation has worked with corporate SUBWAY for a number of years starting up franchises internationally.

According to the opportunities and requirements for Buen Salud Vitamin Company described in this business plan, and based on what we feel are sound business assumptions, our initial capital requirements are $6 million. To accomplish this goal we have developed a comprehensive plan to intensify and accelerate our marketing and sales activities, product development, services expansion, engineering, distribution, and customer service. To implement our plans we require a loan totaling $5 million for the following purposes:

1. Purchase initial materials and supplies (bottles, labels, ingredients, boxes for distribution, etc.)

2. Maximize sales with an advertising campaign to promote our products/services.

3. Reinforce Customer Support services to handle the increased demands created by an influx of new orders.

4. Purchase of vehicles to be used for large-scale distribution (semi-trucks).

5. Purchase of vehicles to be used for small-scale distribution (SUVs).

6. Facilitation of the licensing and patenting process.

7. Payment for legal fees incurred during research and development.

8. Increase research and development to create additional follow-up products as well as to further fine-tune our competitive advantages.

GBP_08_Creating_a_Global_Management_Information_System.docx
Global Business Plan Project

8. Creating a Global Management Information System

Learning Goals

1. To identify information needs for global business operations

2. To recommend features for an international management information system

Purpose

Computers and other technology have intensified the importance of information in all organizations. Raw data converted to useful information makes managerial decision-making easier in the areas of financial planning, marketing, inventory, and human resources. In this module, your goal is to identify and organize the information needs of a global business operation.

Resources

Web links:

· Global Edge CyberSite: http://globaledge.msu.edu/

· Business Around the World Atlas: https://highered.mcgraw-hill.com/sites/0078137217/student_view0/business_around_the_world.html

Conduct Research

Based on the global business opportunity identified in Module 1 (or a different international business enterprise or idea), research information related to the following:

1. GLOBAL INFORMATION NEEDS

Identify the types of reports and other data that would provide managers with the information necessary for organizational decision-making. (Common categories of management information include financial documents, inventory data, sales and marketing reports, and human resource records.)

2. GLOBAL INFORMATION SOURCES

List the main:

A. external and

B. internal sources of data for your global business enterprise.

(External sources include government agencies, financial institutions, trade associations, suppliers, and customers. Internal sources include research information, accounting data, employee records, sales figures, and inventory reports.)

3. TECHNOLOGY FOR MANAGING INFORMATION

Describe computer systems and other technology that would facilitate the processing, reporting, and use of information for international business operations. (For example, a global computer network may be used to record and report inventory and sales from various branch offices.)

Supplementary Activity

Develop a suggested format for a web site (with information and interactive features) that would communicate to customers, suppliers, investors, and prospective employees some of the benefits and opportunities of your global business enterprise.

E-Commerce Application

Identify examples of two types of websites:

1. Those adapted for viewing in other countries, and

2. Those that originate in other countries.

Analyze and compare these types of sites to better understand web design and information systems in other countries.