Question: Building on the global industry comparative analysis you did in Project 3, develop a business plan for your organization to operate in a new country. Analyze the new country first as a site for certain value-chain activities, and second as a market for your organization's products. Note that the term products will refer to products, services, or a combination of the two.
Your business plan should include a marketing strategy and an entry strategy. Also take into consideration the requirements of accounting and finance. Develop market share estimates and revenue projections using historical data from your organization in the United States and your own research into market size, pricing, and unit sales for the industry in the selected country. Estimate the investment required for relocating one or more activities of your organization's value chain from the United States to the selected country. Also estimate the time needed for your organization to break even. Provide the assumptions behind your projections and assessments of both short-term and long-term risks.
When you submit your project, your work will be evaluated using the competencies listed below. You can use the list below to self-check your work before submission.
• 1.1: Organize document or presentation clearly in a manner that promotes understanding and meets the requirements of the assignment.
• 5.2: Assess the implications of legal, ethical and cultural (national) standards on an organization's operations in global markets and make recommendations for appropriate actions.
• 6.1: Identify the general (external) environment in which an organization operates and discuss the implications for enterprise success.
• 6.2: Evaluate strategic implications for domestic and international markets of an organization's industry.
• 6.3: Analyze an organization's internal strengths and weaknesses for strategic value.
• 6.4: Develop and recommend strategies for an organization's sustainable competitive advantage.
• 7.1: Analyze the legal forms of business organization and make recommendations to support business decisions.
• 7.4: Analyze the impact of international and foreign laws on US organizations acting domestically and abroad.
• 8.1: Evaluate major business/organizational systems and processes and make recommendations for improvement.
• 8.2: Analyze an organization's current technology capabilities and needs, identifying specific strengths and areas of weakness.
• 9.1: Design organizational structures, systems, and processes that support the strategic goals of the organization.
• 9.2: Evaluate how human capital serves as a source of competitive advantage.
• 9.3: Apply the principles of employment law for ethical practices and risk mitigation.
• 10.1: Apply relevant microeconomics principles to support strategic decisions for the organization.
• 10.2: Analyze financial statements to evaluate and optimize organizational performance.
• 10.3: Determine optimal financial decisions in pursuit of an organization's goals.
• 10.4: Make strategic managerial decisions for obtaining capital required for achieving organizational goals.
• 10.5: Develop operating forecasts and budgets and apply managerial accounting techniques to support strategic decisions.
• 11.1: Recommend a strategic plan for the use of technology to meet the strategic goals of the organization.
• 12.1: Assess market risk and opportunity.
• 12.2: Analyze marketing information.
• 12.3: Prepare marketing plan for a new product/service.
• 13.1: Identify and analyze new opportunities.
• 13.2: Create and implement new initiative or enterprise.
• 13.3: Create and manage new enterprise.
Step 1: Equipped with the knowledge and skills gained from previous projects in this course and from preceding courses in the MBA program, you are now ready to put your international strategy all together in a business plan. Review the types of international strategies and their components as you begin this work.
Step 2: Develop an entry strategy for Gustavo of about 6-7 pages in length. The strategy you develop should incorporate the components described here and in Step 3.
As you begin to develop an entry strategy, first perform the following assessments:
• Analyze your site as both a market for your products and as a site for certain value-chain activities.
• Short-list and profile potential partner company candidates.
• Determine what company you will select for partnership or alliance. Evaluate the benefits this partnership would bring to your organization's market position or profits.
• Detail the pros and cons of three market-entry modes. Which entry mode would you recommend and why? How does your chosen mode fit your organization's goals and objectives? For help in answering these questions, review Modes of Entry.
Estimate the financial investment required for the selected entry strategy.
When you have begun your entry strategy and chosen a local alliance partner, continue to the next step, where you will determine your organization's degree of fit with the selected country.
Step 3: The next step in developing your entry strategy is to determine your organization's degree of fit with the selected country. Answer the following questions in your entry strategy:
• How would you make the strategic alliance work? Regulations and laws governing different types of business entities vary considerably from one country to another. What kind of legal business entity do you recommend for your organization in the country of operation? What will be the impact of certain country laws on this type of business entity?
• What are the operational roles and activities of the partners? Design an organizational chart for operations in the country. Explain why you have chosen this organizational structure.
• What will be the likely impact of the country's culture and geography on your organization, the value-chain activities that are being relocated to the country, and the growth in sales of your organization's products in the country? Review Globalizing the Management Model for depth of understanding.
You may submit your entry strategy (Steps 2-3) in the box below for feedback. In the next step, you will begin your marketing strategy.
Step 4: Now that you have developed an entry strategy and determined your organization's degree of fit within the selected country, you will create a marketing plan.
In addition to relocating certain activities in the value chain to the selected country, Gustavo wants to evaluate the country for its suitability as a market for your organization's products. Review Target Markets for help with this evaluation.
Develop a 6-7 page marketing strategy for the industry in which your organization belongs. Your marketing strategy should incorporate the components described here and in Steps 5-6 below.
The first step in developing your marketing strategy is to identify and assess the following components:
• your organization's main competitors in the country
• the actual and potential size of the market
• market and segment growth
• market and segment profitability
• underlying costs and cost structure
• distribution systems channel
When you have addressed these components in your marketing strategy, continue to the next step, where you will assess the characteristics of your organization's potential customers in the selected country.
Step 5: As you continue developing your marketing strategy, the next step is to make recommendations to Gustavo on particular aspects of your organization's marketing strategy that would be tailored to the country's market for your organization. Specifically, address the following components:
• marketing mix in the country
• promotional practices
• pricing
• branding strategies
When you have assessed the characteristics of your organization's potential customers in the selected country, continue to the next step, where you will assess your organization's use of web networks and social media for e-marketing.
Step 6: In the final step of developing your marketing strategy, you will assess your organization's use of web networks and social media for e-marketing, given the unique ways in which computers, smartphones, the Internet, and social media are used among the country's consumers. As you undertake this assessment, read more about management, strategies, tools, and practices in e-marketing. To complete this step, address the following components:
• Prepare market share estimates for your product or service in the country and revenue forecasts for the near term (6-12 months) and longer term (2-4 years).
• Provide proper justification for your projections, such as prior industry performance in terms of unit sales, market size, and profit margins in the country.
You may submit your marketing strategy (Steps 4-6) in the box below for feedback. In the next step, you will work on financial value and strategy implementation.
Step 7: As you may recall from your meeting with Gustavo, he wants your estimate of the timeframe needed to break even and implement your strategy. As you continue developing your business plan for entering the new country, assess any financial and accounting challenges by answering the following questions:
• Examine the financial statements of competitors in the country. Are there any differences in terms of language, currency, or the type of statements (income statement, balance sheet, financial statement format, extent of footnote disclosures, and the underlying GAAP [generally accepted accounting principles]) between your organization's reports in the United States and the reports required by law in the country? Review The Role of Similar Accounting Standards in Cross-Border Mergers and Acquisitions.
• What are the challenges your organization may face in the country because of its accounting standards?
• What is the required investment for relocating your organization's value-chain activities to the country for years 1, 2, and 3? What are the projected savings, if any, for the same time periods? Provide justification for your estimates.
• What are your estimates of revenue projections for your company in the country for years 1, 2, and 3?
After you have assessed the financial and accounting challenges associated with entering the new country, continue to the next step, where you will address strategy implementation and control measures.
Step 8: The next step of developing your business plan is to address strategy implementation and control measures by discussing the following components:
• Specify the major factors to be tracked for strategy effectiveness using the four perspectives of the balanced scorecard: learning and growth perspective, business process perspective, customer perspective, and financial perspective.
• Specify how your organization will monitor and report issues with joint-venture partners, subsidiaries, suppliers, and distributors in the country.
When you have addressed strategy implementation and control measures, continue to the next step, where you will make recommendations about your organization's governance and accountability standards
Step 9: As you continue developing your business plan, next make recommendations about your organization's governance and accountability standards by answering the following questions:
• How do your organization's governance and accountability and code of conduct or ethics address risks such as bribery and corruption? Search for Transparency International's Corruption Perceptions Index online and make recommendations for changes to the code, if needed, for operations in the selected country.
• Do your organization's corporate social responsibility (CSR) policies address local community interests, stakeholders' concerns, and supplier relationships? Make recommendations for CSR changes to the program, if needed.
Step 10: Your final report should include your discussion from Steps 7-9 above, an overview of your findings from Week 1 and Week 2, and an executive summary guide