Mgt 448 Week 4 Country Risk And Strategic Planning Analysis
Country Risk and Strategic Planning Analysis
November 4th, 2013
Team A
Sharon Bubak, Scott Kappers,
Phill Campagna, LeoNita Bigos-Erickson
MGT 448 – Week 3
Natalia Enders
Political, legal, regulatory risks, exchange and repatriation of funds risk, competitive risk assessment as well as tax and double taxation must be considered with a business plan, especially when going international .
Australia has similar liberal political and legal values, similar to the UK and the United States. Policies and laws are implemented to protect both the people and the government. Laws and regulations are set in place and reflect both criminal and noncriminal punishments. The government is set up similar guidelines in terms …show more content…
of a Queen and two Houses. A lower house serves up to three terms and the upper house serves up to six terms. Do to laws and regulations changing from state to state, one must review these regulations for the particular state in which the business will be held.
Legal systems in Australia have been known to be tainted by corruption and often support non legitimate aspects. This can affect bottom lines for business due to large cash payouts being required to maintain business. In the US these types of payments are referred to as shakedowns. Organized crime and terrorists are often responsible for such actions .
Business policies such as HR are often similar in Australia as they are in the US. HR is still plays a similar role as it tries to keep corporations out of court, provide a fair playing field for employees and holds management accountable. Social regulations such as diversity and employee ratios are upheld in this area of the business model.
The exchange of funds and repatriation will be dealt with by the laws and regulations associated in Australia. Funds will be used in the current currency issued in Australia. In this instance with the US dollar being a higher value than the current currency used in Australia, the US investor will procure a larger risk. The Australian contractors and government will benefit from the transaction .
The risk assessment will provide crucial information in which will influence the decision to start the business process. This crucial information will include:
Innovation, Sources of Innovation, Technology, Knowledge, Production Unit, Organizational Principles, Time, Uncertainty, Process of Accumulation, Change and Diffusion, Competition and Policy of Objectives, with the information contained in these reports we can determine if the business venture will succeed or fail .
Taxation and double taxation can be a concern a well. Australia has a DTA as a treaty in international law. The DTA is a Double Taxation Act. Many aspects of the Act read very similar to the laws in the United States. The Act breaks down the areas of distribute and allocate aspects as well as resident and non-resident aspects. This 35 page document identifies all of the in’s and outs of the DTA Act. State and government tax apply to all individuals working in Australia as well as business owners. The jurisdiction tax laws may vary and may also include taxation by the originating country .
When looking at the wine industry in Melbourne Australia there are a few things that really need to be paid close attention to such as the product, place, price, and how we will promote the product. Looking at the place we have determined that Melbourne will be where we will look at distributing from. Our product is an imported wine that is produced in the U.S we will determine our pricing based on what the current market will allow due to the high concentration of wineries in the Australia area. Promotions we will look at different ways to differentiate our products from the currently produced local brands. Some of the distribution and supply chain risks could include but not be limited to what if we cannot supply enough wine to our distributors locally in a timely fashion grape production goes down. Next we will look at the physical or environmental challenges to entering this market. Due to the fact that this will be an imported product the environment already warrants the production and distribution of wine products by the current local businesses and we will only fight our environmental challenges from the states. When looking at what some of the social risks include the amount of alcohol that is consumed in a social environment that it becomes a high health risk in the country. Looking at the cultural aspect of doing business in the country it becomes a risk because of the lack of diversity in the country. Looking at hiring locally may pose as a problem because of this reason. Technology and cyber risks are a huge concern in the globalization some of the reasons include stolen identities, credit card numbers being stolen, and other private information being distributed. This is happening because of the great use of computer traffic to place orders, ship orders, and exchange information. Even though this is the way of the future it is a very big concern with doing business in a different country. In order to make this a good business venture we need to make sure that we are cautious with the decisions that we make and where we get our information to make the decisions .
Define and clarify mission and objectives Our mission is to offer the finest award-winning vintages and varieties of wines to our global neighbors, while sustaining a green product, culture, and environment.
“Our main objective will be to target our marketing strategies towards Prospective Global Companies by introducing incentives that entice our target market to consider our Company to meet their current supply requirements. These strategic incentives will include, but are not limited to, offers such as product discounts and free shipping. We will also offer prospective clients prices competitive to the current industry standard, but with added emphasis on quality, service and value”.
SWOTT for Australia
Strengths
• Up surging economy with a GDP on equal footing as the foremost European economies.
• Prominence on restructuring, lowering inflation, a housing market bloom, growing global expansion.
• The budget in the black for over 10 years due to revenue growth.
• Key exporter of agronomic products, mined minerals, numerous metals, and oil
• Exceptional integrated telecommunication systems.
• “The strength of Australia’s economy has been highlighted in recent years by its ability to withstand a number of internal and external events, including a major drought, a housing boom and the Asian financial and economic crises” .
Australia is a recent growing market for wine production but is increasing with each season with the assistance of imports from various wineries across the globe. Australia is also branching out with the global exportation of their wine inventory.
Weaknesses
• “Socially acceptable programs for information technology exchange, vertically and horizontally specialized cross committees on the government level (About Australia, 2012)
• Implementation of environmental laws and economic regulations and the application of the regulations that accompany them too.
Opportunities
• Australia has an approachable business governing environment. According to the World Bank (About Australia, 2012), “Australia is the fastest place in the world in which to start a business, with regulatory procedures taking just two days”.
• Has minimal constraints on product markets and imports of all of the 30 member organization, the lowest amount of publicly owned businesses and few restrictions impacting business regulations on economic performance.
• Australia lately moderately relaxed the banking regulations, restructuring interest rate limits and the allowance of 16 foreign banking institutions, five from the United States including Chase, Bank of America, and Citibank into the retail banking sector providing competition for what was a quite well-established banking system .
Threats
Weather or agricultural catastrophes; hurricanes, tidal wave, flooding, drought and infestations.
Slow-down of import demand, and a solid currency thrust the trade deficit upwards in a positive reflection recently .
Economy of alliances having an effect on Australia’s economic stability; terrorism, war, violence, and retaliation for acts of terror .
Competition of similar trade, production, advertising, and marketing
Trends
Offering new sweeter dessert and sparkling wines; pink moscato, pink reisling, sweet sparkling proseco, and sweet white.
Buy six and get one free at food and wine festival
Sample at The Social Dinner Club and local liquor establishments
Content Marketing – 96% of all marketers in Australia use this type
Social Media Advertising Platforms
Mode of Entry
Direct exporting will be one of the options for the mode of entry into Australia. With this mode we will be able to maintain control over our brand and our operations. Indirect exporting is the other option. With this option we would hire a local agent to handle the exporting on our behalf. Other ways for us to indirectly export our product would be piggybacking, export management houses, consortia, and trading companies . By piggybacking our wine with another company gives the opportunity to use their distribution and logistics, saving overhead costs for us and them. An export management house is a resource that offers a wide range of exporting services, by utilizing this resource our company can be rest assured that the exporting rules and regulations are followed. If we decide to group together with other companies to market our product, whether our product is related to their products or not, we have formed consortium. By forming the consortium we will be able to save marketing costs and other overhead costs by combining resources with our partners. Trading companies have been around centuries and can be dated back to the British colonies and others. In today’s market trading companies provide support services such as distribution, insurance, billing, and overseas manufacturing. By employing a trading company we will be able to save on overhead costs as well as ensure that rules and regulations will be followed.
Running parallel with the exporting our wine, we will also be running and maintaining a web site where patrons can purchase our product worldwide. This will break down the barriers of entering into other countries. This move makes sense with the trends of ecommerce in today’s society.
Control and evaluation We will conduct inventory control reporting, sales reports, and expense reports. We will use these reports to conduct quarterly reviews to analyze the products performance. The Quality Control division will maintain hourly checks on the product to ensure our product lives up to our standards.
Contingency plan
Contingency plan will be to invest in a location in Australia, which will be a foreign direct investment. By doing this the company will be able to familiarize itself with the local market and be able to adjust the marketing, pricing, and product accordingly. This will eliminate the double taxation possibilities on our product if we exporting. We would also be running the web site in conjunction with the localization. By doing a foreign direct investment we will no longer be in need of support services to export our product.
Works Cited
Tellus Consultants .
(2011). Retrieved November 4, 2013, from SWOT Analysis for Participatory Research in the Pacific: http://www.tellusconsultants.com/swot.html#Weaknesses asia Travelinfo.com. (2012, March 13th). Retrieved November 4th, 2013, from Australia 's Counrty Information: http://www.asiatravelinfo.com/australia/
About Exporting. (2013, January 3rd). Retrieved November 3rd, 2013, from Uk Trade & Investment: http://www.ukti.gov.uk/export/exporting.html
Australia Government. (2013). Retrieved November 4th, 2013, from australia.gov.au - your connection with government: http://australia.gov.au/about-australia/our-government
Australian Government - Australian Taxation Office Legal Database. (2013). Retrieved November 3rd, 2013, from Legal Database: law.ato.gov.au
Australian Government Department of Foreign Trade. (2013). Retrieved November 4th, 2013, from Trade: dfat.gov.au/trade/
Marketing Teacher Ltd. (n.d.). Modes of Entry into International Markets. Retrieved October 31, 2013, from Marketing Teacher: http://www.marketingteacher.com/lesson-store/lesson-international-modes-of-entry.html
Pulizzi, J. (2013, February 25th). Content Marketing in Australia: 2013 benchmarks, budgets, and trends (research report). Retrieved November 2nd, 2013, from Content Marketing Institute:
contentmarketinginstitute.com/au
November 4th, 2013
Team A
Sharon Bubak, Scott Kappers,
Phill Campagna, LeoNita Bigos-Erickson
MGT 448 – Week 3
Natalia Enders
Political, legal, regulatory risks, exchange and repatriation of funds risk, competitive risk assessment as well as tax and double taxation must be considered with a business plan, especially when going international .
Australia has similar liberal political and legal values, similar to the UK and the United States. Policies and laws are implemented to protect both the people and the government. Laws and regulations are set in place and reflect both criminal and noncriminal punishments. The government is set up similar guidelines in terms …show more content…
of a Queen and two Houses. A lower house serves up to three terms and the upper house serves up to six terms. Do to laws and regulations changing from state to state, one must review these regulations for the particular state in which the business will be held.
Legal systems in Australia have been known to be tainted by corruption and often support non legitimate aspects. This can affect bottom lines for business due to large cash payouts being required to maintain business. In the US these types of payments are referred to as shakedowns. Organized crime and terrorists are often responsible for such actions .
Business policies such as HR are often similar in Australia as they are in the US. HR is still plays a similar role as it tries to keep corporations out of court, provide a fair playing field for employees and holds management accountable. Social regulations such as diversity and employee ratios are upheld in this area of the business model.
The exchange of funds and repatriation will be dealt with by the laws and regulations associated in Australia. Funds will be used in the current currency issued in Australia. In this instance with the US dollar being a higher value than the current currency used in Australia, the US investor will procure a larger risk. The Australian contractors and government will benefit from the transaction .
The risk assessment will provide crucial information in which will influence the decision to start the business process. This crucial information will include:
Innovation, Sources of Innovation, Technology, Knowledge, Production Unit, Organizational Principles, Time, Uncertainty, Process of Accumulation, Change and Diffusion, Competition and Policy of Objectives, with the information contained in these reports we can determine if the business venture will succeed or fail .
Taxation and double taxation can be a concern a well. Australia has a DTA as a treaty in international law. The DTA is a Double Taxation Act. Many aspects of the Act read very similar to the laws in the United States. The Act breaks down the areas of distribute and allocate aspects as well as resident and non-resident aspects. This 35 page document identifies all of the in’s and outs of the DTA Act. State and government tax apply to all individuals working in Australia as well as business owners. The jurisdiction tax laws may vary and may also include taxation by the originating country .
When looking at the wine industry in Melbourne Australia there are a few things that really need to be paid close attention to such as the product, place, price, and how we will promote the product. Looking at the place we have determined that Melbourne will be where we will look at distributing from. Our product is an imported wine that is produced in the U.S we will determine our pricing based on what the current market will allow due to the high concentration of wineries in the Australia area. Promotions we will look at different ways to differentiate our products from the currently produced local brands. Some of the distribution and supply chain risks could include but not be limited to what if we cannot supply enough wine to our distributors locally in a timely fashion grape production goes down. Next we will look at the physical or environmental challenges to entering this market. Due to the fact that this will be an imported product the environment already warrants the production and distribution of wine products by the current local businesses and we will only fight our environmental challenges from the states. When looking at what some of the social risks include the amount of alcohol that is consumed in a social environment that it becomes a high health risk in the country. Looking at the cultural aspect of doing business in the country it becomes a risk because of the lack of diversity in the country. Looking at hiring locally may pose as a problem because of this reason. Technology and cyber risks are a huge concern in the globalization some of the reasons include stolen identities, credit card numbers being stolen, and other private information being distributed. This is happening because of the great use of computer traffic to place orders, ship orders, and exchange information. Even though this is the way of the future it is a very big concern with doing business in a different country. In order to make this a good business venture we need to make sure that we are cautious with the decisions that we make and where we get our information to make the decisions .
Define and clarify mission and objectives Our mission is to offer the finest award-winning vintages and varieties of wines to our global neighbors, while sustaining a green product, culture, and environment.
“Our main objective will be to target our marketing strategies towards Prospective Global Companies by introducing incentives that entice our target market to consider our Company to meet their current supply requirements. These strategic incentives will include, but are not limited to, offers such as product discounts and free shipping. We will also offer prospective clients prices competitive to the current industry standard, but with added emphasis on quality, service and value”.
SWOTT for Australia
Strengths
• Up surging economy with a GDP on equal footing as the foremost European economies.
• Prominence on restructuring, lowering inflation, a housing market bloom, growing global expansion.
• The budget in the black for over 10 years due to revenue growth.
• Key exporter of agronomic products, mined minerals, numerous metals, and oil
• Exceptional integrated telecommunication systems.
• “The strength of Australia’s economy has been highlighted in recent years by its ability to withstand a number of internal and external events, including a major drought, a housing boom and the Asian financial and economic crises” .
Australia is a recent growing market for wine production but is increasing with each season with the assistance of imports from various wineries across the globe. Australia is also branching out with the global exportation of their wine inventory.
Weaknesses
• “Socially acceptable programs for information technology exchange, vertically and horizontally specialized cross committees on the government level (About Australia, 2012)
• Implementation of environmental laws and economic regulations and the application of the regulations that accompany them too.
Opportunities
• Australia has an approachable business governing environment. According to the World Bank (About Australia, 2012), “Australia is the fastest place in the world in which to start a business, with regulatory procedures taking just two days”.
• Has minimal constraints on product markets and imports of all of the 30 member organization, the lowest amount of publicly owned businesses and few restrictions impacting business regulations on economic performance.
• Australia lately moderately relaxed the banking regulations, restructuring interest rate limits and the allowance of 16 foreign banking institutions, five from the United States including Chase, Bank of America, and Citibank into the retail banking sector providing competition for what was a quite well-established banking system .
Threats
Weather or agricultural catastrophes; hurricanes, tidal wave, flooding, drought and infestations.
Slow-down of import demand, and a solid currency thrust the trade deficit upwards in a positive reflection recently .
Economy of alliances having an effect on Australia’s economic stability; terrorism, war, violence, and retaliation for acts of terror .
Competition of similar trade, production, advertising, and marketing
Trends
Offering new sweeter dessert and sparkling wines; pink moscato, pink reisling, sweet sparkling proseco, and sweet white.
Buy six and get one free at food and wine festival
Sample at The Social Dinner Club and local liquor establishments
Content Marketing – 96% of all marketers in Australia use this type
Social Media Advertising Platforms
Mode of Entry
Direct exporting will be one of the options for the mode of entry into Australia. With this mode we will be able to maintain control over our brand and our operations. Indirect exporting is the other option. With this option we would hire a local agent to handle the exporting on our behalf. Other ways for us to indirectly export our product would be piggybacking, export management houses, consortia, and trading companies . By piggybacking our wine with another company gives the opportunity to use their distribution and logistics, saving overhead costs for us and them. An export management house is a resource that offers a wide range of exporting services, by utilizing this resource our company can be rest assured that the exporting rules and regulations are followed. If we decide to group together with other companies to market our product, whether our product is related to their products or not, we have formed consortium. By forming the consortium we will be able to save marketing costs and other overhead costs by combining resources with our partners. Trading companies have been around centuries and can be dated back to the British colonies and others. In today’s market trading companies provide support services such as distribution, insurance, billing, and overseas manufacturing. By employing a trading company we will be able to save on overhead costs as well as ensure that rules and regulations will be followed.
Running parallel with the exporting our wine, we will also be running and maintaining a web site where patrons can purchase our product worldwide. This will break down the barriers of entering into other countries. This move makes sense with the trends of ecommerce in today’s society.
Control and evaluation We will conduct inventory control reporting, sales reports, and expense reports. We will use these reports to conduct quarterly reviews to analyze the products performance. The Quality Control division will maintain hourly checks on the product to ensure our product lives up to our standards.
Contingency plan
Contingency plan will be to invest in a location in Australia, which will be a foreign direct investment. By doing this the company will be able to familiarize itself with the local market and be able to adjust the marketing, pricing, and product accordingly. This will eliminate the double taxation possibilities on our product if we exporting. We would also be running the web site in conjunction with the localization. By doing a foreign direct investment we will no longer be in need of support services to export our product.
Works Cited
Tellus Consultants .
(2011). Retrieved November 4, 2013, from SWOT Analysis for Participatory Research in the Pacific: http://www.tellusconsultants.com/swot.html#Weaknesses asia Travelinfo.com. (2012, March 13th). Retrieved November 4th, 2013, from Australia 's Counrty Information: http://www.asiatravelinfo.com/australia/
About Exporting. (2013, January 3rd). Retrieved November 3rd, 2013, from Uk Trade & Investment: http://www.ukti.gov.uk/export/exporting.html
Australia Government. (2013). Retrieved November 4th, 2013, from australia.gov.au - your connection with government: http://australia.gov.au/about-australia/our-government
Australian Government - Australian Taxation Office Legal Database. (2013). Retrieved November 3rd, 2013, from Legal Database: law.ato.gov.au
Australian Government Department of Foreign Trade. (2013). Retrieved November 4th, 2013, from Trade: dfat.gov.au/trade/
Marketing Teacher Ltd. (n.d.). Modes of Entry into International Markets. Retrieved October 31, 2013, from Marketing Teacher: http://www.marketingteacher.com/lesson-store/lesson-international-modes-of-entry.html
Pulizzi, J. (2013, February 25th). Content Marketing in Australia: 2013 benchmarks, budgets, and trends (research report). Retrieved November 2nd, 2013, from Content Marketing Institute:
contentmarketinginstitute.com/au