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The most viable foreign market to invest in between China and UK - Essay Example

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This report has been written in an attempt to provide advice that is of axiological importance to a Canadian pharmaceutical company. It has thus been concluded that the foreign market of choice is China and the mode of entry into the new market is by joint venture…
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The most viable foreign market to invest in between China and UK
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Download file to see previous pages The paper tells that the world is rapidly being converted into a global village. It is rapidly becoming cheaper and faster to communicate and transact business worldwide. Many companies are seizing the opportunities that arise from the technological advances occurring worldwide. Companies are expanding beyond their local zones and investing in other lucrative markets overseas and making huge profits running into billions of US dollars. These they achieve by acquiring new foreign markets for their products and taking advantage of cheaper production costs that may be in that foreign country and eliminating transport costs that would arise from transporting products from the original country of production. The firms are also better placed in accessing other markets that are close to the new market. This Canadian firm is no different. There are ready foreign markets overseas which would see the firm increase its profit margins and market share. It is therefore of great importance that the company acquires new markets and increases its profit margins. In choosing the best foreign market in which to invest, Porter’s diamond model was used. According to the model, there are four attributes of a nation that shape its business environment in which firms compete for market share. They include: factor endowments (conditions); demand conditions; supporting and related industries; and firm’s structure, strategy and rivalry. Foreign market analysis revealed that; China has a booming economy with good infrastructural development while UK has falling business investment and rising unemployment rates. ...
oduction costs that may be in that foreign country and eliminating transport costs that would arise from transporting products from the original country of production. The firms are also better placed in accessing other markets that are close to the new market. This Canadian firm is no different. There are ready foreign markets overseas which would see the firm increase its profit margins and market share. It is therefore of great importance that the company acquires new markets and increases its profit margins. c) Choice of market In choosing the best foreign market in which to invest, Porter’s diamond model was used. According to the model, there are four attributes of a nation that shape its business environment in which firms compete for market share. They include: factor endowments (conditions); demand conditions; supporting and related industries; and firm’s structure, strategy and rivalry (drypen, 2010). 1) Factor Endowments While examining factor endowments it is worth noting that any company can obtain certain non key factors like raw materials and unskilled labour rending these factors useless when generating a competitive advantage. Certain specialized factors like technology, communication infrastructure are more useful while creating a competitive advantage in the new market. This is because these specialized factors are more difficult to duplicate (drypen, 2010). Both China and UK have well developed transport and telecommunication infrastructure. According to human Resource Management Guide (2012), UK’s unemployment rate has from by 0.4% over the year to 8.4% up from 8.0%. The Chinese economy on the other hand is booming. According to Morison (2011), China is one of the fastest growing economies emerging as both a trade and economic power. The ...Download file to see next pagesRead More
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