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The Challenges of Foreign Market - Case Study Example

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The following paper 'The Challenges of Foreign Market' presents globalization which influences the way companies to do business both internally and externally due to international competition operating outside of the domestic market is always a significant challenge…
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The Challenges of Foreign Market
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Download file to see previous pages Any multinational company is exposed to risks such as change of foreign currency exchange rate, commodity prices, and interest rates because it denominates its transactions in foreign currencies. That’s why there is also some uncertainty in future earnings, liabilities and assets values.
Therefore, before taking a decision on the country of entry, a profound analysis of its current political and economical situation is to be performed. According to Kotler and Armstrong (351-361), a decision on whether to enter a foreign market should be based on a profound analysis of potential risks and opportunities, as well as the company’s internal resources.
The company is a Limited Liability that exports roasted and ground coffee: directly purchases coffee beans from the manufacturer in top two coffee-producing countries - Brazil and Colombia (National Geographic), and then sell overseas. The given Export Management Company (EMC) would be an independent firm to function as an exclusive export sales department, representing the product along with various non-competitive manufacturers and operating on a commission basis. The company is decided to be structured as an EMC because this exact structure is recommended for companies with no or little export experience (Joyner).
Guisinger suggests that the adaptation strategy is the optimal one for companies starting a business in unfamiliar or unstable business environments. Therefore, our company should use the adaptation strategy when entering the market in order to coordinate the company’s operation with the existing market environment. The company establishes a strong foreign distribution system, hires experts on business conditions abroad and focuses on Ukraine as a country to export into further opportunities for growth. ...Download file to see next pagesRead More
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