Key Concepts of Business of Asia - Assignment Example

Business of Asia Answer In modern world, countries across the world are highly interdependent with each other. There is a constant undercurrent between all the countries across the world. Over the years, growth and future prospects of the Asian continent has attracted global investments. Various multinational organizations across the world have come to the continent and invested their money. But Asian business scenario is not at all free from the mistakes or wrong policy making. Developed nations, especially the countries of Euro zone are facing sovereign debt crisis. It has occurred due to the saturation of the European economy. This factor has gone wrong in the Asian venture also. Various Asian countries have not been able to learn from the European context (Lee, Mason, Park, 2011, pp. 78-81). The venture has failed to identify various additional sources of the future fiscal strain. Ageing population and inadequate social safety net had made the situation bad for the venture. Demography is an important factor and it has significant influences on the business. Ageing population is not at all suitable for the appropriate labour power but unfortunately the continent is facing this problem and it has gone wrong for the venture. It has reduced the customer base also. Reducing customer base is a reason for which the venture went wrong. According to the data of Asian Development bank, currently the share of Asia in the global population is 56%. But this trend will decline in future and it will reduce up to 50% (Asian Development Bank, 2011). But the venture did not arrange provisions for this kind of decline. This thing has significantly gone wrong. Birth rate of the continent is falling drastically. By 2050, one fifth people of the continent will be above the age of 65 years. Several Asian economies will face this problem. But over the years various ventures have not taken enough precautions for this problem. So it has gone wrong. The continent has widening inequality as far as the economic growth is concerned (Asian Development Bank, 2012). Some countries in the continent enjoy significant economic growths. On the other hand some countries face acute problems of low growth, inflation and high fiscal deficit. The absence of uniformity in the various countries is also a reason for which venture went wrong. Various business organizations have failed to come up with common business strategies for all the Asian countries. It has affected their business strategies negatively (Bisley, 2007, pp. 603-625). Various ventures have failed to manage multi dimensional economic situation properly. They have struggled to address varying nature of the Asian economies. Widening inequality also went wrong for the Asian venture. Demographic movements and economic growth share a close relationship between them. It poses lots of threats for the venture. Policymakers in Asia have failed to address the issues related demographic changes. This thing has gone significantly wrong. Regional economic integration is a form of agreement by which countries in a geographic location reduce tariff and non tariff barriers. It encourages smooth flow of goods and services across various countries. Theoretically regional trade agreements reduce trade barriers across the borders but in practical the matter is not that much smooth. Free trade areas eliminate all the barriers for the products and services which are traded across the borders. Economic integration has made the all the Asia countries significantly dependent on each other. This factor has gone wrong for venture (The Economists, 2011). Due to high dependency poor trade performance of one country has adverse implications on the economies of other countries. This economic integration has made some countries significantly profitable on the other hands some countries have become the losers. Over the years low cost producers within the free trade area have failed replace the high cost domestic producers. It has gone significantly wrong for the venture. In the case of Asia, The Association of Southeast Asian Nations looks after various trades’ related issues (Carney, 2008, pp. 67-69). But over the years the governing body has failed to address various trade related issues in the continent. The organization has failed to act properly (Dutta, 2009, pp. 78-83). This thing also went wrong for venture. Fragmented production process in Asia has caused significant problems for the ventures. This kind of production process is not at all suitable for any venture. Regional economic integration has become more challenging due to the complex procedure of FTA. It had increased transaction costs for crossing the borders. APEC has lost its effectiveness. With the help of this ventures are not getting any benefits. This is a reason for which venture have gone wrong. Long term future orientation is missing in the market. This thing has gone wrong for the ventures in the Asian markets. Shift from the managed economy to entrepreneurial economy has not gone well with the Asian ventures (Daquila, 2007, pp. 35-37). Answer 2 Business venture has multidimensional aspects. Success and failure of business cannot be dependent on any specific reason (Hill, 2011, pp. 102-105). In the above answer it is clearly evident that, there are many reasons for which venture failed. It is very difficult to prioritize the reasons of failures. All above reasons identified for the venture failure have enough significance. Population is the base of workforce and customer base. Without it a venture cannot succeed. On the basis of this reason business efficiency and productivity can be increased. Demography of population is a pillar and one the most fundamental requirements for the business ventures. So, there is no scope of ignoring the reason of demographic change. Significance of the population demography cannot be ignored. In the above answer sovereign debt crisis and its effects has been identified as one of the reason. The reason has enough effect on the failure of venture in Asia. Investors of the Euro zone have been hampered significantly. It has resulted in the lowering trend of business investments in the Asian market. Various ventures, (especially dependent on the European funds) felt the pressure and succumbed under the pressure. This argument is clearly indicating the importance or impact of the reason. This reason cannot be avoided for the failure of business. Widening economic inequality has been identified as one of the reasons of the venture failure. Economic uniformity across the large region is significantly important for any successful business. But in the Asian market that uniformity is missing. Absence of economic uniformity is making the situation worse for the business ventures. Managers of the various organizations are facing problems to come up with suitable strategies. This factor has rightly justified the importance of this reason behind the failure of venture. Importance and significance of this reason is self reflective so it cannot be ignored. Regional economic integration also has been depicted as one of the reasons for venture failure. This reason has vast significance as far as the failure of venture is concerned. This reason increases the scope of venture. It makes one venture boundary less. As far as the free trade is concerned regional economic integration plays important roles. But challenges due to this idea are significantly complex in nature. Important and complex nature of the reason has made it highly responsible for the business failure. Impacts of this reason cannot be denied at any point of time. In any kind of international venture, governing bodies or policy making authorities play important roles. Here in this study, Association of Southeast Asian Nations and APEC have been identified as possible reasons for the venture failure. These two organizations have not been able to settle various issues related with Asian free trades in an amicable manner. Their roles and responsibilities were not at all suitable for the good business environment. So ineffectiveness of the two governing bodies has been rightly pointed out. They are not at all less important reasons for the venture failure. Long term orientation is one of the basics needs of the business. Absence of this factor is not at all permissible. That is why this reason has been chosen for the failure of venture. Over the years various business experts across the countries have given significant focuses towards the long term business orientation. Therefore, significance of this reason cannot be compared with any other reasons of venture failure. This reason has its own impacts on the failure of ventures. Shift in the economic outlook has been identified as one of the reasons for the business failure in Asia. When rest of the continents are looking towards a more entrepreneurial economy, Asian economy was stuck with managed economy (Anagnost, Arai & Ren, 2013, pp. 67-70). It impacted the whole economic scenario adversely. It has made the Asian economy over dependent on the jobs. Independent or entrepreneurial mindset was missing. This absence of entrepreneurial mindset has been chosen as the reason of venture failure. This reason has significant importance as far as the venture failure is concerned. All the above arguments are clearly indicating that no reason is more important or more significant than other reasons. All the reasons of failure have their own significances and those significances cannot be prioritized or compared with each other. References Anagnost, A., Arai, A & Ren, H. (2013). Global futures in East Asia: youth, nation, and the new economy in uncertain times. California: Stanford University Press. Asian Development Bank. (2011). Why does population aging matter so much for Asia? population aging, economic growth, and economic security in Asia. Retrieved from: http://www.adb.org/publications/why-does-population-aging-matter-so-much-asia-population-aging-economic-growth-and-econ. Asian Development Bank. (2012). Asian development outlook 2012, confronting rising inequality in Asia. Retrieved from: http://www.adb.org/publications/asian-development-outlook-2012-confronting-rising-inequality-asia. Bisley, N (2007). East Asia’s changing regional architecture: Towards an East Asian Economic Community? Pacific Affairs, 80/4, pp. 603-625. Carney, M. (2008). Asian business groups: context, governance and performance. London: Elsevier Daquila, T. C. (2007). The transformation of southeast Asian economies. New York: Nova Publishers. Dutta, M. (2009). The Asian economy and Asian money. London: Emerald Group Publishing. Hill, C.W.(2011). International business: competing in the global marketplace. New York, McGraw-Hill. Lee, S., Mason, A., Park, D (2011). Why does population aging matter so much for Asia? Population aging, economic growth, and economic security in Asia, ADB Economics Working Paper Series, No. 284, October, Asian Development Bank. The Economists. (2011). The flight from marriage. Retrieved from: http://www.economist.com/node/21526329. Read More