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MIB - Essay Example

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Management of International Business Introduction The global trend by major business operators to venture in international business through operation of multinational chain stores poses challenges to such business operators that are differ importantly from business within national boarders…
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Download file to see previous pages Wall-Mart Stores operate as chain discount retail stores spread through all 50 states in the US with the growth based on basic but unique operational principles (Ingram, Yue & Hayagreeva 2010). The industry has expanded to incorporate chain stores, multinational operations and lately, the introduction of e-commerce. With success in other foreign markets like Mexico Wall-Mart has potential to expand to the fast growing Asian market like Malaysia amidst technological and logistic challenges in the industry. This paper considers the potential of expansion into this market by analyzing the company’s Corporate Social Responsibility (CSR) and carrying out a PEST analysis of Malaysia. This will be used to examine the potential for expansion into the foreign market and the possible risks that may be faced by expanding into such a market. The analysis bases on the entry mode of foreign market servicing strategy that gives best strategic expansion into foreign market. PEST analysis of Malaysia Political analysis When considering the political system of a nation some of the important elements include the responsiveness of the system to corruption, tribalism (nepotism m), collusion and democracy (if any) and then the overall stability of the government system as noted by Knol (nd). This may include the legislature, judiciary and the executive arms of government. In this case the factors leading to government stability are manifested through the electoral systems, clear separation of powers and the strength of the justice system. The federal constitution monarchy in Malaysia has been able to work out a stable government with reduced political risks manifested (EDC, 2010). The political system has been able to maintain peace with the neighbourhood as well as contain internal conflicts that are a sign of low political risk to foreign investment according to the BBC (2010) and the Encyclopedia of the Nations (2010). As one of the current indicator of business security, political risk manifests in form of internal or border strife, terrorism or other unseen political matters. The Malaysian situation has witnessed internal strife between the major communities in the country (the Malays, the Chinese, and the Indians) that easily cause riots in the country (Knol nd). An example of such a strife is one that resulted from how the word “Allah” was used hence sparking up nationwide strife in most if not all government system. However, since the worst 1969 strife the communities co-exist easily in spite of the differences in the areas they live in. This means that in hiring labor the company must equally consider job distribution among these communities in terms of type and number of positions to avoid rejection by the locals. In terms of national political governance, the country has established strict immigration controls that may have an implication on foreign traders. Movement into the country may therefore require early arrangements to avoid possible hindrance of movement especially where outsourced employees are of foreign origin. The country is ruled under political monarchial government consisting representation of members from all communities in the country but mainly run by the Malays under the United Malays National Organization (UMNO) and other ...Download file to see next pagesRead More
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