Management of International Business - Essay Example

After that David Ricardo formulated the principle of comparative advantage, even in the present day it stands true. Such thoughts and ideologies have influenced a number of companies to undertake global expansion. It has forced Governments of different countries to formulate an international trade policy. There was an establishment of customs duty, local sales tax and various other charges were levied on companies taking up international trade. However with the course of time countries understood the importance of international trade.

There were drastic changes took place in the scenario of international trade, most of the countries also made significant changes to their existing trade policies. The report will mainly emphasize on the international expansion of a company based on USA. The company chosen for this purpose is Dunkin’ Donuts and the chosen country of expansion is Australia. In this context, a comprehensive analysis of Australian business environment will be carried out. The regional organization APEC has been chosen and comprehensive analysis of the same will be also done.

The study will then discuss the foreign market entry modes and based on the findings, recommendation regarding the most suitable mode will be made. Table of Contents Country Analysis 4 PESTEL Analysis 4 CAGE analysis 6 Analysis of Regional Organisation 8 APEC: A Brief Overview 8 Functions of APEC 9 Important Factors 9 MNE Analysis 10 SWOT Analysis 11 Industry/Sector Analysis 13 Porter’s Five Forces Model Analysis 13 FMSS/Mode of Entry Analysis and Recommendation 19 References 23 Country Analysis The report highlighted that the chosen company will be Dunkin’ Donuts, which is based in USA.

Now the chosen country of expansion is Australia. The primary rationale behind choosing Australia is that, the MNE, which has been selected for accomplishing the study, does not have their presence in the markets of USA. Hence a comprehensive analysis of the Australian business environment will be carried out. The analysis of the business environment will include a range of aspects that influences the performance and operation of new venture. Moreover the business will have hardly any control over the factors.

Hence the analysis of business environment will include cultural and social influence, regulations, laws, technological infrastructure and also the economic condition. The tools that will be used for the purpose of analysing the country will include PESTEL analysis CAGE analysis. The next half of the project will highlight the PESTEL and CAGE analysis. PESTEL Analysis PESTLE is external environmental analysis tool, which is used for analysing the political, social, technological, economical legal and environmental factors (Henry, 2008, p.51). Political – The political factors corresponds to the political stability of the country where the expansion will be carried out.

Hence the facets that will be mainly analysed include government stability, political changes, tax policies, trade restrictions, and tariffs. Now in Australian context, the government of Australia follows a federal system. The tariffs structures and tax policies are well defined. The Australian government is stable to a large extent. Economical – The economical aspect will analyse gross domestic product, interest rates, unemployment rates, inflation rate, and growth rate of the Australian economy.

The GDP per person is nearly $44,000. The top performing sectors of the country includes Retail,