Changing Regulatory Environment

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Assignment 1: Individual Research and Short Paper—Changing Regulatory Environment

A company’s operating strategy continues to change as the legal and political environment changes. When Argentina’s government assessed a local tax on consumer purchases using credit cards, American Express and other U.S. companies were already facing a highly inflationary market. To make up for lost revenues, American Express began to provide revolving credit products.

In this assignment, you will use the University online library resources and Internet resources to analyze the strategies companies use to deal with a change in regulations.

  1. Select an MNC operating in the U.S. and discuss some of the implications of a changing regulatory environment, then address the following questions:
    1. How do companies evaluate market conditions for potential regulatory changes? Can this type of change be anticipated? Why or why not? What resources do companies have when faced with these types of changes?
    2. Do you think companies should withdraw from the marketplace after new legal regulations are put in place? Explain.
    3. What are the considerations companies account for prior to making any decisions?

 

  1. Select a U.S. company doing business in a foreign market, then address the following questions:
    1. What legal market conditions did the U.S. Company face and how did it deal with them?
    2. Do you think that operating in foreign markets is similar to operating in domestic markets? Why or why not?
    3. How can companies compete and survive in a marketplace despite the threat of legal restrictions and taxation?

Write a 4-pages essay in Word format. Apply current APA standards for writing to your work.
Use the following file naming convention: LastnameFirstInitial_M5_A1.doc.

By Wednesday, June 5, 2013, submit your assignment to the M5: Assignment 1 Drop box.

 

Assignment 2: Course Project Task 5—Risks of Unstable Economic Conditions (IKEA)

For this part of the project, you will examine the legal and economic implications of the strategies used by companies in unstable economic conditions.

Discuss how each of the following factors impacts your chosen MNC:

  1. Issues operating locally
    1. Customers
    2. Legal
    3. Economic
    4. Capital
  2. Issues operating in multinational marketplaces
    1. Governmental regulation from home country
    2. Sourcing products
    3. Import export restrictions
    4. Capital

The risks the client company might anticipate when operating in a changing economic and regulatory environment. Analyze the MNC’s strategy in unstable economic conditions and post your comments to.

 

By Wednesday, June 5, 2013

Module 5 Readings

Early in the week, complete the following:

· Read the overview for Module 5

· From the textbook, International business law and its environment, read the following chapters:

· Regulating Import Competition and Unfair Trade

· Imports, Customs and Tariff Law

· The Regulation of Exports

· From the Argosy University online library resources, read:

· Global food regulatory issues impacting dairy foods. (2006). Dairy Foods, 107(10), 24. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=22840712&site=ehost-live

· Mustokoff, T., & Segal, T. P. (2008). Commentary: Advice for taxpayers with undeclared UBS Swiss bank accounts. Rhode Island Lawyers Weekly. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=bwh&AN=L54444801RILW &site=ehost-live

· Simon, E. Y. (2008). Limited-service brands build on global success. Hotel & Motel Management, 223(3), 36–38. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=30065201&site=ehost-live

· Trottman, M., Williamson, E., & Casey, N. (2008). Children’s product industry put in regulatory bind. Wall Street Journal – Eastern Edition, 251(142), A3. Retrieved from ProQuest database http://proquest.umi.com/ pqdweb?did=1496424611&sid=1&Fmt=2& clientId=11123&RQT=309&VName=PQD

· From the Internet, read:

· London, T., & Hart, S. (2004, August). Reinventing strategies for emerging markets: Beyond the transnational model. Journal of International Business Studies. Retrieved from http://e4sw.org/papers/JIBS.pdf

·

http://myeclassonline.com/ec/courses/AUO_files/AU_img.gifModule 5 Overview (1 of 2)

·

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·

Can and should businesses use a successful strategy for growth across markets? Companies change their operating strategies as the legal and political environment changes. Today companies not only have to pace themselves to keep up with the changing environment, but they also need to “sprint” to stay ahead of the competition.

In 2007, Coca-Cola purchased Glaceau, the producer of Vitamin Water, for $4.1 billion. Coca-Cola purchased the company to boost its declining beverage sales in the U.S. and North American markets. After its rival PepsiCo purchased the Gatorade lineup of Quaker Oats, Coca-Cola was faced with trying to slow the drop-off in its sales. With the acquisition of Glaceau, Coca-Cola expected to increase its share in the noncarbonated drinks market, a market that currently commands double-digit growth. With its foray into the water and energy drink market, Coca-Cola had to ensure compliance with the regulatory requirements governing food and health in international markets. However, the company was already familiar with these regulations because of its other product lines such as Minute Maid Heart Wise. The other issues the company addressed were concerns about the disposable plastic bottles and import and franchise laws.

Module 5 Overview (2 of 2)

 

 

Reinventing Business: Changing Regulatory Environment

Organizations at times find it necessary to reestablish their business in existing markets because some markets may no longer be viable because of changes in existing laws and regulations.

In this module, we will assess the impact of a changing regulatory environment on organizations. For your assignment, you will compare the impact of legal and governmental regulations on an MNC operating in the U.S. and a U.S. company operating in a foreign market. You will also analyze the strategies companies use to deal with a change in regulations.

For your course project, you will investigate the strategies used by companies inunstable economic conditions. You will examine the legal and economic implications of these strategies. You will also investigate issues companies face when operating in multinational marketplaces.

 
 
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Financial Statement Analysis Assignment 3

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May the Force Be With You: Wide-Moat Salesforce.com Is the Newest Software Empire The market is discounting growth opportunities and operating leverage for this software leader.

 

Executive Summary

Salesforce.com has evolved from a salesforce automation point vendor to a full-fledged cloud-based

customer relationship management, or CRM, software behemoth. The company has been the key

forerunner for software as a service, or SaaS, and we believe the firm is among the most advantageously

positioned companies in software to capitalize on the ongoing secular migration to the cloud. We think

the market is underappreciating the opportunities Salesforce has to not only grow its business via its

existing products, but also through greenfield opportunities. Salesforce has generated consistent,

annual share gains across each of its product buckets, yielding leadership positions in salesforce

automation (45% share), customer service (18%), marketing (12%), and overall CRM spending (20%).

 

We believe enterprises will increasingly look to consolidate application spending around full-featured

suites, leaving Salesforce as the most likely beneficiary in the CRM market, propping up significant top-

and bottom-line growth for several years. Beyond growth opportunities, we revisit the economics of

software as a service (introduced in our 2015 Observer The SaaS Is Greener on the Other Side: The

Economics of Cloud Application Software Companies) and Salesforce.com’s path to operating leverage.

 

Key Takeaways

× Despite Salesforce.com’s abundance of success in the cloud-based customer relationship management

market, we believe the market underappreciates and underestimates the remaining CRM opportunity.

Salesforce has the most complete cloud-based customer relationship management suite to date,

including a network of applications around salesforce automation, customer service, digital marketing,

and e-commerce (via the recent $2.8 billion Demandware acquisition). This breadth should only

propagate the firm’s ability to land large, multiapplication deals.

× We are encouraged by the steps Salesforce has taken to add functionality to its applications. The firm is

also branching out into new verticals, and we see ample opportunity for the firm’s platform-as-a-service

offerings in addition to newer products around the “Internet of Things” and artificial intelligence,

including the firm’s recent announcement of the Einstein AI platform.

× Although many of Salesforce.com’s new initiatives contribute minimal revenue today, we believe the

connected device boom and the secular trend toward machine learning and intelligent applications

should yield ample opportunity for the firm’s Internet of Things and Einstein offerings.

 

Companies Mentioned

Name/Ticker

Economic

Moat

Moat

Trend

 

Currency

Fair Value

Estimate

Current

Price

Uncertainty

Rating

Morningstar

Rating

Market

Cap (Bil)

Salesforce.com CRM Wide Positive USD 98 75.06 High QQQQ 50.98

Morningstar Equity Research

25 October 2016

 

 

Contents

2 Overview of Salesforce’s Moat

3 Sizing Up the CRM Opportunity

9 Sales Cloud

14 Service Cloud

19 Marketing Cloud

24 Commerce Cloud

29 Summing the Parts

30 PaaS and Beyond

34 SaaS Economics and Valuation

 

Rodney Nelson

Equity Analyst

+1 312-244-7298

[email protected]

 

 

 

 

 

 

 

 

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Wide-Moat Salesforce.com Dominates in CRM

Salesforce.com has evolved from a salesforce automation point vendor to a full-fledged cloud-based

CRM software behemoth. The company has been the key SaaS forerunner, and we believe it is among

the most advantageously positioned companies in software to capitalize on the ongoing secular

migration to the cloud. In our view, Salesforce.com has established a wide moat based on two sources:

customer switching costs and network effect. Given the proximity to revenue-generating activities and

the interconnectedness of its products, we believe CRM applications have a high degree of switching

costs, while the use of multiple applications from the same vendor can have network-effect-like benefits.

 

We believe the Sales Cloud for salesforce automation bears the greatest degree of switching costs, a

market in which Salesforce boasts upwards of 40% market share. Sales are the lifeblood of any

organization, and Salesforce.com’s best-in-breed solution allows representatives to manage and track

their activity within their deal pipeline, while the product helps automate activity while dictating the

best course of action with a given prospect.

 

We also believe the service (for multichannel customer service management), marketing (for

multichannel campaign management, targeting, and analytics), and commerce (for business-to-

consumer digital commerce platform build-outs) clouds each bear a meaningful degree of switching

costs, particularly as vendors look to take a unified approach across multiple channels to engage and

retain customers. To this end, 70% of Salesforce.com’s top 200 customers use four or more of its cloud

products, up from just 13% of its top 40 customers four years ago (Salesforce also offers several

products geared toward application development and greenfield opportunities, housed under the App

Cloud). We believe this growth in attach rates also serves as evidence for our positive moat trend rating,

as we believe customers are increasingly locked in to the platform as they adopt additional products.

 

We are also heartened by Salesforce.com’s thought leadership, yielding constant upgrades to its CRM

solutions and innovative features such as intelligent lead scoring and predictive analytics, making it far

more difficult for customers to abandon its products. Further, as more users come into the Salesforce

network, both Salesforce and its users benefit. In the case of the former, Salesforce receives more

feedback and data to improve all of its products, while more application developers in Salesforce.com’s

App Cloud yields a greater number of useful business applications in the firm’s AppExchange, which we

believe is the largest online enterprise application software marketplace live today.

 

 

 

 

 

 

 

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Sizing Up Salesforce.com’s Core CRM Opportunity

Customer Relationship Management Market Overview

CRM software is vital to both revenue-generating and customer interaction activities for businesses of

all sizes. As enterprises look to become more tactical in their sales, marketing, and customer service

practices, firms are turning toward innovative software platforms to track and gather insight into not

only their customers, prospects, and deal pipelines, but to also understand best practices for providing

service, extracting maximum value out of its relationships by upselling and cross-selling to additional

products and services, and creating, targeting, and managing marketing campaigns. As a result, the

CRM software vertical received an overwhelming share of the $156 billion spent on application software

in 2015, excluding the highly fragmented vertical-specific software market.

 

Exhibit 1 CRM and ERP Dominated the $156 Billion Application Market in 2015

 

Source: Gartner, Morningstar research

 

While the market outlay exceeded $25 billion on customer relationship management software in 2015,

we think this market opportunity is still several years from reaching its peak spending levels. There are

three key waves propagating growth rates for CRM spending, including:

 

Business Intelligence

and Analytics 11%

Customer Relationship

Mgmt. (CRM) 18%

Digital Content Creation

2%

Enterprise Content

Management 4%

Enterprise Resource

Planning (ERP) 19%

Office Suites

11%

Other Application

Software 23%

Project and Portfolio

Management 2%

Supply Chain

Management 7%

Web Conferencing,

Collaboration/Social Software Suites

3%

 

 

 

 

 

 

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1. Enterprises moving away from internally developed CRM systems.

× The source code for proprietary, internally developed CRM systems can date back multiple

decades, and they generally lack crucial functionality including modern, intuitive user

interfaces, built-in analytics, and the ability to tap into CRM data from other applications via

APIs. We suspect this wave will fully play out over the next several years as enterprises

address points of weakness in the IT infrastructure.

 

2. Software as a way to improve business processes.

× Small businesses frequently retrofit generic business applications (such as Excel) for other

uses, including customer relationship management. These processes are generally

completed via manual data entry and updating, costing businesses valuable time that could

be spent engaging its customers. While this wave is a much more fragmented opportunity,

we expect small and midsize businesses to continually look to software for operational

improvements as growth materializes, while larger enterprises turn to software as a means

of improving the customer experience and capitalize on greenfield opportunities.

 

3. Software as a way to save costs via the cloud.

× Beyond improving business processes, cloud computing has allowed enterprises to eliminate

costly infrastructure (in the form of underutilized physical hardware, maintenance, and IT

management headcount). Despite torrid growth for many cloud vendors, this wave remains

in the early stages, particularly in international markets where cloud adoption has lagged

North American markets. We estimate that shifting to the cloud can save customers as much

as 30% on their total IT costs over the long run, largely derived from downsizing on-premises

data center hardware and IT staffing required to run and maintain legacy software

applications.

 

These three waves largely underpin our expectations for application software growth over the next

several years. Further, organizations are increasingly embracing the value of each step of the customer

relationship journey, which has yielded CRM growth well above the overall application market growth

rate for several years, a trend we expect to continue for several years. Research firm Gartner estimates

that the CRM market (which covers most of Salesforce.com’s core products, including salesforce

automation, customer service, marketing, and digital commerce) will grow at a compounded annual rate

of just over 14% through 2020, well ahead of the broader application market (8.6%), making CRM the

largest application spending category.

 

 

 

 

 

 

 

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Exhibit 2 Midteens Growth Will Make Customer Relationship Management the Largest Application Vertical by 2020

 

Source: Gartner, Morningstar research

 

At a midteens growth rate, Gartner estimates that spending on customer relationship management will

exceed $50 billion in 2020, or roughly one fourth of its global enterprise application spending estimate of

more than $215 billion. However, exhibits 1 and 2 do not delineate between cloud and legacy on-

premises applications. While organizations have been more hesitant to move some applications to the

cloud (such as financial management applications within the ERP suite, though this trepidation is

gradually abating), Salesforce has helped lead the migration to the cloud for CRM applications, making it

the most heavily deployed application vertical in cloud-based environments today. Of the nearly $31

billion spent on software as a service in 2015, 39% was allocated toward CRM applications, a number

Gartner expects to inflate to 43% by 2020.

 

Business Intelligence

and Analytics 11%

Customer Relationship

Mgmt. (CRM) 24%

Digital Content Creation

2%

Enterprise Content

Management 4%

Enterprise Resource

Planning (ERP) 17%

Office Suites

10%

Other Application

Software 21%

Project and Portfolio

Management 1%

Supply Chain

Management 7%

Web Conferencing,

Collaboration/Social Software Suites

3%

 

 

 

 

 

 

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Exhibit 3 In 2020, the $75 Billion SaaS Market Will Still Be Dominated by CRM

 

Source: Gartner, Morningstar research

 

While enterprises are all at different stages of the cloud migration, we believe that the IT community is

generally in the early stages of moving legacy workloads into the cloud. Even with torrid growth through

2020, Gartner estimates that just 5% of total IT spending worldwide will be geared toward cloud-based

services. Admittedly, certain data stores and application workloads will need to stay out of multitenant,

public cloud infrastructure because of regulations around security and data sovereignty, but we believe

most core enterprise applications will eventually migrate to the cloud.

 

We think it is important to distinguish between SaaS and on-premises CRM spending growth for that

reason, at least as a point of reference, particularly since Salesforce.com offers its products only via the

SaaS delivery model, while legacy vendors such as Oracle and SAP scramble to reconfigure legacy

applications for the cloud. Over the next five years, we expect the mix between on-premises and SaaS

CRM spending to increasingly tilt toward the cloud, with the SaaS spending growth rate coming in well

above that of on-premises expenditures. Specifically, Gartner estimates that SaaS CRM spending will

grow at a compounded annual rate of 21% over the next five years. We believe that Salesforce.com’s

best-in-breed CRM portfolio will be the largest beneficiary of this growth, which could make our base-

case estimate of 19% compounded annual revenue growth over the next five years for the firm’s core

CRM applications (including Sales, Service, Marketing, and Commerce clouds) look conservative. Given

the mission-criticality and revenue-generating functions to which these applications are tied, along with

dollar attrition rates across the entire Salesforce.com portfolio of less than 9%, we believe these factors

in totality support our belief that Salesforce.com’s customers bear a large degree of switching costs,

underpinning our wide moat rating.

 

Business Intelligence

Applications 6%

Customer Relationship

Management 43%

Digital Content Creation

3% Enterprise Content

Management 2%

Enterprise Resource

Planning 13%

Office Suites

4%

Other Application

Software 13%

Project and Portfolio

Management 2%

Supply Chain

Management 7%

Web Conferencing,

Teaming Platforms, and Social Software Suites

7%

 

 

 

 

 

 

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Exhibit 4 Gartner: CRM SaaS Spending Will Grow at a 21% CAGR Over the Next Five Years Versus Just 7% for On-Premises Spending and 18% for Salesforce

Source: Gartner, Morningstar research

Note: “M* Salesforce Sales” includes our subscription revenue forecasts for the Salesforce.com’s sales, Service, Marketing, And Commerce clouds only; does not include App Cloud/other sales.

 

Leaders in this space include most of the usual suspects in the software industry, such as Microsoft,

Oracle, and SAP. However, many of the application vendors that once dominated the CRM vertical

largely rely on legacy on-premises applications. Vendors such as Oracle and SAP are racing against the

clock to retrofit these solutions and mash them together with acquired SaaS technologies to create a

complete cloud-based offering, but so far we believe those organizations are taking a back seat (from a

revenue and technological reliability and scalability perspective) in the SaaS wars versus cloud-native

firms such as Salesforce.com, particularly at the high end of the more than $25 billion market.

 

0%

5%

10%

15%

20%

25%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

CY 2014 CY 2015 CY 2016 (Est.) CY 2017 (Est.) CY 2018 (Est.) CY 2019 (Est.) CY 2020 (Est.)

Salesforce Sales* Cloud-Based CRM Spending On-Premises CRM Spending Salesforce Growth Cloud-Based CRM Growth On-Premises CRM Growth

 

 

 

 

 

 

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Exhibit 5 Salesforce.com’s CRM Success Has Come at the Expense of Its Rivals

 

Source: Gartner, Morningstar research

 

Based on Gartner’s estimates, just 22% of application software expenditures were allocated toward

software-as-a-service solutions. While this number should surge in general across software, we suspect

that the migration of CRM suites could accelerate even beyond Gartner’s expectations, particularly as

application software vendors like Salesforce.com look to build new functionality into its products such as

embedded analytics, artificial intelligence, and use cases around the Internet of Things that could help

further consolidate IT spending. We believe this type of thought leadership can provide greenfield

opportunities for Salesforce.com’s products, ultimately creating the potential to expand its total available

market beyond Gartner’s estimates. Over the next several sections, we explore these themes, along with

the state of each of Salesforce.com’s existing CRM products and their respective opportunities and

challenges.

 

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015

Salesforce.com SAP Oracle Microsoft IBM Adobe

 

 

 

 

 

 

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Parting the Clouds

Sales Cloud

Sales Cloud is Salesforce.com’s flagship salesforce automation application, or SFA. Introduced in 1999,

the product is the firm’s most mature offering. Sales Cloud allows salespeople to track deal pipelines,

manage interactions, and gain access to contact information for customers and prospects alike. Over the

years, Salesforce.com has added increased functionality to the platform via both internally developed

 
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Research Paper On Apple

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Term Project One

 

Throughout the chapters 1-4 of this text you will be exposed to many examples of real-world companies to help illustrate how the concepts that you are learning in each chapter can be applied to real business situations. The paper at the end of every chapter consist of:

Explore Your Own Case in Point:  enhancing your understanding of your company of choice;

 

The objective of this research paper is to enable you to conduct an independent analysis of a large company (e.g., a Fortune 500 company). Select a company that you admire, a company that intrigues you, a company that you would like to work for after graduation, or a company that you’ve always wanted to know more about. Select a company listed in a major stock exchange like London, New York, Tokyo, Shanghai, Hong Kong, Singapore, Bombay, Frankfurt, or Paris so that various types of information (financial or otherwise) are readily available. Each chapter focuses on a specific topic, and the end-of-chapter questions will encourage you to analyze how that particular topic relates to your company. By the time you have completed the term project you will have learned a great deal about your chosen company.

 

Explore Your Own Case in Point

 

Answer the following questions about your favorite company.

 

Chapter 1

 

1) Identify three major countries with which your chosen company operates. Preferably, these three countries are in different continents.

2) Are these three countries members of the IMF, the World Bank, and WTO? Do you believe that these three countries actively follow guidelines of these three major international institutions?

3) Compare the institutional structure of these three countries to determine if they promote globalization, that is,

(a) are their political institutions transparent? and

(b) do they have a functioning judiciary system?

4) Do you believe that the three countries under consideration practice policies that promote globalization? For example, what are those countries’ policies toward

(a) governance,

(b) competitive markets,

(c) property rights, and

(d) corruption?

Chapter 2

1) Determine whether your company is a producer of goods or services. What are the major products and/or services provided by your company? Are those outputs sold only domestically or are they also exported?

2) If some or all of the output is exported, how much of it is exported? To where are they exported, and why?

3) Do these products and services face tariff or nontariff barriers in the target export markets? What are the tariff rates or nontariff barriers imposed on these items?

4) Does your chosen company fall within the framework of “managed trade” in the export market? If so, on what basis? How is the company trying to overcome this challenge?

Chapter 3

1) Identify regional trading blocs with which your chosen company operates. Identify the benefits that your company gains because it is part of those trading blocs. Is your company taking advantage of the situation?

2) Which trading bloc is most attractive for your company, and why? Explain the importance of that bloc in terms of economic geography (i.e., business density, distance and infrastructure, and intra-regional trade barriers).

3) If you could advise your company about the benefits of regional trading blocs, which trading bloc would you recommend that the company consider next? Why?

4) Would your company be better off under a system of multilateral trade liberalization like the WTO or with bilateral or regional trading blocs?

 

Chapter 4

1) Volatile currency movements can have important affects on your company. Historically speaking, were there any currency crises in different countries that would have affected your company’s costs or revenues? What about the recent 2008 and 2009 global economic crisis period?

2) How can your firm lower its debt costs by tapping global credit markets in the future? Will it cost less to borrow from low interest rate countries?

4) How does purchasing power parity affect your firm’s purchases of goods and services from other countries? Will it cost less to buy identical supplies from other countries that have lower prices?

 

Requirements

 

· Term Project: Part One (10%): You are required to select a company that you admire, a company that you would like to work for after graduation, or a company that you are interested in. Each chapter focuses on a specific topic and you will analyze how that particular topic relates to your company. By the chapter 5 you will have learnt a great deal about your chosen company. Your Research Paper is an individual research project. Details as follow:

 

· Research paper should be 4-5 pages, double-spaced, APA citation format

· Paper should have a Title Page, Abstract, and Reference (not included in the body paper)

· The research paper instructions require submission through safe-assign, then you must comply with the submission guidelines AND bring in a hard copy of the assignment to class and the SafeAssign report.

· There will also be a presentation of your paper.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Helpful Resources (but not limited to)

 

The International Monetary Fund: www.imf.org

The World Bank: www.worldbank.org

World Trade Organization: www.wto.org

Transparency International: www.transparency.org

United States Department of State: www.state.gov/r/pa/ei/bgn/

United States Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/

Global Edge: www.globaledge.msu.edu/resourceDesk/

 
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Growth In International Markets

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Assignment 1: Individual Research and Short Paper—Growth in International Markets

Once a company has identified a market favorable in terms of profit and market share potential, growth prospects and planning begin to evolve.

For this assignment, you will use the University online library resources and Internet resources to compare the risks of further expansion in an existing market with the risks of expanding into a new market.

  1. Select an MNC that has decided to further expand into the U.S. and address the following questions:
    1. Did the company have to consider the same risks as companies entering into a new market? Present a comparative analysis of the risks. Identify some of the risks a company expanding further would need to consider.
    2. Are the growth considerations and strategies of expansion similar to those related to entering a new market?
    3. What economic incentives do municipalities offer for companies planning on investing? Are there any constraints the company needs to consider?
  2. Select a U.S. company that has decided to further grow in an existing international market, then address the following questions:
    1. What type of regulatory considerations does the company need to investigate prior to expansion? Are the regulatory considerations similar to those of entering into a new market?
    2. What type of benefits would a company avail when deciding on further expansion into the market?

Write a 4-page paper in Word format. Apply current APA standards for writing to your work.

By Wednesday, May 29, 2013, submit your assignment

 

 

Assignment 2: Course Project Task 4—Legal and Economic Risks of Expansion( Ikea- USA)

In this assignment, you will investigate your chosen MNC’s expansion activities in existing markets. Concentrate your study on the regulatory concerns that need to be addressed while expanding.

Carry out individual research using the University online library resources and Internet resources. Then, discuss the following in your group. Support your conclusions with examples.

Discuss the impact of the following factors on your chosen MNC:

  1. Taxation issues
  2. Distinguish U.S. GAAP versus IFRS
  3. Political
  4. Foreign exchange
  5. Legal
  6. Economic
    • Pricing
    • Product regulations
  7. Corporate governance
    • Policies
    • Issues
    • Organizational structure

By Thursday, May 30, 2013. submit your assignment.

· Read the overview for Module 4

· From the textbook, International business law and its environment, read the following chapters:

· National Lawmaking Powers and the Regulation of U.S. Trade

· GATT Law and the World Trade Organization: Basic Principles

· Law Governing Access to Foreign Markets

· From the Argosy University online library resources, read:

· Desai, M., Foley, C., & Hines Jr., J. (2004, December). Foreign direct investment in a world of multiple taxes.Journal of Public Economics, 88(12), 2727–2744. (LIRN Article A152498641)

· Gunter, H. (2006). Global expansion plans broaden horizons. Hotel & Motel Management, 221(18), 1–49. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=22746846&site=ehost-live

· International growth. (2009). Franchising World, 41(2), 93. Retrieved from EBSCO databasehttp://libproxy.edmc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=36530783&site=ehost-live

 

Growth in International Markets

Can managers afford to be conservative when taking decisions related to potential growth prospects?

 

After a company has successfully entered a foreign market, it may decide to continue to grow. Decisions to invest further can become easier to make based on the company’s experience in that market.

 

In early 2009, the Hongkong and Shanghai Banking Corporation (HSBC), Europe’s largest bank, announced that it was retreating from its expansion plans in the U.S. HSBC had recorded a $16 billion bad-debt loss in 2008. The loss was from an acquisition that initially cost the bank $14.8 billion. HSBC also had an additional $10 billion write-down on goodwill from its acquisition. The decision was primarily influenced by the eroding U.S. real estate market and a decline in the lending portfolio value of Household Financial, a six-year-old acquisition. Federal policies and regulations such as reduced interest rates, increased money supply, and Troubled Assets Relief Program (TARP) funds were contributing factors.

 

Raising capital, finding labor, and leveraging existing distribution channels all play a part in the decision to grow further. However, growth in international markets continues to be a challenge despite any circumstances.

http://myeclassonline.com/ec/courses/AUO_files/AU_img.gifModule 4 Overview (2 of 2)

 

http://myeclassonline.com/ec/courses/AUO_files/AU_spacer.gif

 

 

Growth in International Markets

This module will cover the risks associated with growth in international markets.

You will compare the risks of further expansion in an existing market with the risks of expanding into a new market. In your assignment, you will also investigate economic incentives offered to companies that plan on investing. You will also look at the various regulatory issues companies need to take into account prior to further expansion.

· Read the overview for Module 4

· From the textbook, International business law and its environment, read the following chapters:

· National Lawmaking Powers and the Regulation of U.S. Trade

· GATT Law and the World Trade Organization: Basic Principles

· Law Governing Access to Foreign Markets

· From the Argosy University online library resources, read:

· Desai, M., Foley, C., & Hines Jr., J. (2004, December). Foreign direct investment in a world of multiple taxes.Journal of Public Economics, 88(12), 2727–2744. (LIRN Article A152498641)

· Gunter, H. (2006). Global expansion plans broaden horizons. Hotel & Motel Management, 221(18), 1–49. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=22746846&site=ehost-live

· International growth. (2009). Franchising World, 41(2), 93. Retrieved from EBSCO databasehttp://libproxy.edmc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=36530783&site=ehost-live

 

Growth in International Markets

Can managers afford to be conservative when taking decisions related to potential growth prospects?

 

After a company has successfully entered a foreign market, it may decide to continue to grow. Decisions to invest further can become easier to make based on the company’s experience in that market.

 

In early 2009, the Hongkong and Shanghai Banking Corporation (HSBC), Europe’s largest bank, announced that it was retreating from its expansion plans in the U.S. HSBC had recorded a $16 billion bad-debt loss in 2008. The loss was from an acquisition that initially cost the bank $14.8 billion. HSBC also had an additional $10 billion write-down on goodwill from its acquisition. The decision was primarily influenced by the eroding U.S. real estate market and a decline in the lending portfolio value of Household Financial, a six-year-old acquisition. Federal policies and regulations such as reduced interest rates, increased money supply, and Troubled Assets Relief Program (TARP) funds were contributing factors.

 

Raising capital, finding labor, and leveraging existing distribution channels all play a part in the decision to grow further. However, growth in international markets continues to be a challenge despite any circumstances.

http://myeclassonline.com/ec/courses/AUO_files/AU_img.gifModule 4 Overview (2 of 2)

 

http://myeclassonline.com/ec/courses/AUO_files/AU_spacer.gif

 

 

Growth in International Markets

This module will cover the risks associated with growth in international markets.

You will compare the risks of further expansion in an existing market with the risks of expanding into a new market. In your assignment, you will also investigate economic incentives offered to companies that plan on investing. You will also look at the various regulatory issues companies need to take into account prior to further expansion.
 
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