Wednesday, April 3, 2019
Elecdyne An Electronic Company Economics Essay
Elecdyne An Electronic Company economics EssayElecdyne, an electronic company, which is located in Japan, is pure toneing for an opportunity oversea as it is facing a fierce competition at home. This reveal analyses foreign nations with regards to turn over costs, technology, market demand, culture and risks. The data that be dispassionate from various sources analyzes the market potentiality for the products in opposite countries. The countries that ar been chosen for expanding globally are ground forces, Russia and China the reasons are the fol small-scaleing regular army cognize for the largest economy.Russia known for peerless of the fastest growing economy.China known for the scrappy economic growth in the 21st century and for the cheap labor cost.In order to analyze deeply into these countries, STEEP, cuss and FDI analysis are been chosen.STEEP epitomeSocio Culture Target Market, Age Range, Income Brackets,Technology technological infrastructure, RD, Advan cement of hot technology and InnovationEconomic Infrastructure, Labor cost, deputise grades, pretentiousness footsteps, interest rates, unemployment rates and wage level. bionomical Global warming, Recycling, park come energy, CO2 Omission and waste handling.Political Unions, trade barriers, risk of war, laws and taxes and governmental stability.STEEP analysis is the method to evaluate the business opportunities in separate countries. This analysis helps them choose the best pop out of three compared countries for expanding the business overseas.The socio-culture plays a vital role in segmenting the target market for their products. The market demands are diverse in different countries. The age groupings are considered very historic in todays business creative activity. In terms of Elecdyne, which is an electronic company producing products from televisions to CD players, mostly attracts the youth population. So, considering the youth population is other countries are im portant. proficient factors differ in other countries. Japan, which is considered to be an advanced ground, could find other developing countries lacking such as China or Russia, solely the market whitethorn be lucrative in terms of business. They may need to import technology from back home or from other advanced nation such as ground forces. For an example, technological infrastructure in China may not be that advanced as compared to Japan, so Japan would need to use its own RD infrastructure to target Chinese market, which in turn could raise the cost of production.Most of the time, political factors of the outlandish feign the business policies. Business laws in Japan are different from other countries. Elecdyne seted in Japan under Japanese laws have to perform different in China, Russia and regular army due to the local policies that they have, as this could affect or may lead to rethink of opening up businesses in those countries.Economic situation is the main factor th at attracts foreign companies to look at the market, because of the raise in purchasing power among the citizens, solely businesses look beyond purchasing power such as exchange rates, infrastructure, labor costs, inflation rates, unemployment rates and wage level. Elecdyne is attracted towards the labor costs and the local purchasing power.Ecological is the new factor that plays in todays world of being responsible towards an environment. We had seen world leaders gathering for the global warming situation and asking the entrepreneurs to crawfish up the responsibility of promoting the green energy and eco-friendly products. These factors are forcing the companies to reinvent new strategy for their products, right from productions till the consumptions.Internal and External Analysis conkingStrengthWages are so low that they are fail to attract new employeeElecdyne has more than 20 years experience is lacquerInvention has been so under rated that they are no where near in the mark etStaff have been familiar with english language rig out Analysis will be used to analyze internal factors and PEST Analysis for the external factors. SWOT stands for strengths, weaknesses, opportunities and threats. PEST stands for political, economic, social and technological.External AnalysisPoliticalUSARussiaChinaJapan12=103-2=-103-2=-1020War chance (5)(ONDD, 2012)1=good7=bad12=43-6=-242-2=-810Political Risk(4)(ONDD, 2012)1=good7=bad1935=713350-=10-80-40=8-170Corruption perception Index (5)(International, 2012) 10 (very high) to 0 (low)14=122-2=-63-4=-1210Transfer Risk (3)(ONDD, 2012)1=good7=bad61-90-700 fitEconomicJapanChinaRussiaUSAGDP Growth rate (The World Bank, 2011) 5-0.7%09.3%10=504.3%6=301.7%1=5GDP per capita(The World Bank, 2011)4$45,9030$5,445-6=-24$13,089-8=-32$48,1122=8GDP Purchasing Power (C.I.A, 2011) 5$4.44 meg0$11.3 trillion8=40$2.383 trillion-2=-10$15.08 trillion10=50Unemployment rate (C.I.A, 2011) 34.6%06.5%4=126.6%4=129%8=24total078087SociologicalJapanChinaR ussiaUSALiteracy rate (C.I.A, 2011) 199%092.2%-3=-399.6%-1=-199%1=1Life Expectancy (C.I.A, 2011)283.91 eld074.84 YEARS-2=-466.46 YEARS-4=-878.49 YEARS-1=-2Population (C.I.A, 2011)2127,368,08801,343,239,9236=12142,517,6701=2313,847,4653=6Average demolition rate (C.I.A, 2011)19.15/ gravitational constant07.17/10001=114.1/1000-2=-28.4/10002=2 tot up06-97TechnologyJapanChinaRussiaUSARD expenditure (The World Bank, 2008) 33.45%01.47%-3=-91.04%-6=-182.79%-1=-3Internet Users (C.I.A, 2011)199,182,0000389,000,0006=640,853,000-5=-5245,000,0003=3Mobile users (C.I.A, 2011)1129,868,0000986,253,00010=10236,700,0002=2313,848,0004=4Total07-214Cost fanfare rate(C.I.A, 2011)4-0.3%05.5%-4=-168.4%-6=-240.9%-1=-4Interest Rate (The World Bank, 2011 33.7%0-1.1%4=12-6.4%6=181.0%1=3Total0-4-6-1PEST WEIGHTED AVERAGEJapanChinaRussiaUSAP0-70/4=-17.5-90/4=-22.561/4=15.25E(market)078/4=19.5087/4=21.75E(cost)0-4/2=-2-6/2=-3-1/2=-0.5S06/4=1.5-9/4=-2.25-7/4=-1.75T07/3=2.3333-21/3=-74/3=1.3333Total03.83333-34.7536 .08Summary of PEST AnalysisFrom the analysis, USA market looks attractive according to the situation faced by Elecdyne. USA has the fast growing economy and it is a great chance for the Elecdyne to view the share of the market. USA also has great number of youths in the earth to buy the products. With comparison to other three countries in the table, they find USA as the best alternative for expanding internationally. USA also has a low labor cost as compared to other three countries and geographically adjacent to Japan as well. It is highly competitive market, barely it is lucrative once succeeded.Options of InternationalizationThere are three options for Elecdyne to go International or establish business in China. The following options are1. Joint back2. Acquisition3. Greenfield SiteJoint Venture with other existing firms in USA can help Elecdyne to merge into the market quickly. This venture is one of the most common strategies used by the foreign firms to enter into the co untry. The lordly impact of this venture is that they can learn the consumers quickly and efficiently utilize the existing firms in USA. The negative side of the venture is that Elecdyne would lose its net profit share to the local firm that is ventured with.Acquisition technic may look attractive, but have risk to it. It is always quite expensive to buy out the firm in USA and hope for profit out of it. It is risky, but once succeeded it is profitable. There are risk factors attached to it. It is always safer to look at the government policies for the foreign firms. FDI investment policies are different in different countries.Greenfield Site project are mostly used by very large corporation of developing the underdeveloped land. Risk gnarled with this strategy is very high especially in a country like USA. Political risk involved with it is higher. The government could seize the land if needed or may not be willing to capture an agreement for a longer period of time.
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