MGT5005 - Assessment 3: Individual Case Study

Topic overview

For this assignment you are to write a report to the Board of this existing successful retail company, analysing the risks of entering two different Asian markets in developing economies. Your task is to make specific recommendations on how to mitigate the risks of strategic alliances with businesses in these two emerging Asian markets. Note this is a fictional company.

First you will choose two different developing Asian countries to compare and contrast. Then you will outline the risks of entering these two markets, and then make succinct and actionable recommendations to mitigate these risks..

Assessment criteria

This assessment will measure your ability to:

• Analyse, contrast and make comparisons (50%)
• Provide recommendations (15%)
• Support your report with research and evidence (15%)
• Present your report coherently and professionally (20%)

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Background

In recent years relatively new corporations based in developing economies, such as India, have been seeking to develop world markets. For some western based corporations these developing corporations can become significant competitors.

Many of these affected western corporations initially sought out low-cost manufacturing or delivery of services in the developing economies. In addition, they are often interested in penetrating markets with a large and growing middle class. While these developing corporations remained dependent upon supply contract–based export sales back to the principal, all was well. In the meantime, and as a direct result of economic development through these exports to the west, the socioeconomic situation of these developing economies changed. Domestic markets for the products of the west emerged in their own countries. The local corporations found that

they were no longer limited by their export supply contracts. They now had the support of domestic markets. The competitive dynamic shifted.

It is generally accepted that many current, significant, developing economies reside in different Asian geographies. These include India, Vietnam, the Philippines, Sri Lanka, Indonesia and China. Today corporations need to carefully consider alliances with corporations of these nations.

Your task

You are a member of the senior executive team for a retail organisation selling a range of children stationary products. In recent years your organisation has experienced rapid growth in sales through alliances in North American, European and developed Asian markets, as these markets have become more discerning about environmental sustainability. Your organisation has enjoyed a unique competitive advantage.

To secure future growth, the CEO has been considering entering developing Asian markets, using the mechanism of strategic alliances with existing entities. The board has expressed its concern that any alliance in these countries could effectively prepare the Asian partner to become a major competitor in existing markets.

You have been requested to prepare a report addressing the board’s concerns. Your task is to assess the risks and recommend risk-mitigating approaches/strategies. Choose two developing Asian countries of interest to contrast and compare.

To inform your deliberations start by researching recent/past alliance successes or failures. These can be found both in the media and in the academic literature. Include strategically negotiating the terms of the alliance and taking into account cross-cultural factors.

Include succinct and actionable recommendations arising from your research that will enable your organisation to mitigate the risks you identify.