...Best Buy enters India by Francisco Polo Professor Hamid Assar International Finance – FIN535 May 22, 2012 Summary Best Buy Co., Inc. is an American specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Puerto Rico, Mexico, Canada and China. The company's subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores domestically and internationally. In addition, the company operates over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the U.S. The company is headquartered in Richfield, Minnesota, United States. On March 9, 2009, Best Buy became the largest electronics retail store (online and bricks and mortar) in the eastern United States, after smaller rival Circuit City went out of business. Fry's Electronics remains a major competitor in the western United States, while Hhgregg remains competitive in the eastern United States. Many locations feature in-store pickup, which can be arranged through the company's website. As of December 28, 2008, the company operated 1,010 Best Buy Stores, 13 Magnolia Audio Video Stores (specializing in high-end electronics), 7 stand-alone Geek Squad stores, 3 Audio Visions Stores, 13 Best Buy Mobile Stores (standalone) and...
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...MNC Enters India Finance 535.003 Provide a brief summary of the business you chose. Nucor Corporation is one of the world’s largest steel manufacturing multinational corporations (MNCs) comprised of more than 20,000 employees worldwide (Nucor, 2013). The company is among the top 2 steel manufacturers in the United States, along with U.S. Steel Corporation, with more than 20 million tons of steel produced in 2012. Nucor’s mission is to take care of their consumers with the help of the corporation’s teammates (employees), by producing safe high quality steel at a low cost (Nucor, 2013). They will obtain this goal in conjunction with being most profitable and productive. The corporation has 22 locations in the U.S. and 9 locations in 8 countries, none of them being India (Nucor, 2013). Nucor is broken down into 4 main segments: steel mills, steel products, raw materials and all other (Nucor, 2013). While the company has remained profitable for years, with annual sales of $19.4 billion U.S. dollars, rising steel prices has plagued the steel industry resulting in many steel companies’ sales declining (Nucor, 2013). This can be attributed to steel producers being reluctant to cut prices in spite of lower demand. Many of these issues coming from declining sales have said to have been rooted from China’s inexpensive sales of cheap steel products (Gael, G., 2013). Nucor’s CEO has pleaded for restrictions to be made on trade of Chinese made steel (Gael, 2013). India is in...
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...1. What is the climate for doing business in India? Is it supportive of foreign investment? The climate to do business is promising at the time. There have been issues in the past with certain companies such as PepsiCo and Gillette. Times have changed and India will soon be considered as a developed nation. Foreign investment is supported in India. The article mentions the increase in foreign direct investment to exceed $3 billion in the year 2000 and $27 billion in the year 2009. Though Indian population is very diverse in nature, English is spoken as the national language among the educated people. This makes the processes for a foreign investor smoother. Indian Government support the economic growth through foreign investment foreign investment has brought positive outcomes for the nation’s GDP. Moreover, expertise and skill is available for the technical fields in India. Wages and salaries are low compared to other first world nations. 2. How important is a highly educated human resource pool for MNCs wanting to invest in India? Is it more important for some businesses than for others? A highly educated human resource pool is important in for the MNCs dealing in medical, engineering and telecommunication to invest in India. As mentioned earlier, they can be hired at a low salary. Communication becomes easier and growth becomes faster with such an asset. Negotiations with Indian partners are easier to deal with. Highly educated people represent a safer and stable economy...
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...security software company in United Stated is planning to expand to overseas due to the need of providing the worldwide service to its client and the pressure by its shareholder. After the meeting between the company’s CEO and larger shareholders, they are distressed in whether stay in the US market or expand overseas. The four potential countries favour by Sanctuary Soft in its expansion plan included China, India, Germany and United Kingdom. In order to select a proper country for Sanctuary Soft’s first foreign expansion, this report will provide a detail explanation regard to the motivation of the first internationalization of Sanctuary Soft; the market opportunity of four possible foreign countries, and the expansion strategy in order to decide a proper countries for Sanctuary Soft’s first foreign penetration. Finally, this report will suggest some IHRM strategy/principle that Sanctuary Soft needs to consider in its selected foreign subsidiary. The motivation for internationalization The major motivations for Sanctuary Soft become a multinational company (MNCs) is to explore foreign opportunities, so as to accumulate specific knowledge in order to build their capabilities to provide service to its global basis clients. The larger clients who use the information security system are often having global presence. Therefore Sanctuary Soft needs to acquire new ideas and skills in the overseas market in order to increase its capabilities to serve clients internationally....
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...FIN 535 – International Finance COURSE DESCRIPTION Presents international financial tools, applications, and concepts used in formulating effective financial management strategies. Examines fundamental international financial relationships and transactions among firms, foreign exchange rate determination and forecasting, foreign exchange risk and exposure, balance of payment accounting, and evolution of the international monetary system. Analyzes special topics such as working capital management strategies, capital budgeting, cost of capital, and optimal capital structure in the context of international operations. INSTRUCTIONAL MATERIALS Required Resources Madura, J. (2012). International financial management (11th ed.). Mason, OH: South-Western, Cengage Learning. Supplemental Resources Al Nasser, O.M. (2010). How does foreign direct investment affect economic growth? The role of local conditions. Latin American Business Review 11, 111-139. Kornecki, L. & E. M. Ekanayake. (2011). Inward FDI stock in the U.S. economy and state based determinants. Advances in Management, 4(6), 13-24. Ranjan, V. & Agrawal, G. (2011). FDI inflow determinants in BRIC countries: A panel data analysis. International Business Research, 4(4), 255-263. United Nations. (2011). Foreign Direct Investments in LDCs: Lessons learned from the decade 20012010 and the way forward. United National Conference on Trade and Development. COURSE LEARNING OUTCOMES 1. Compare multinational financial management...
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...Business, socio- economic and cultural environments of India Introduction India has emerged as a potential and a diversified market for the Western firms and other foreign investors. Earlier establishing a business in India was a challenging assignment, but economic reforms, brought in by different Indian governments over a period of time, have smoothen the course of entry for Western multinationals and other business magnets. Still it is considered difficult and a different proposal to do business in or with India, mainly because of its different business and socio- economic culture. Western multinationals/ investors dealing with India so far had to adopt major changes in their business style in order to serve effectively to their customers. This write up examines in detail the prevalent business, socio- economic, and cultural environments that western multinationals have to face in India, as well the implications of their adopted major changes in business practices to succeed in India. Despite revolutionary changes since independence of India, the basic business style has remained the same as of family controlled businesses. Leading business families, from Birlas and Tatas to Reliance, keep total control on business of companies promoted by them. Major management posts in these business houses are always held by responsible family members. Though joint family system is slowly disappearing, but still there is a common tendency in Indian families to own a business. Another...
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...Effect on Local Businesses in Retailing Sector (India) Contents Abstract 1 Introduction 2 Literature Review 2 Effect of MNC’s into Indian Retail Market 5 Advantages 5 Disadvantages 7 Hypothesis 8 Conceptual Model 8 Conclusion 10 References 10 Abstract Globalization paved the way for entrepreneurs to expand their wings beyond their respective counties. MNCs exploit the business opportunities in other countries based on the FDI policies in those countries. This has both advantages and disadvantages to the target country. The MNCs have their impact on the economy and people of countries in which they operate business. This paper focuses on the impact of MNCs on local businesses in retail sector in India. The report review existing literature which provides insights into FDI policies in India, the level of FDI allowed by Indian government with respect to single –brand and multi-brand foreign companies, the advantages, opportunities, risks, threats and disadvantages of allowing MNCs into retailing sector in India. Introduction Retailing is the business taking up by individuals or families in India. Generally mom and pop kind of businesses operate in retail sector. The retail sector has tremendous growth in India. Moreover retailing is a profitable business in India. Since India is the country with huge population, naturally it is the correct destination to foreign investors to get profits from the market. India has been traditionally depending on the small...
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...Social and Ethical Values of Teamwork and Diversity: The Benefits of Diverse Teams Organizational development between diverse teams gives the MNC the opportunity to enter new markets and develop new products, in ways that they would not have been able to if they did not have a diverse, multicultural perspective. The benefits to individuals and society are profound. There are ethical implications for being a good corporate sponsor: by this I mean that there is a potential for a win-win situation that benefits both parties, when a substantial goal can be agreed upon and realized. Sometimes, entering a new market with team players from that region gives them a perspective that they would not considered. A good example of this is the GE ultrasonic ultrasonic imaging machine that has been developed for third world markets {particularly OBGY patients}. This particular product was given the green light after engineers from India were able to express their ideas. To begin with, the device was developed with simple, rugged, and cheap parts. This was done to keep costs down. It can function in a dirty, dusty, third world environment with little or no service. Second, the machine is lightweight, and easily transportable, so that a travelling physician could carry the device on a backpack, using public transportation. This was an important consideration in third world countries, because not all users of the device would be physicians, and more importantly, not all health...
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...E-mail: slhart@unc.edu DRAFT Not for citation or distribution without the permission of the authors August 1999 As multinational firms (MNCs) search for avenues for profitable growth and radical innovation in the new millennium, they may find a unique, counter intuitive opportunity – the 4 billion poor that are at the bottom of the economic pyramid. Converting the very poor into active consumers will foster innovations in technologies and business models. It will challenge managerial (and public policy) assumptions about sustainable development. Managers will be forced to consider the meaning of scale – the need to marry highly distributed small-scale operations and a few world scale capabilities --creatively along the value chain. Most importantly, conceiving of a market of 4 billion of the world’s poorest people will force a reexamination of the “price–performance” relationships for products and services. It will demand a new level of capital efficiency. The bottom of the pyramid presents a new managerial challenge – one potentially as powerful as the challenge presented by the proliferation of the Internet and e-business. The transformation of the bottom of the pyramid and the creation of a new and emerging market, like the opportunty in e-business, requires a total transformation of managerial practices in established MNCs. It will...
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...(liberalization) • Import duties fall 85 % to 25% also drives the growth • Market share of PSUs has been decreased to 48% in 1999-2000 because of MNC players entry and increased competition 100 90 80 70 60 50 40 30 20 10 0 PSU Private Sector Pre-liberalization Post-liberalization Opportunity • Growing disposal income, Lifestyle and improved infrastructures are few growth opportunity factors in future • India is 2nd largest Two wheeler producer and fourth largest commercial vehicle market globally with fastest growing market in the world with a growth expectation of CAGR 9.5% till 2010 • Migration of Two wheeler segments to four wheeler segments is the growth driver of fuel demand • Brake oil and coolant oil are another large segment is expected to grow with introduction of new brake system and advanced gear technology and automatic transmission system (ATS) Lube market size in India • Fifth largest market in the world in terms of volume with 17000 • • • • • • Cr in 2009 Broadly divided into 3 major categories Automotive (67%),Industrial and Marine & Energy Applications (23%) Automotive is further classified into CI Engines (Diesel Engine) with 70% Market share and SI Engine (Lubes and petrol Engines) with 30% market share Industry is led by 4 major players with 70% market share i.e IOC, Castrol, HPCL & BPCL, remaining 30% is MNC and unorganised players Market share is further divided as 50% PSUs and 20% Castrol IOC has been the leader in terms of profitability...
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.......................................................................................................... 2 2. PRE AND POST LIBERALIZATION ............................................................................................... 3 3. INDIAN LABOUR LAWS ............................................................................................................. 4 4. PRESENT SCENARIO OF LABOUR AND MNCs IN INDIA ........................................................... 8 5. PERCEPTION OF LABOUR ABOUT MNCs ................................................................................ 10 6. RECOMMENDATIONS .............................................................................................................. 11 7. INTERVIEW WITH INDUSTRY EXPERTS ................................................................................... 13 8. BIBLOGRAPHY.......................................................................................................................... 15 MDI-PGPM-HRM-Term-II Page 1 Multinationals and their impact on Labour Scene BACKGROUND India was predominantly an agricultural economy till Independence in 1947. Even after Independence, the First Five-Year Plan (1951 —56) laid emphasis on agriculture. With the Second FiveYear Plan (1956 — 61) there was a shift towards heavy industrialization. The share of agriculture in gross domestic product (GDP) declined from about 56 per cent in 1950 — 51 to less than 30 per cent in 1990 — 99 while the...
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...Multinationals and Their Impact on Labour Scene in India Multinationals and their impact on Labour Scene 28 October, 2012 Multinationals and their impact on Labour Scene Table of Contents 1. BACKGROUND ........................................................................................................................... 2 2. PRE AND POST LIBERALIZATION ............................................................................................... 3 3. INDIAN LABOUR LAWS ............................................................................................................. 4 4. PRESENT SCENARIO OF LABOUR AND MNCs IN INDIA ........................................................... 8 5. PERCEPTION OF LABOUR ABOUT MNCs ................................................................................ 10 6. RECOMMENDATIONS .............................................................................................................. 11 7. INTERVIEW WITH INDUSTRY EXPERTS ................................................................................... 13 8. BIBLOGRAPHY.......................................................................................................................... 15 MDI-PGPM-HRM-Term-II Page 1 Multinationals and their impact on Labour Scene BACKGROUND India was predominantly an agricultural economy till Independence in 1947. Even after Independence, the First Five-Year Plan (1951 —56) laid emphasis on agriculture. With the Second FiveYear...
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...Marketing in Emerging Market Economies: Why there is a need to reformulate marketing tactics used in emerging markets. Emerging Markets – An overview Emerging market economies are those economies which exhibit high growth and investment potential. Emerging economies are generally found in East and South Asia, Eastern Europe, South Africa, Latin America and Middle East. These economies are characterized by improving standard of living, other than that they have large growing middle class population who have high aspirations and ambitions for the future. All these characteristics make these economies attractive destinations for exporting goods, investment and outsourcing. Emerging economies of the world possess several advantages which have led to their rise. The major advantages that have been observed in these economies are availability of cheap labour force and highly qualified work force which have made these economies challengers in the global market. Another major characteristic of these economies is that their growth rates are much higher than the developed countries of the world. The new international challengers are the top firms operating in these emerging economies who have now become key contenders of the world market. A very good example of the above discussion is Orascom Telecom - which is an Egyptian telecom provider who on the basis of managerial capabilities and superior technology has become one of the major telecommunication provider in Africa...
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...Businesses are also expected to actively participate in upholding human rights. The Global Compact proposes presents the framework and guiding principles that can help these MNC’s navigate past these dilemmas as they enter new growth environments. This paper will report on the issues raised on the Bloomberg Interview and the Four Corners Program on Apple. The Global Compact (GC) is a proposal from the United Nations, which asks companies, MNCs included, to embrace and inculcate universal principles in their company operations and partner with the UN to ensure that human rights violations are not perpetuated in the business world (Rasche, et al., 2012). The UN GC has grown to become a crucial platform through which the UN gets to engage and interact constructively with the numerous enlightened global businesses. The GC’s primary goal is to encourage businesses to engage in businesses as forces of good and not evil. Multinational corporations are impacted by the GC which expects them to conduct their businesses is ethical manners. The Global Compact is alive to the fact that the different MNCs it seeks to partner with are at varying stages of their corporate sustainability and performance. That is why the GC employs a wide range of approaches in engaging these MNCs. These approaches include the development of overarching frameworks which include the Global...
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...strategy taken by Hindustan Unilever Ltd. (HUL) to enter the rural sector, which has remained insulated so far, is a good one,” says Atmanand. “In states like Maharashtra, Gujarat, Andhra Pradesh, Delhi and Haryana, the company is expanding steadily by expanding their network of dealers and making themselves household names.” Of course, replicating the HUL model may be difficult for a startup, but it does serve as a valuable lesson in marketing: Don’t put all your eggs in one basket. The entire gamut of white and brown goods has found a place in the rural market, driving several industries to actively explore it. “In the current scenario, companies should change their strategies for market-ing. For market sustainability, we have to look at the rural markets. This would include products that have been especially designed for these markets at prices that will suit the sector,” says Atmanand. Tailor-made products for rural India The company should provide rural folk with products and services that would meet their requirements. Take Cavin Care, for instance, which launched its shampoo in sachets. Also consider Britannia, which packaged its Tiger brand biscuits at a low price tag. Such companies obtained an understanding of the rural customer’s needs and provided them with the desired products. Atmanand’s emphasis is clearly on Para-meters that change the dynamics of marketing a product. Rural markets offer a great potential to help India Inc. (which has...
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