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MODULE 1 (Sarah Prady)
Identifying Global Business Opportunities

Global Business Opportunities
We are a construction company that focuses on the future of the environment as well as people all over the world. We have a lot of experience, passion, and knowledge about constructing homes that are energy and meet the universal green standards. Our core business consists of constructing “green” homes for people to purchase in hopes to live a more eco friendly lifestyle in order to help save our planet and our future.
Potential Markets
Although there are several markets available all over the world right now, we are currently focusing our energy and attention on expanding and developing overseas in Russia. Unfortunately Russia is very advanced already and has recently begun to expand their business’s efforts towards reaching the consumers within the “green” market. Russia currently has one company that is already succeeding within this field due to the fact that they are local from the country, start up cost are high and equipment is more accessible. However, given the current economical conditions anything is possible and any business can be successful to those willing to take risks.
Absolute and Comparative Advantage
I would not say that Russia has a comparative or absolute advantage overall. We both have the equal resources and opportunities to gather materials necessary, we are both large in size, and we both have the same advances and availability of technological resources.
Business Opportunity Analysis
As a group we believe Russia to be the wisest choice for expansion of our green house constructions. Russia will also provide much cheaper labor costs. One difficulty may be to assign or find a manager within the country based on the simple fact that many of the people in Russia are still living within a communist government and may not fully grasp the concept of working together in a group setting and is use to a dictatorship style of managing.
S.W.O.T Analysis
We offer much strength such as our ability to understand and know how to work well in groups within businesses. We process previous knowledge of technologies and can use them to our benefit in terms of communicating, getting projects done, and networking.
Our only downfall may be that we are unfamiliar and will need to strive to adapt and educate ourselves on the foreign politics and government system.
We feel that our greatest opportunity would be to go overseas and establish new relationships and perceptions of Americans.
One hurdle that may prove to be a challenge would be getting materials overseas if need be. Because there is also such a large body of water dividing Russia and The United States the transporting of materials/freight.
Action Plan
Our goal is to establish a reputation and a solid foundation overseas to represent our future and our many efforts we are taking to better our environment and future.

MODULE 2 ( By Sarah Prady)
Analyzing International Competitors

Potential Competitors
Currently there are several competitors in Russia are the Passive House Institute Russia, The Russian Sustainable Building Council, and building science researchers. But according to, the energy conservation in general has not gained very much attention or business. Zagorodny Proekt is currently a very powerful developer in the region and he currently has a showcase home. The home was open to visitors for a year and the performance was monitored. The homes are also going to be sold cheaper than market value. The houses were very well designed. The house consisted of concepts of insulation, airtightness, optimal solar exposure, a photovoltaic system, solar hot water heat pump, and a Windmaster automated system taht opens up the windows and controls the blinds and exterior awnings for shade in order to regulate an interior climate.

Competitive Advantages
We feel that we have a competitive advantage because the demand conditions are high due to the recently talked about environmental issue that are rising all over the globe. Many people are now interested in owning and buying homes now a days more so that they were in the past. There is simply an abundance of work and opportunities in Russia. We also have the ability to still have full contact and connections with America and therefore we will never fall short of supplies and/or materials. We also know that the value of the dollar goes further and is worth more in Russia. We feel that we can add a few more benefits to our green homes that will be greatly beneficial to the possible consumers who will be purchasing the homes.

International Strategies
Our international strategy is simple, we plan to do a very similar exercise as the previous green house developers have done by building some of our own green houses in Russia and then have the SAME families who previously resided in the other homes to reside in ours. We will monitor everything throughout the entire year and then compare their experiences with one another. Our homes offer more amenities that the others and therefore we feel very confident that they will appreciate and want to purchase our green homes overall.

Action Plan
We plan to develop relationships and possibly some partnerships with some of the existing builders in Russia already. If we establish relationships with these builders we can work together and possibly expand much more rapidly in Russia than we originally planned. Profits, recognition, and global expansion could increase significantly.

MODULE 3 (By Sarah Prady)
Assessing the Economic- Geographic Environment

Geographic Influences
Russia seems to have the best of both worlds. Russia literally has “a little bit of everything” as far as their geography is concerned. Russia offers large size, positive climates for vegetation, forests, grasslands, semi desert, and water masses. They also have vast mountains, snow, sun, rain, wind, etc. Our homes can be specially designed and engineered to be constructed and built in certain climates accordingly to fit the expectation and needs of that specific geographical region.

Major Products and Industries
Russia has a lot of machinery construction mainly in Moscow, a chemical and petrochemical industry that provides chemical raw materials and organic chemicals, fuel and energy, and the extract metal ores, and other metal materials. Lastly, they offer a agriculture complex that specializes in the production of agricultural products.

Current Economic Conditions
According to, Russia is currently on its way towards integration into the world’s economy and stable economic development. Russia created a legislative basis for economy development and since then it has negatively affected the country’s economy and has resulted in decline of all indexes. However after it was all said and done they have now began to recover and the country now has a steady rise in its economy. There has been much GDP growth and has caused an increase in the confidence of consumers as well as entrepreneurs. Foreign investment inflow increased at the same time the capital outflow practically stopped.

According to, the transportation infrastructure in Russia is very underdeveloped. Commercial transportation relies on rail. The trucking industry is only minimally developed and the roads are poorly designed for long distance. The railroad system is one of the most extensive railway systems in the world. The highway system consists of 948,000 kilometers or road that serve primarily industries and farms. They are poorly maintained by governmental highway systems.

Action Plan
It is going to be necessary to first of all work on some different forms of transportation since the rail is the only efficient method currently. We are also going to need to work on the roads in order to ensure that construction sites as well as living in those homes can be more accessible and easier for people to get to. We need to start networking and working on negotiating possible contracts.

(Created by Michael Wardingley)
Demographic Trends There is great concern recently for Russia and their population. The death rate for non-natural causes has skyrocketed in recent years. A large portion of that rate is directly contributed to alcohol. The life-expectancy rate has also dropped significantly. Russia owns one of the world’s lowest fertility rates as well. The Russian population is also aging rapidly which will cause all of these problems to become more severe. Over the next 20 years, these issues will cause a very unstable population unless steps are taken to correct them. (Adamson, 1997)
Cultural Analysis
The social and cultural climate in Russia has changed dramatically since the early 1990’s. Family issues are central to the problem. The divorce rate jumped which led to many single mothers. They are trying to manage the household duties as well as provide for the family. Like many countries, women are primarily employed in lower paying jobs and the unemployment rate is high as well. This has caused many women to stay home and care for the family on a much-reduced income. ("People and society,," )
Social Institutions Another social issue facing Russia is the high drug use rate. With the easy availability and very little law enforcement effort, drug use is at an all time high. This has led to an increase in HIV and other drug related viruses affecting thousands of people. ("People and society,," )

Informal Trade Barriers While Russia is a developed country and has a long history of global trade, some of the social issues discussed can prevent a company with trading in Russia. Consistent and competent workers are a best trade asset and Russia is lacking in some ways.
Action Plan A team of counselors will arrive ahead of the operations and begin a series of counseling sessions, random drug testing and awareness classes to help the local residents understand the benefits and consequences of alcohol and drug use.

(Created by Michael Wardingley)
Government and Politics
Russia is experiencing a de-modernization of their political system. They have put a new strategy in place to make more of the government centralized and contained. Power is being taken away from the regions and most of the main decision-making is being done from the centralized government. Most residents see all elections as meaningless. With their one party system, most don’t see an alternative and have lost faith in the voting system. (Andrew Monaghan, 2011)
Formal Trade Barriers In 2011, Russia became the final developed country to enter an agreement with the World Trade Organization. This allowed more control over tariffs, taxes, and other trade agreement rules that were not previously a part of. (William A Kerr)

Promoting Global Business
Russia was once a state controlled economy and because of this didn’t have much growth globally. Finally they began to break the mold and became a stable and rapidly growing market oriented economy. They made several key decisions with Canada and built a strong business relationship with the country. They have many resources that are attractive to many businesses and are building toward more and more global business. (Foreign Affairs and International Trade Canada, 2011)
Intellectual Property
This is a developed country and has many different avenues not only for the development of intellectual property but also for the safety and protection of the property as well.
Action Plan
With so many natural and man-made resources available, Russia is a very attractive country to expand globally into. Thanks to their admission in to the WTO, many barriers have already been lifted to make it easier to transition. Selecting the best location for the company is the first component to be accomplished. Determining what city will be able to offer the most is key. Organizing a task force to brainstorm and select the location will be done next.

(Created by Michael Wardingley)
Strategic Planning ACME Construction, Inc. seeks to provide new construction and modernization services to the country of Russia through joint cooperation with the Bank of America and the US Department of State. It is our mission to employ local imported and domestic economic resources to achieve this goal. We want to maintain a long-term relationship with Russia and continue to better the Russian economy while creating more business as well.

Entry modes: We will gain entry through negotiation with Russian authorities, the US Department of State, and the Bank of America.
Organizational structure:
In order to minimize initial costs and to ensure the future of ACME Construction for years to come, we will be solely based in the gaining city and ensure all corporate business is conducted there. Based upon results, it may be necessary to review the number of locations we are able to operate in
Strategic Alliance:
Our main workforce will be comprised of local workers and supplies will be contracted through local suppliers. It is vitally important to help make the local economy stronger through use of local workers and resources rather than take away jobs. While there are many construction companies available, we aim to partner with several companies and create a specialization that is very much needed in the region.
Action Plan:
Our operations will be unique in Russia but will remain a limb of the United States operations branch. Our goal is to provide the people of Russia a quality company with not only fair pricing, but also with timely results and no harassment. Our aim is to develop a long-term operation in Russia and to help beautify and modernize the country as well. Our main focus will be on the improvement and rebuilding of local facilities and structures. The safety of our employees and equipment is vitally important to the mission being accomplished so we must establish procedures and protocols to remain safe. We will employ local security guards, modern fencing, CCTV as well as working with local law enforcement to remain vigilant


( By Amer Mesallem )
Economic and Financial Risks
The principal risks in 2012 are external, namely the potential impact on Russia of unfavorable developments in the global economy, above all the possible deepening of the crisis in the euro area, but also a less likely sharp slowdown in the growth of the Chinese economy. The situation in the euro zone is now threatening, with a real risk that one or more countries could soon default, leading to a crisis in European economies that will inevitably have negative repercussions for Russia, a major trading partner with the EU. But there is also another risk for Russia, in my view, namely that the country’s top leadership is unprepared for negative developments, showing a surprising complacency, with revival of the smug ‘safe haven’ rhetoric which was a feature of the run up to the crisis of autumn 2008. If a crisis does develop, there is a real risk that much needed institutional reforms, including further privatization and measures to improve the climate for investment, domestic and foreign, will be postponed yet again. Ultimately Acme construction Inc. should consider these risks but are ultimately there for engineering services and can potentially manage those risks.
Social and Cultural Risks
It is clearly understood that Russia is becoming a more western orientated culture. Doing business there requires understanding of cultural norms. That exists in Russia. There is a sense of collectivism that exists there. Egalitarianism is also prevalent there. There are deteriorating social conditions for the poor. Understanding and tolerance is crutual to flow in the society. One needs to show a sense of mutual liking and emotion.
It seems that the cultural is swing more toward the western Ideal trend so western businessmen and companies should have a relatively easy time doing business

Political and Legal Risks
Russia has had 4% economic growth, 6% unemployment and 4% inflation. The shadow market of corruption that is given a pass by the Putin government increases the cost of doing business and by extension the political risk.
The Foreign Corrupt Practices Act (FCPA) prohibits an offer or payment of anything of value to a foreign official, foreign political party, or candidate for political office, for the purpose of influencing any act of that foreign official in violation of the duty of that official, or to secure any improper advantage in order to obtain or retain business.
You as a U.S, investor need not engage (nor should you) in any activity that violates the FCPA, but your still are paying a premium to deal with vendors, contacts and their network when you invest or do business in Russia.
After all those who help you and are not subject to the FCPA need to participate on the ground as custom dictates and it dictates paying bribes. This increases what they charge you. Because it is unregulated and not an acknowledged policy of the Russian government it is a volatile market that increases political risk.
Long-term caution is required because no one knows if or how Putin can control the corruption market. Until there is some public display of controlling these practices with the intent of eliminating them you will have this particular political risk.
How it is addressed will create other political risks such as internal power struggles among Putin’s supporters and civil unrest as the Russian economy adjusts to any changes. Civil unrest may occur if the cost of food and energy rise due to policy changes and less disposable income generated by the corruption market.
Putin’s challenge if he decides to take it will be to make Russia more attractive to direct foreign investment and businesses by lowering the cost of doing business through policies that eliminate the corruption market. This while keeping a lid on the adverse impact on the economy caused by these new policies.
Module 11: Product and Target Market Panning

Product Concept
Acme Construction Services Inc. is going to Provide new construction services to Russia through a joint cooperation with Bank of America and the US Department of State. We would like to employ local economic resources to achieve this. Acme would like maintaining a long-term relationship with Russia and to continue to grow the Russian economy and to also attract more foreign investment to Russia.
Product Life Cycle
There is no life cycle to this product. We hope this relationship is ongoing
Branding and Packaging
There is no need for Branding and Packaging. We are not trying to sell a product but a service that has to do with construction.
Target Market
The primary target market for the time being would be the World Bank rebuilding programs. Also all state entitles the soviet government and private organizations threw Bank of America and Also the Soviet Government and the US Department of state. These entities give the approval of a lot of the building project in this region. Commercial marketing might be a wise Idea in this more westernized post cold war Soviet Union.

Module 12: Designing Global Distribution Strategy.

Infrastructure Analysis
The Russian government should invite private investors to finance the country’s rickety infrastructure, which is currently holding down economic development after enduring years of neglect, the country’s top transportation officials said on Friday.
“When and if a decision is made to use private sector financial instruments, like infrastructure bonds, they must be issued and backed by the government to avoid the temptation of downgrading on behalf of rating agencies,” Russian Railways President Vladimir Yakunin said at the International Economic Forum in St. Petersburg.
Russia’s infrastructure development has continued to lag behind that of other emerging nations due to a lack of adequate investment from the private sector, according to the roundtable participants, which included Transportation Minister Maxim Sokolov, Yakunin and Aeroflot CEO Vitaly Savelyev.
While the United States and many European countries invest close to six percent of their GDP in infrastructure, Russia invests just around 2.5 percent, Yakunin added.
Russia, like most former Soviet states, inherited the bulk of its infrastructure facilities from the Soviet Union, but harsh climatic conditions, insufficient state investment and widespread corruption have pushed most into a state of disrepair or near-collapse.
Russia trails all developed countries in the sheer scale of infrastructure investment, and also has the second lowest score among 14 countries for the uneven distribution of its physical infrastructure, according to KPMG’s Competitive Alternatives 2012 report released in May.
The government said, however, that it is well aware of the problems and plans to invest heavily in infrastructure in line with its infrastructure development program till 2030.
Over the past ten years, the federal government has spent 1.9 trillion rubles ($57 billion), or about 45 percent of its federal target program funds, to improve the state of the country's infrastructure, said Maxim Sokolov, Russia's minister of transport.
"The government needs to attract outside sources of financing because there’s simply not enough money in the state coffers to fulfill the various infrastructural projects," Sokolov said. "It is crucial to attract private sector investment and foreign expertise in infrastructural management, too.”
Russia still loses from seven to nine percent of its GDP due to poor roads, the Ministry of Transport said in a separate report. Commercial goods can only travel an average of 180 miles per day in Russia, compared to 900 miles in Europe, the report said.
Infrastructure Analysis
Much more serious, however, is the high level of corruption and the absence of a level playing field for contractors in Russia, especially in the regions, he said.
“There’s a world of difference between the way well-connected contractors and private contractors are treated in many regions,” Thibault de Silguy said. “Well connected insiders appear to have monopolized various construction projects, effectively discouraging private investors.”
The perennial problem of corruption in Russia has also prompted other executives to suggest that a lack of investment is not the primary problem infrastructure development in Russia is facing.
“The main issue is horse-and-buggy regulation and the presence of legions of rent-seeking officials in the sector,” said David Fass, the CEO of Macquarie Group Limited in Europe, Middle East and Africa.
Over the past decade, yields on investment in infrastructure projects have tripled, indicating that foreign investors would gladly provide infrastructure equity dollars, Fass said. However, there is an acute need for fair play in awarding contracts as well as creating equal conditions for all contractors, he added.
Distribution Channel
Distribution should not be a problem, since we are working with construction companies that are trying to rebuild existing infrastructure. We have to be able to maintain our supply chain and worry about keeping existing chains open as well as using other ones. This can be accomplished with the help of the US State Department and Russia. We will need to also be aware of keeping our food supply active and open.

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