drivers of global business 1
One of the challenges facing global business leaders is to determine which international markets have a sufficiently acceptable environment in which to operate.
Based on your Readings and Learning Activities, consider Barto Group, a Swiss candy company headquartered in Zurich, Switzerland. It is a growing candy company with 2016 sales of $625 million, 920 employees, and six manufacturing plants. Recently, its top management has been considering several possible expansion locations including Slovenia which is one contender. Based on your Reading and Learning Activities, discuss the following:
- What would Barto’s top management want to know about the business environment
Just response each posted # 1 to 3 down below only
Hi Class, hope all is well.
Some of the things that Barto’s management should consider before deciding on what country to expand in is the foreign exchange rates and what kind of rates there are. “Provides some insurance against foreign exchange risk: the adverse consequences of unpredictable changes in exchange rates (Hill & Hult, n.d.). Each exchange rate is different and knowing them all will enable you to pick which one best fits your company. It would be important to know what exchange rate you are getting into and how they will affect you company.
There are several things that Barto Group and the management team should consider before expanding to Slovenia. The exchange rate in that area is something to consider because it could affect their profit. Also, they want to look at the economy and how other business are operating and if they are succeeding. The government and how it is run is a very important factor because if the interest rates fluctuate to much because of how the government is run this good cause bad things to happen but it could also be good. So, knowing all these things before expanding into another area is something that should be research and taken into consideration. Our reading tells us that it is good to have productions in other location but you have to be cautious and aware of what is going on in that country (Hill & Hult 2018).
Hello Class, for the unit two discussion we are to talk about Barto Group, a Swiss candy company possibly expanding into Slovenia. Management should be aware of the business environment before they make a decision to expand.
When looking to venture your business into another country you would need to know the stability of the economy and financial sector of that country. Slovenia is a prosperous country but is still impacted by the global economic crisis. While other countries have recovered even to greater markets than pre-crisis Slovenia has not, and they do not commonly raise capital through the market but mainly rely upon the traditional banking system to meet their needs. “The price level of goods and services in Slovenia is relatively high for the region due to the high cost of labor and lack of competition in certain sectors. The market generally determines prices. The government controls the prices of oil, natural gas, railway transport, and some other products. The government may also influence the pricing policies of companies under its direct or indirect control”. (export.gov., 2017). If you cannot rely on an economy to have confident exchange rates due to its instable financial structure, coupled with high costs of operations it may be a better idea to look elsewhere to expand your business.
Export.gov, Slovenia Pricing,2017, www.export.gov/article?id=SloveniaPricing, Export.Gov