INT 220 Business Brief Template-Violet Bass

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INT 220 Business Brief Template Course Project Section One: Drivers for Global Entry Country Selection China Purpose of Global Expansion Expanding globally helps local business grow by reaching more customers worldwide. This brings advantages like selling more products, making more money, and reducing risks. When companies go global, they can save money by making things in bigger amounts, hire skilled people from different places, and even team up with other businesses. It also lets them learn new things and use the latest technologies. Being known internationally makes a business stronger and more competitive. While its exciting, companies need to be careful, do research and plan well to succeed in new markets. Business Impacts of Global Business Expanding globally affects many parts of a business. In planning, companies need to think about different countries. Marketing changes to suit diverse customers. Supply chains get more complex, managing how things are made and delivered worldwide. Hiring and working with people from various cultures becomes important in human resources. It’s like playing a bigger game, where every move affects how well the business does. Adopting and planning carefully helps business thrive in the global market.

Societal Impacts of Global Business Global business expansion changes society in many ways. It mixes cultures as people from different places interact. Transportation improves goods to move globally. Jobs are increasing in various regions. Infrastructure like road and building develops in growing markets. However, it also affects the environment, sometimes harming it. So, while global business brings benefits, it is important to manage it wisely for positive impact on culture and employment, Cultural Considerations for Global Business Before going to new countries, businesses must study their cultures. This is crucial for success. Different cultures have unique customs and ways of doing things. Understanding these helps companies make products and messages that people in those places will like. It’s like speaking the same language. Businesses need to know about local tradition, beliefs, religions, and how people buy things. This knowledge guides them in making smart decisions when expanding globally, creating products that fit each culture.

Section Two: Market Profile Cultural Profile Category United States China Commonly Spoken Languages English Mandarin Commonly Practiced Religions Christianity 52.2% of Unaffiliated persons Power Distance Index (PDI) 40 80 Individualism Versus Collectivism (IDV) Highly Individualistic More Collectivism, but individualism is growing Motivation Towards Achievement and Success (MAS) Moderately masculine, valuing achievement and competitiveness Masculine, but balanced with feminine values. Uncertainty Avoidance Index (UAI) Low uncertainty avoidance, embracing change and risk Moderate uncertainty, with a preference for rules and regulations Long-Term Orientation Versus Short-Term Normative Orientation (LTO) Short-term normative orientation Long-term orientation Indulgence Versus Restraint (IVR) Tends towards indulgence, emphasizing personal enjoyment and fulfilling desires. More restrained Political and Economic Profile Category United States China Political System Federal Republic with a Presidential system Single-party socialist republic Current Leaders Joe Biden Xi Jinping Economic Classification Highly developed mixed economy Developing, socialist market Economic Blocs Impacting Trade North American Free Trade Agreement (NAFTA), (United States-Mexico-Canada Agreement (USMCA), Trans- Pacific partnership (TPP), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), World Trade Organization (WTO) Shanghai Cooperation Organization (SCO), Reginal Comprehensive Economic Partnership(RCEP), Belt and Road Initiative(BRI) Gross Domestic Product 26.95 trillion in 2023 $17.52 trillion in 2023

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Category United States China Purchasing Power Parity $23,666- 2023 Estimate Billions, $33,694 Estimate Billions Gross Domestic Product Per Capita $80,412 in 2023 $12,621 in 2023 Legal and Regulatory Profile In the United States, there rules and laws that everyone needs to follow. The way these rules work is based on common law, and there are federal rules for the whole country and separate rules for each state. The main rules are written in the constitution. Different agencies like the SEC make sure that companies are doing things correctly. Businesses can take different shapes, like a one-person business or a big company. The law also protects thing people create, like inventions and art. China also has rules that everyone needs to follow, but the way they work is a bit different. Their system is based on civil law, and the constitution focuses on the Communist party leading the country. There are different types of businesses in China, including some owned by the government. Both places have rules to follow, but how they enforce these rules and the kinds of businesses they have can be different. In the United States, businesses have a lot of freedom, and there are many types of them. In China, the government has more say in certain areas.

Section Three: Market Considerations Monetary Considerations Category The U.S. Dollar China Exchange Rate $1 USD to 7.1948 Chinese Yuan (CNY) 1 Chinese Yuan (CNY) to $0.14 USD Management and Logistics Considerations In the United States, human-resource considerations revolve around an individualistic management approach, emphasizing employee-empowerment and innovation. Compliance with labor laws, such as the Fair Labor Standards Act and Occupational Safety and Health Act, is critical. HR polices need to align with regulation on issues like minimum wages, working hours, and workplace safety, and offering flexible work arrangements and competitive benefits is often essential for talent attraction and retention. The cultural context emphasizes personal achievements, and HR practices should reflect this emphasis on individual contributions. In China, a more collective and relationship-oriented management style is predominant. Building strong relationships and maintaining harmony within the team are paramount. Compliance with Chinese labor laws is crucial for effective HR management. HR policies should be adapted to the cultural nuances, such as the importance of “guanxi” (relationship) and consideration of the “hukou” (household registration) system. Recruitment and retention strategies should focus on long-term career development opportunities and fostering social connections within the workplace, aligning with the cultural emphasis on collaboration and group harmony in Chinese business culture, balancing these diverse management and logistics practices is essential for successful human-resource management in both U.S. and China

Mode of Entry Considerations Entering the U.S market through a wholly owned subsidiary presents several advantages. Firstly, it provides the entering company with complete control over its operations, allowing for the direct implementation of strategic decisions. This autonomy extends to brand management, as the company can maintain control over its image and messaging in the market. Additionally, establishing a wholly owned subsidiary facilitates better cultural alignment, enabling the integration of the company’s values and practices seamlessly. However, this approach comes with significant challenges. The high initial investment required for infrastructure, staffing, and marketing can be a barrier, particularly for smaller companies. Navigating complex U.S. regulations and ensuring compliance poses additional hurdles, requiring thorough legal and regulatory understanding. Moreover, without a deep understanding of local market dynamics, the company may struggle to adapt its products or services to meet the preferences and demands of U.S. consumers. The lower labor and material costs in China can be a significant advantage for multinational investors considering market entry. For example, the average minimum wage for a full-time job in China, at $347 per month, is notably lower than the minimum wages in the United States, which range from $7.25 to $17 per hour, depending on state regulations. The cost advantage can contribute increased profitability and competitiveness, especially in industries where labor-intensive processes and material inputs play a substantial role. However, despite these cost advantages, multinational investors must navigate challenges related to relationship cultivation and government interactions in China. Building strong relationships, often referred to as "guanxi," is essential for successful business operations in the Chinese market. Local partners and networks play a vital role, and the establishment of trust is

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crucial for long-term success. Understanding and respecting Chinese cultural norms, communication styles, and business etiquette are integral components of building effective relationships. Moreover, dealing with the Chinese government's regulations and policies can be complex. Navigating bureaucracy and ensuring compliance with local laws and regulations can pose challenges for foreign investors. Establishing a positive relationship with government authorities is crucial for smooth operations, and this requires a nuanced approach that blends cultural sensitivity with adherence to legal requirements. Multinational companies must invest time and resources in understanding the intricacies of the Chinese business environment to effectively manage these relationship and regulatory challenges. In my view, each country presents its own set of advantages and disadvantages. Placing a business in a country with volatile regulations, exemplified by uncertainties like U.S.-China tariffs and sudden spikes in minimum wages, poses a significant risk to a company's future stability. Despite the potentially higher operational costs in the U.S. compared to China, the U.S. market stands out for its reliability in terms of regulations and government incentives. The robust and predictable regulatory environment in the U.S., coupled with supportive government initiatives, can contribute to the long-term resilience and success of a business, offsetting the immediate cost differentials. Ultimately, weighing these factors becomes crucial in determining the most strategic and sustainable location for business operations.

References U.S. Department of State. (2023a, December 7). China (includes Hong Kong, Macau, Tibet, and Xinjiang) - united states department of state . U.S. Department of State. https://www.state.gov/reports/2022-report-on-international-religious-freedom/china/ #:~:text=In%202021%2C%20the%20U.S.%20government,comprising%20less%20than %201%20percent. China’s GDP in 2023 expands 5.2% - analyzing key economic data . China Briefing News. (2024, January 18). https://www.china-briefing.com/news/chinas-gdp-in-2023/#:~:text=China’s%20economy %20and%20society%20in,Industrial%20added%20value*%3A%20%2B4.6%25 Power distance index . Clearly Cultural. (n.d.). https://clearlycultural.com/geert-hofstede-cultural- dimensions/power-distance-index/ O’Neill, A. (2023, November 24). US GDP per capita 2028 . Statista. https://www.statista.com/statistics/263601/gross-domestic-product-gdp-per-capita-in-the- united-states/ Wikimedia Foundation. (2024f, February 5). Economy of china . Wikipedia. https://en.wikipedia.org/wiki/Economy_of_China Discover the top 5 advantages of international expansion. Parakar. (2023, August 11). https://parakar.eu/knowledge/eu/discover-the-top-5-advantages-of-international- expansion/#:~:text=The%20benefits%20of%20international%20expansion,advantage %20and%20valuable%20learning%20experiences. Dunung, S. (2019). Global Business Management . (1st ed.). FlatWorld China minimum monthly wages. (n.d.). https://tradingeconomics.com/china/minimum- wages#:~:text=Minimum%20Wages%20in%20China%20remained,690.00%20CNY %2FMonth%20in%202006. Federal Reserve Bank of St. Louis. (n.d.). Federal Reserve Economic Data: Your trusted data source since 1991 . FRED. https://fred.stlouisfed.org/release/tables?eid=243906&rid=387 US-china trade war tariffs: An up-to-date chart | Piie. (n.d.-aa). https://www.piie.com/research/piie-charts/us-china-trade-war-tariffs-date-chart

INT 220 Business Brief Template-Violet Bass

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