INT220 Milestone Two

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Southern New Hampshire University *

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Feb 20, 2024

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Mike Leal Jr Professor Erik Nikodem INT 220 Business Brief Template Course Project Section One: Drivers for Global Entry Country Selection South Africa Purpose of Global Expansion Global expansion is described as "the process by which companies from one market (often referred to as their home market) expand operations into a foreign market (often referred to as the target market)" (Smartling, 2023). Domestic trade firm sales might become stagnant in some situations, resulting in revenue loss and a decrease in overall sales. Global growth would help the corporation overcome its slump. Some of the most significant advantages of expanding to other nations would be the generation of new revenues, the discovery of new customer marketplaces and intakes, and the discovery of new competitive marketplaces. "These benefits demonstrate to new customers that your company meets their wants and needs, as well as adapts to the cultural nuances of the market" (Velocity Global, 2023). Business Impacts of Global Business The expansion of a local corporation into international trade is always seen as a complicated system. This is due to the careful examination and evaluation of aspects that might make or ruin a business. These are both internal as well as external causes. Every firm pursuing worldwide development must assess its everyday business tasks so that owners may choose whether innovation is appropriate for their organization. The various demands and desires of returning and prospective clients, the rules and regulations that the business follows, the general state of the market as a whole, competition within the market they are targeting, the cost structure of the goods, and resource availability are some of the various kinds of variables which could possibly impact a business going global. All these functions might be damaging to the firm. As a result, these functions necessitate adjustments to the firm in order for it to perform successfully in a global commerce market. Societal Impacts of Global Business Several things may have an influence on society inside a worldwide corporation. "Since prehistoric times, humans have sought remote locations to live, produce, and exchange goods, made possible by advances in technology and transportation" (PIIE, 2022). When discussing job opportunities, if a company is seeking global growth, it will look for overseas personnel to develop a wider labor pool. "Between 2007 and 2015, foreign-owned enterprises operating in the United States recruited more Americans than US private employers. Demand for more

highly trained manufacturing employees in sectors such as management, engineering, financing, computer, and mathematical jobs, and sales are expected to rise" (PIIE, 2022). Having a global structure inside your firm may help you build a stronger foundation and stable ties with your collaborating nations. Cultural Considerations for Global Business One's country's culture significantly influences the company and how they make decisions. It is described as the buying habits of consumers and the actions of various institutions inside their country. Before entering an unfamiliar market, it is critical that the firm grasp the customs and traditions of the latest market into which they seek to penetrate. Cultural preferences, religious beliefs, and ethical ideals are cultural elements that might help with decision enlargement. Section Two: Market Profile Cultural Profile Category United States South Africa Commonly Spoken Languages English (also Spanish) IsiZulu, IsiXhosa, Afrikaans, Sepedi, English, Setswana, Sesotho, Xitsonga Commonly Practiced Religions Christianity Christianity & Islam Power Distance Index (PDI) 40 49 Individualism Versus Collectivism (IDV) 91 65 Masculinity Versus Femininity (MAS) 62 63 Uncertainty Avoidance Index (UAI) 46 49 Long-Term Orientation Versus Short-Term Normative Orientation (LTO) 26 34 Indulgence Versus Restraint (IVR) 68 63 Political and Economic Profile [Compare and contrast important political and economic factors for your selected market against those in the domestic market. Factors should include political systems and ideologies, current leaders, economic measures or characteristics used in classification, and government intervention on trade.] Category United States South Africa Political System Democracy Republic Current Leaders President Joe Biden President Cyril Ramaphosa

Category United States South Africa Economic Classification Mixed Economy Dual Economy Economic Blocs Impacting Trade United States-Mexico- Canada Agreement (USMCA) Southern African Development Community (SADC) Gross Domestic Product $26.24 Trillion $400.550 billion Purchasing Power Parity 1.000 6.981 Gross Domestic Product Per Capita $59,939 $6,120 Legal and Regulatory Profile Trade restrictions are a major concern for firms in both South Africa and the United States. South Africa has various trade treaties with other African countries, as well as the European Union and China. The country also belongs to the World Trade Organization (WTO) and follows its laws and regulations. Importers and exporters must follow customs procedures and get the appropriate permits and licenses. Trade limitations in the United States are controlled by a range of laws and regulations, including those pertaining to national security, intellectual property, and environmental protection. The nation is also a member of the World Trade Organization and has trade agreements with several other countries. Regulation of products or services is another area where South Africa and the United States vary. Products in South Africa must adhere to a variety of technical standards pertaining to safety, health, and environmental protection. There are also industry-specific rules, such as those governing mining, electricity, and telecommunications. Product regulations in the United States are overseen by many federal organizations, including the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the Federal Communications Commission (FCC). These organizations establish guidelines for product safety, labeling, advertising, and other issues. Legal procedures for doing commercial transactions differ in South Africa and the United States. Contracts must be in writing in South Africa to be enforceable, while oral contracts may be accepted in certain circumstances. Typically, disputes are settled by lawsuit or arbitration. Contracts in the United States can be oral or written, but written contracts are often preferable. Litigation or alternative dispute resolution procedures such as mediation or arbitration can be used to resolve disputes. Important constraints or documents are also critical considerations for organizations operating in both South Africa and the United States. Foreign ownership is restricted in some areas in South Africa, including banking, mining, and telecommunications. Businesses must also abide by labor regulations governing minimum pay, working conditions, and other elements of employment. Businesses in the United States must follow a variety of federal and state rules concerning employment, taxation, and other issues. Permits, licenses, contracts, and other legal papers may be required as documentation.

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In conclusion, while there are some parallels between the legal and regulatory requirements of the South African market and those of the US market, there are also significant distinctions that enterprises operating in both nations must be aware of. These include trade limitations, product or service laws, legal processes for commercial transactions, and significant constraints or documentation. Section Three: Market Considerations Monetary Considerations [Explain how monetary considerations, such as currency, exchange rates, and exchange-rate management, would impact the organization’s decision to expand into your selected market, using current exchange rates between your selected country and the United States to support your explanations. Complete the table below to support your explanations using current exchange rates.] Category The U.S. Dollar [Insert Country Selection From Course Project’s Currency] Exchange Rate [Insert information.] [Insert information.] Management and Logistics Considerations [Explain management and logistics practices that best address human-resource considerations for your selected market, such as management approaches or staff and labor laws, and their impact on policies and procedures.] Mode of Entry Considerations [Describe advantages and disadvantages for traditional modes of entry that would be most appropriate for entering into your selected market.] References Conversion rates - Purchasing power parities (PPP) - OECD Data . (2023). theOECD. http://data.oecd.org/conversion/purchasing-power-parities-ppp.htm GDP by Country - Worldometer. (2023). GDP by Country - Worldometer. https://www.worldometers.info/gdp/gdp-by-country/ GoGlobal, & Bui, M. (2022). Spotlight on South Africa: Global Business Insights. GoGlobal. https://goglobalgeo.com/blog/spotlight-on-south-africa-global-business-insights/ Looking to expand to South Africa? Here’s what you should know. (2022, June 15). The Polyglot Group. https://www.thepolyglotgroup.com/globalpedia/south-africa/

South Africa - Import Requirements and Documentation . (2023). International Trade Administration | Trade.gov. https://www.trade.gov/country-commercial-guides/south-africa- import-requirements-and-documentation The Ultimate Guide to Global Expansion | Smartling. (2023). The Ultimate Guide to Global Expansion | Smartling. https://www.smartling.com/resources/101/the-ultimate-guide-to-global- expansion/#:~:text=What%20is%20global%20expansion%3F,to%20as%20the%20target %20market ). Velocityglobal. (2023, April 28). The Ultimate Guide to Global Expansion: 5 Benefits of Global Expansion. Velocity Global. https://velocityglobal.com/blog/the-ultimate-guide-to-global- expansion-5-benefits-of-global-expansion/ What is Globalization? (2022, October 24). PIIE. https://www.piie.com/microsites/globalization/what-is-globalization? gclid=Cj0KCQjwtsCgBhDEARIsAE7RYh1qAroEXZS803L- Sa78K4TaJPOmwvoGNE0ReQQeUraGfvKxlyoCC-MaAss5EALw_wcB

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