Please use Canada and Brazil and the Hotel/Resort Industry as a reference.
- Identify the type of economic system in place by each host candidate. If the economy is “mixed,” briefly explain if it leans more toward command or free-market ideologies. Are there industries the government owns or heavily regulates? Offer concise examples to support your thesis.
- Using TradingEconomics.com, Knoema World Data Atlas, or the WB World Development Indicators and IMF statistics portal, research the major economic indicators below. Be sure to complete each indicator with the most recent year’s value and present value (some are available quarterly for the year in progress). Summarize any forecasted trends when available (1 to 3 years allow for basic projections). For aid in creating this module’s MARs index, it may be helpful to note any world rankings for your candidate countries as well as the total or highest and lowest values in any scoring.
Lastly, select at least three economic indicators related to your industry that further differentiate the foreign candidates from one another. Note: Many research portals offer the ability to compare two or more countries at once to save you research time.
|Economic Measures and Indicators||Values, %, Growth Rates, Short-Term Forecasts, World Ranking, Trend (when available)
(MRY, MRQ, and any forecasted trend; abbreviate where proper; USD terms)
|Country A (Advanced)||Country B (Emerging)||United States|
|GNI per capita ($ per person)|
|GDP per capita ($ per person)|
|Share of World GDP at PPP ($, purchasing power parity adjusted)|
|Real GDP Growth (annual %)|
|Government Sovereign Credit Rating (agency and rating)|
|Balance of Trade ($)|
|Current Account Balance (% of GDP)|
|Government Debt (% of GDP)|
|Private Debt (% of GDP)|
|Real Interest Rate (%)|
|Inflation Rate (CPI)|
|Minimum Wage ($/hour)|
|Unemployment Rate (% of the labor force)|
|Labor Force Sector Participation Rate: Manufacturing, Service, & Government (%)|
|Labor Productivity % Growth (GDP per person employed %)|
|Producer Price Index (PPI)|
|Industry Production Growth Rate (%)|
|Real Domestic Demand ($)|
|Median Income per Household ($)|
|Household Disposable Income ($)|
|Gross Savings (% GDP)|
|Income Distribution Equality (“GINI Coefficient”)|
|Misery Index (ranking)|
|Economic Indicator Impacting Your Selected industry #1 of Your Choice|
|Economic Indicator Impacting Your Selected industry #2 of Your Choice|
|Economic Indicator Impacting Your Selected industry #3 of Your Choice|
- A nation’s economic prosperity is reliant on the extent to which economic activities take place freely and without government restrictions. Contrast the degree of economic freedom (ranking) of each candidate’s market using the Heritage Foundation’s Index of Economic Freedom.
Review the descriptions of the index’s 12 subcomponents. Are candidate’s rankings consistent with your expectations for your developed and emerging market candidates? Where do you see major concerns or opportunities among the 12 subcategories?
- After reviewing the Fraser Institute’s Index on Economic Freedom, which candidate’s economic development is managed most effectively? In what areas of the index did you to make this assertion?
- Leveraging the EIU, or Economist Intelligence Unit Country Risk Briefing Report (Shapiro Library database), give a brief overview of the current forecasted macroeconomic subcategory risk score, and include a brief explanation of analysts’ top upcoming risk scenarios. Do you concur?
- Do either of your candidate governments participate in the economy through direct ownership of rivals or suppliers along your value chain? What pressures would this bring on firms trying to internationalize into those markets?
- Are citizens consuming goods and services readily, or are they saving at high rates? What does this say about their view of the economy? You can verify this by looking at the Institute for Comparative Survey Research’s World Values Study for respondent’s confidence and satisfaction with their outcomes in life. What economic consumption data may tell the details here for governments or private consumers?
- What macroeconomic indicators would you select from the resources introduced to you in this course to demonstrate the relative presence of a growing middle class within each candidate’s economy? What is your estimate of the size of the middle class for each?
- Adding the economic conditions of each candidate to your mind-set, place your candidates’ names in each viable internationalization strategy quadrant of the integration-responsiveness framework. Has your perspective changed from last module? It’s OK if your present research narrows or expands your viable strategy-type choices at this stage but does not isolate the single best strategy at this point. Please note the most compelling global and local economic-driven pressures justifying your recommendation in the rightmost column.
|Global Integration Pressure
|Economic and Development Factors pressuring global value chain integration:
Economic and Development Factors pressuring local responsiveness:
|Home Replication Strategy
|(Weak) Local Responsiveness Pressure (Strong)|
- Based on your economic research, which candidate market would best serve as a target consumer market, as a platform for manufacturing, and as a sourcing or distribution destination? Be sure to consider how economic concerns are impacting your industry’s need to “think globally and locally but act appropriately.”
- Consider your logic for using the IR framework in Questions 1 and 2 above. Knowing that “structure should follow strategy,” how centralized do you think corporate governance should be to successfully execute internationalization strategy? Are there circumstances you can think of in which firms in the industry are better off choosing to engage markets with a command economy versus a market-based one?
- Could economic health and freedom impact the type or allocation of organizational assets in either country? Which of the six alternative organizational structures currently seem to be the best matches between your industry’s needs and each candidate?
- Given what you know to date, would you favor an indirect (e.g., export/import), contractual (e.g., licensing), or direct (e.g., merger or greenfield) entry mode as your top recommendation for each of your candidates? How did each country’s economic environment impact the relative trade-offs between the entry-mode decision-making framework we have been using throughout the course?
Whether it’s on TV, posted to the internet, or printed in financial magazines, the catchphrase “the political economy” has been popularized by finance gurus and economic pundits; essentially, politics and economy have been linked as one environmental factor. But are they really the same thing? After studying so intensively in this course, are you able to tell someone what the greatest determinant of a nation’s economic health and development would be? Is it culture, political ideology, national industrial and competitiveness policies, institutional membership (think EU or WTO), location and geography, or maybe just the country’s comparative factor endowments? If you are not clear on this, how can our elected leaders confidently support any one of the possible economic systems available today?
Briefly reflect on your learning process in this module:
- What were the most challenging concepts for you this week?
- As your instructor reviews this submission, is there any topic area you would like additional feedback on?