GLOBAL BUSINESS

MANAGEMENT

ASSIGNMENT

SUBMITTED TO:
Ms. Snigdha Malhotra

SUBMITTED BY:
NIPUN CHAWLA

AMITY INTERNATIONAL BUSINESS SCHOOL

 Countries major export and import data

INDIA

Of the $10.1 billion in American exports to India, the following product

categories had the highest values.

Civilian aircraft … US$1.4 billion (14.1% of India from U.S. imports,

up 169.6% from 2005)
Diamonds … $621.2 million (6.2%, up 33%)
Chemical fertilizers … $608 million (6.0%, up 25.5%)
Telecommunications equipment … $486 million (4.8%, up 4.9%)
Organic chemicals … $410.4 million (4.1%, up 10.5%)
Other petroleum products … $336.8 million (3.3%, up 55.7%)
Computer accessories … $311 million (3.1%, up 19%)
Jewellery … $285.5 million (2.8%, up 31.5%)
Medicinal equipment … $259.4 million (2.6%, up 17.3%)
Industrial machines … $251.1 million (2.5%, up 21.5%)
Fastest-Growing Indian Imports from U.S.

Below are American exports to India in 2006 with the highest

percentage sales increases from 2005.
Military vehicles … US$11.6 million (up 232,000% from 2005)
Military clothing & footwear … $30.1 million (up 68,000%)
Collectibles (e.g. artwork, antiques, stamps) … $43.2 million (up
513.5%)
Engines for military aircraft … $13.1 million (up 281.9%)
Civilian aircraft … $1.4 billion (up 169.6%).
RUSSIA'S IMPORTS FROM U.S.
Of the $10.1 billion in American exports to Russia, the following product
categories had the highest values.

Meat incl. poultry … US$636.7 million (13.5% of Russia from U.S. imports, down
15% from 2005)

Passenger cars … $399.3 million (8.5%, up 25.1%)

Civilian aircraft … $384.3 million (8.1%, up 222.6%)

Oil field drilling equipment … $319.6 million (6.8%, up 2.3%)

Excavating machinery … $170.7 million (3.6%, down 5.1%)

Computer accessories … $155.1 million (3.3%, up 9.9%)

Agricultural machinery … $148.1 million (3.1%, up 1.8%)

Service industry machinery … $125.2 million (2.7%, up 48.8%)

Trucks, buses & special purpose vehicles … $117 million (2.5%, up 48%)

Materials handling equipment … $98.6 million (2.1%, up 96.5%)

Fastest-Growing Russian Imports from U.S.

Below are American exports to Russia in 2006 with the highest percentage sales
increases from 2005.

Iron & steel products … US$2.9 million (up 482% from 2005)
Railway transportation equipment … $18.7 million (up 598%)

Engines & parts … $70.1 million (up 322%)

Coal … $3.8 million (up 1227%)

Civilian aircraft … $384.3 million (up 223%)

Synthetic rubber … $3 million (up 217%)

UAE

Of American exports to The UAE, the following product categories had

the highest values.

1. Civilian aircraft … US$2.9 billion (24.8% of UAE imports from

America, down 32.1% from 2006)
2. New and used passenger cars … 1.4 billion (11.6%, up 59.4%)
3. Drilling and oilfield equipment … $569 million (5.5%, up 21.4%)
4. Non-monetary gold … $431.5 million (3.7%, up 114.5%)
5. Telecommunications equipment … $431.2 million (3.7%, up
156.2%)
6. Other industrial machines … $351.6 million (3%, up 60.2%)
7. Industrial engines … $262 million (2.3%, up 37.8%)
8. Parts for military-type goods … $241.3 million (2.1%, up 97.3%)
9. Gem diamonds … $227.3 million (2%, down 1.6%)
10. Excavating machinery … $211.9 million (1.8%, up 68.6%).
 BRAZIL
Of the $19.2 billion in American exports to Brazil, the following product
categories had the highest values.
Computer accessories, peripherals and parts … US$1.7 billion (8.9% of
Brazil from U.S. imports, up 29.5% from 2005)
Civilian aircraft parts … $1.19 billion (6.2%, up 39.7%)
Civilian aircraft engines … $1.18 billion (6.2%, up 1.9%)
Organic chemicals …. $1.14 billion (5.9%, up 17.2%)
Fully built civilian aircraft … $1.06 billion (5.5%, up 716%)
Oil field drilling equipment … $894.5 million (4.7%, up 146.8%)
Plastics … $757.7 million (3.9%, up 19.1%)
Semi-conductors … $693.6 million (3.6%, up 0.1%)
Chemical fertilizers … $571.3 million (3.0%, up 4.5%)
Pharmaceutical preparations … $566.2 million (2.9%, up 20.5%)
Fastest-Growing Brazilian Imports from U.S.

Below are American exports to Brazil with the highest percentage sales
increases.

Fully built civilian aircraft … $1.06 billion (5.5%, up 716% from 2005)
Raw cotton … $67.0 million (up 277%)
Bodies & chassis for passenger cars … $4.1 million (up 264%)
Oil field drilling equipment … $894.5 million (up 147%)
Fuel oil … $119.2 million (up 131%)
Copper … $9.2 million (up 101%).
 CHINA

Of the $55.2 billion in American exports to China in 2006, the following

product categories had the highest values.

Read on

China's Imports & Exports Slow in 2008

US Trade with China in 2007

Cuban Trade Deficit Improves

Semi-conductors … US$5.9 billion (10.6% of China from U.S. imports, up

74.7% from 2005)

Civilian aircraft … $5.3 billion (9.6%, up 39.7%)

Soybeans … $2.5 billion (4.6%, up 12.5%)

Plastics …. $2.2 billion (3.9%, up 18.8%)

Raw cotton … $2.1 billion (3.7%, up 47%)

Industrial machines … $1.97 billion (3.6%, up 29%)

Copper … $1.86 billion (3.4%, up 99.7%)

Computer accessories … $1.82 billion (3.3%, up 27.5%)

Aluminum … $1.7 billion (3.1%, up 90.3%)

Steelmaking material … $1.69 billion (3.1%, up 11.9%)

Fastest-Growing Chinese Imports from U.S.

Below are American exports to China in 2006 with the highest
percentage sales increases from 2005.

Unmanufactured tobacco … US$61.4 million (up 3127% from 2005)

Corn … $22.6 million (up 2963%)

Oilseeds & food oils … $60.7 million (up 970%)

Precious metals … $305 million (up 205.2%)

Railway transportation equipment … $220 million (up 146%)

Entry should relate to organizations corporate strategy and extent,
depth, and geographical coverage of its present and intended foreign
operations.

a) How quickly the firm wishes to commence operations in the

market.
b) Volatility of competition in countries.
c) The firm experience and expertise in selling and operating abroad.
d) Sizes of the margins taken by intermediaries in particular nations.
e) Tariffs levels, quotas, and other non tariff barrier to market entry.
f) The business financial resources and hence its capacity to
purchase.
g) Political stability of foreign countries the firm wishes to enter.
h) Ease of communication with intermediaries in specific countries.
i) The degree of market penetration desired.
 Uae
The UAE has an open economy with one of the highest per capita
incomes in the world and a sizable annual trade surplus.

In 2009, its GDP, as measured by purchasing power parity, stood at

US$400.4 billion.

UAE's economy, particularly that of Dubai, was badly hit by the financial
crisis of 2007–2010. In 2009, the country's economy shrank by 4.00
percent, but UAE's overseas investments are expected to support its
full economic recovery.

Petroleum and natural gas exports play an important role in the

economy, especially in Abu Dhabi. More than 85% of the UAE's
economy was based on the exports of natural resources in 2009.

A massive construction boom, an expanding manufacturing base, and a

thriving services sector are helping the UAE diversify its economy.
Nationwide, there is currently $350 billion worth of active construction
projects.

Aluminum, steel, iron and other forms of metal exports along with
textile produce much a significant amount of income and are expected
to surpass the income brought in by petroleum and natural gas exports
within the next 40 to 60 years.

Government projects include the Burj Khalifa, which is the world's

tallest building, Dubai World Central International Airport which, when
completed, will be the most expensive airport ever built, and the three
Palm Islands, the largest artificial islands in the world.
Other projects include the Dubai Mall which is the world's largest
shopping mall, and a man-made archipelago called The World which
seeks to increase Dubai's rapidly growing tourism industry.

Also in the entertainment sector is the construction of Dubailand,

which is expected to be twice the size of Disney World, and of Dubai
Sports City which will not only provide homes for local sports teams but
may be part of future Olympic bids.

Major increases in imports occurred in manufactured goods,

machinery, and transportation equipment, which together accounted
for 80% of total imports. Another important foreign exchange earner,
the Abu Dhabi Investment Authority - which controls the investments
of Abu Dhabi, the wealthiest emirate - manages an estimated $360
billion in overseas investments & an estimated $900 billion in assets.

More than 200 factories operate at the Jebel Ali complex in Dubai,
which includes a deep-water port and a free trade zone for
manufacturing and distribution in which all goods for re-export or
transshipment enjoy a 100% duty exemption. A major power plant with
associated water desalination units, an aluminium smelter, and a steel
fabrication unit are prominent facilities in the complex. The complex is
currently undergoing expansion, with sections of land set aside for
different sectors of industry. A large international passenger and cargo
airport, Dubai World Central International Airport, with associated
logistics, manufacturing and hospitality industries, is also planned here.
Russia
Franchising in Russia
The spending patterns of consumers in Russia are rapidly starting to
resemble those of other European cities, and thus are creating demand
for recognized brands and high quality services. In order to meet the
expectations of their clients and gain a competitive advantage, more
and more Russian private enterprises and entrepreneurs are seeking
partnerships with well-recognized Western companies, including
franchisors.

During its 12-year history in Russia, the franchising sector has

developed mainly in customer oriented segments, such as fast food and
restaurants, education and training, fitness and health care, recreation
and entertainment, travel and lodging, automotive and retail.
Franchising in business-oriented services is also gaining momentum.
Good examples of the B2B segments where franchise models work
successfully are cleaning services and maintenance, transportation,
logistics, express mail services, management training, and consulting.

Import Market for Franchise Concepts

Franchising as a business model first came to Russia in the early 1990s,
when it was introduced by foreign franchisors. Among the franchise
pioneers were such well-known American brands as Pizza Hut, KFC,
Subway, and Alphagraphics. The second wave of market entries came
at the beginning of the new millennium, when economic reforms
initiated by a new government led to gradual improvement of the
business environment and Russia joined the list of the world's fast-
growing economies. According to data from Newbridge Group, out of
165 franchise concepts currently present in the market, 68 percent
were established domestically, 20 percent were brought to Russia by
European franchisors, and 12 percent are American franchise concepts.
The most visible U.S. franchise concepts present in the market today
include: AlphaGraphics, Baskin Robbins, Broaster Company, Carl's Jr.,
Crestcom, Chem-Dry, Chips-Away, Days Inn, FasTracKids, Gold's Gym,
Jani-King, KFC, LMI, Mail Boxes Etc., Office 1 Superstore, Papa John's,
Pizza Hut, Sbarro, and Subway. Among these should also be included
Broadway Pizza, Chicago Design, Kroshka-Kartoshka, New York Pizza,
Pasta Lavista, and Star Galaxy, which are all franchise concepts
established and developed in Russia by (or with participation of capital
of) U.S. companies or entrepreneurs.
McDonald's, which now has 137 restaurants in 17 Russian cities and is
one of the most recognized brand names in Russia, was among the first
to enter the market in the early 1990s. The brand successfully grew to
become the country's largest network of non-domestic, fast-food
restaurants. However, Despite the direct association of its brand name
with franchising, McDonald's has been growing in Russia so far only by
opening corporate-owned restaurants and has not sold a single
franchise license.
Market Entry
The majority of U.S. franchisors that enter the Russian market prefer to
establish master franchise partnerships with partners based in two
main cities - Moscow or St. Petersburg. However, markets in Moscow
and St. Petersburg no longer represent an easy opportunity for quick
entry due to high costs and increased competition. There are a number
of challenges that U.S. franchisors should be aware of, such as access to
good locations, increasing competition from local and international
service providers, necessity of aggressive promotional campaign, and
significant expenditures on marketing. Another important factor that
may affect new market entries into the Moscow market is the
possibility of conflicts of interest with the Moscow Government. The
Moscow City Government and other senior officials from local
administrations may be directly or indirectly involved in commercial
projects in consumer-oriented sectors.
The regional cities that are commonly ignored by foreign franchisors
may represent significant business opportunities. Several regional cities
have populations exceeding one million people. These metro areas
have educated workforces, entrepreneurs with excellent experience,
good relationships with local administrations, and access to fine
locations. The demand for well-known brands and high-quality services
in the regions is very strong.
U.S. franchisors may utilize a number of instruments in their efforts to
establish their presence in the Russian market. The U.S Commercial
Service offices in Moscow, St. Petersburg and Vladivostok can assist
U.S. franchisors with successful market entry by providing professional
market research and customized contact facilitation services. In
addition, the U.S. Commercial Service in Russia organizes U.S. franchise
outreach programs to different parts of Russia and helps U.S.
franchisors and U.S. franchise holders in Russia establish direct contacts
with local authorities and business associations, as well as to meet with
qualified potential partners. In addition, BISNIS representatives in
Russia's regions (Samara, Nizhny Novgorod, Novosibirsk, Tomsk,
Khabarovsk, and Sakhalin Island) can provide information and support
to U.S. companies interested in exploring these areas.
The annual BuyBrand International Franchise Exhibition, which is held
in Moscow in the fall, is an excellent way to make contacts and become
acquainted with the market. An inexpensive way to participate in the
show is to join the U.S. Commercial Service (CS) Moscow exhibition
booth where Commercial Specialists showcase catalogues of U.S.
franchisors, collect contact information from the visitors who express
interest in specific U.S. franchise concepts, and forward the contact lists
to the U.S. participants.
U.S. franchisors planning to exhibit at the International Franchise Show
2006, which will be held in Washington, D.C., on June 2-4, 2006, may
want to inform the CS Moscow about their interest in Russia. CS
Moscow plans to accompany an official Russian delegation to IFE 2006
and will facilitate business meetings and help with follow up.
U.S. franchisors may also work with professional business consulting
companies and brokers who help U.S. companies find business partners
and successfully enter the Russian market.

Brazil
Brazil is the fifth largest country in the world with a total area of 8.5
million square kilometers, covering approximately half of South
America. Distances are continental: 4,420 kilometers from north to
south, 4,328 kilometers from east to west, an Atlantic coastline of 7,367
kilometers and a total border of 23,102 kilometers. It neighbors every
country in South America except Chile and Ecuador.

The country is divided into five regions:

• North - comprised mostly of the Amazon Basin; also consists of the

states of Acre, Amazonas, Roraima, Rondônia, Pará, Amapá and
Tocantins.
• Northeast – comprised of the states of Maranhão, Piauí, Ceará, Rio
Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe and Bahia.

• Central West – comprised of the states of Mato Grosso, Mato Grosso

do Sul, Goiás and the Federal District.

• Southeast – comprised of the states of Minas Gerais, Espírito

Santo, Rio de Janeiro and São Paulo.

• South – comprised of the states of Paraná, Santa Catarina and Rio

Grande do Sul. More than half of Brazil is 200 meters or more above
sea level but only a small part rises above 1,000 meters, with the
highest peaks reaching an altitude of around 3,000 meters. Brazil’s river
system is extensive. The Amazon and its tributaries, which are great
rivers in themselves, drain over half of Brazil. Other large rivers include
the São Francisco in the northeast and the Paraná and the Paraguay
Rivers, which flow south to empty into the Rio de La Plata. The
considerable hydroelectric potential of Brazil’s rivers has been
increasingly exploited over the last 35 years. Forests still cover vast
expanses and farmland is found mainly in the South, Southeast and
Central West with large areas suitable or adaptable for pasture. Brazil
has some of the largest iron ore deposits in the world and mines
significant quantities of many other metals, minerals and precious
stones.

Market attractiveness
Brazil’s gross domestic product (GDP) declined by just 0.3% during the
global economic crisis in 2009, and it is expected to rise by 5.8% in
2010. Its balance of payments deficit is less than 2% of GDP and its
budget deficit, which stands at less than 4% of GDP, is very relatively
low. Inflation also stands at a moderate level of 4.6% per annum, and
short-term interest rates at 8.5%
per annum are high enough to continue to keep inflation under
controlThe Brazil commercial arena is changing rapidly due the
country’s increasingly competitive markets, as well as government
initiatives. However, a number of potential target companies may lack
reliable financial, tax, commercial and operational information as well
as historical and forecast management reports, competitive
intelligence, operational and market data may be untimely,
inconsistent, inaccurate or simply nonexistent.

Market selection and determination

In considering the first steps into a new market, organizations have
many issues to consider. Our team helps you identify which steps are
the most critical, where the most significant risks could be and how to
implement a plan both to take advantage of market opportunities while
mitigating risks:
1. Identify the market - which markets, which segments, how to
manage and implement marketing efforts,
how to enter – through intermediaries, or directly, using what
information?

2. Develop sourcing opportunities - whether to obtain products, make

them or buy them?

3. Decide on the form of investment and control – joint venture, local

partner, acquisition?

4. Determining how to operate in Brazil from a tax perspective – what

are the most efficient structures, the key
potential taxes, risks, opportunities involved, existing benefits and
incentives?
5. Building or validating a business plan – how the business is likely to
perform in the upcoming years? How the key
commercial and operational drivers, external and internal factors will
impact the business?

6. Evaluating where to establish the business (location assessment, site

identification) - What locations (regions, cities)
are more attractive? Within the selected locations, what are the sites
(properties, land, buildings) that best fit the
business needs?

India
Greenfield
India: the second fastest growing market in Asia The Indian market with
its one billion plus population, presents lucrative and diverse
opportunities for U.S. exporters with the right products, services, and
commitment. India’s requirements for equipments and services for
major sectors such as energy, environmental, healthcare, high-tech,
infrastructure, transportation, and defense will exceed tens of billions
of dollars in the mid-term as the Indian economy further globalizes and
expands. India’s GDP, growing at 6.7% (for 2008-09), makes it one of
the fastest growing economies in the world and the second fastest in
Asia. India has potential for a sustained growth of 8-10% for the next
couple of years. Now is the time for U.S. companies to enter the rising
Indian market.

Indian Heritage - Concepts & Values to Know In a diverse and complex

country like India, it’s difficult to impart generic conclusions that could
be used by those wanting to do business here. Regionalism, religion,
language and caste are all factors that need to be taken into account
when doing business in India. Behavior, etiquette and approach are all
modified depending on whom you are addressing and the context in
which they are being addressed.

Unlike western societies, in India religion, fatalism and collectivism are

all components of daily life and they need to be respected for a healthy
and successful business relationships. Despite the traditional caste
system being dismantled, remnants may still be witnessed in the Indian
hierarchical structure of business practices and decision-making. There
is a strong sense of tradition tied into daily business practices. Yet, signs
of change are becoming more evident. Ever since the economic reforms
began in 1991, India’s market is growing rapidly. With its geographical
positioning in the Indian Ocean, a major international trade route, and
with its rich mineral and agricultural resources, India’s economy is
witnessing increased inflows of foreign investments. India is also
recognized for its competitive education system and vast pool of highly
skilled laborers, making it an attractive market for foreign businesses.

No matter what the industry is, foreign businesses should expect some
degree of differences in business norms in India. Included below are
some basic business etiquettes that the U.S. companies should follow
when developing and maintaining relationship with Indian businesses.
Business Etiquette •Do use titles to address your Indian counterparts,
such as “Professor” or “Doctor”. If he/she does not have a title, use
“Mr”, “Mrs”, or “Miss”.

•Do wait for a female business colleague to initiate a greeting whether

it is verbal or physical. Indian men do not generally shake hands with
women out of respect.

•Do remain polite and honest at all times in order to prove that your
objectives are sincere.

•Don't be aggressive in your business negotiations – it can be

interpreted as a sign of disrespect.

•Don't take large or expensive gifts as this may cause embarrassment.

If you do take a gift make sure you present the gift with both hands.

•Don't refuse any food or drink offered to you during business

meetings as this may cause offence (sample small portions atleast). In
addition, it is useful to keep in mind that traditionally, and religiously,
majority of Indians are vegetarians and do not drink alcohol or smoke.

Market Entry Key factors to doing business successfully in India

include: finding good partners who have knowledge of the local market
and procedural issues; good planning; aggressive due diligence and
follow up; and patience and commitment.

The U.S. Commercial Service in India offers customized solutions to help

your business enter and succeed in the Indian market. Our India-wide
network of trade specialists will work one-on-one with you through
every step of the exporting process, helping you to:
•Target the best markets

•Promote your products and services to qualified buyers

•Meet the best distributors and agents for your products and services