Geely Automobile

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International Business Environment Analysis for Geely plc.

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International Business Environment II

Module title:

International Business Environment (P13KL9)

Module convener: Lei Li Title: Critical Analysis of International Business Environment in UK and Malaysia : A Project of Geely plc‘s Foreign Expansion

Group Name List GROUP NO.

ID NO. 6501184 6501425 6501559 6501825 6501972 6500420 6501843

NAME Chen Yiduo Wang Hao Yin Xiaoyun Wang Zheng Zhu Weixing Zhu Leizhen Wu Gaoying

Number of Words: 4201

Submission Time/Date: 14th May, 2010

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International Business Environment II

Covering Note:

Yiduo, Chen(6501184), Leader: ASEAN, Leverage the multinational institutions—ASEAN, UNNC

Gaoying, Wu (6501843):

WTO, UNNC

Hao, Wang (6501425):

EU, Leverage the multinational institutions—EU, UNNC

Leizhen, Zhu (6500420):

Income profile, Culture, Marketing analysis—Income profile, UNNC Introduction, Econography, Political risk, Assessment, Conclusion, UNNC

Weixin, Zhu (6501972):

Xiaoyun, Yin (6501559):

Legal System, Exchange rate, Geely‘s Reacts, Recommendations, UNNC

Zheng, Wang (6501825):

Tax regime, Restrictions, Marketing analysis—legal system, UNNC

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International Business Environment II

Table of contents Pages
1. Introduction ...........................................................................................................5 2. ECLIPTER facotrs analysis…………………………….……………………...5 2.1Econography 2.2 Culture 2.3 Legal system 2.4Income profile 2.5 Political risk 2.6 Tax Regime 2.7 Exchange rate 2.8 Restrictions Institutions………………………………………………………………….…..13 3.1 WTO 3.2 EU 3.3 ASEAN

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4. Assessment of Geely’s overall international expansion strategy……………...15 5. Marketing analysis……………………………………………………...……......16 5.1 Legal system 5.2 Income profile 6. Geely’s reacts to the impact of the ECLIPTER…………………………….......18 7. Leverage the multilateral institutions……………………………………..….....19 7.1 ASEAN 7.2 EU 8. Implications and Recommendations………………………..…………..……….20 9. Conclusion……………………………………………………………………........21 10. References………………………………………..…………………..…………..22 11. Appendix (Interview)……………………………………………………………28

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International Business Environment II

1. Introduction

Geely, the China-based auto company and one of the newly-emerged multinationals in the world auto market, exerts tremendous influences on the auto industry. This essay will conduct a critical analysis of the international business environment that the company faces. In the first part, the ECLIPTER factors including econography, culture, legal system, income profile, political risk, tax regime, exchange rate and restrictions, together with the multilateral institutions such as WTO, EU and ASEAN will be examined by using UK and Malaysia as examples. Then based on this analysis, it will provide an assessment of the company‘s overall international expansion strategy and process. In the second part, legal system and income profile, the two most important ECLIPTER factors on Geely‘ overseas operations, will be evaluated. Furthermore, the scheme which Geely used to deal with the impact of these two factors and leverage the multilateral institutions will be shown. Finally, this report will analyze whether the company‘s international adaptation of the business function is effective, and then give some recommendations and lessons.

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ECLIPTER Factors Analysis

2.1 Econography Econography refers to physical and human assets including distance from major markets, and natural resources of nations that affect industry performance. In the first, the close distance between parent company and foreign subsidiary can help the company to reduce the transport costs and overhead expenses; it also can improve the connection between them. If the parent company is in China, it is better to build a subsidiary in Asia such as Malaysia. Secondly, the natural resources used for making cars mainly...
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