Business Risk Analysis

Honda Motor Co. Ltd has always sought to provide genuine satisfaction to people around the world. We are striving to deliver the products and services that customers in each locality want most. To ensure that we meet local needs, we go beyond establishing local sales networks; we have structured our operations so that many of our products are not only manufactured, but also developed in the regions where they will be used. The result is over 124 manufacturing facilities in 28 countries outside of Japan, producing the motorcycles, automobiles, and power products that bring us into contact with over 17 million customers each year. This paper focuses on the business risk analysis for building, owning, and operating a manufacturing plant in Croatia. This plant will produce Hybrid vehicles and introduce the Hybrid technology to this region. Considerable research was conducted on the Republic of Croatia and the region and a SWOTT Analysis was prepared to determine the benefits and risks of conducting business in this country. Political, economic, and market risks have been researched and a detailed description of the risk and how to manage the risk is included.

SWOTT Analysis
SWOTT for Croatia ¡V Opening a Honda Hybrid plant in this country

Strength
„Ï Strategically located in the Adriatic Sea (distribution)
„Ï Open to FDI
„Ï Member of the WTO
„Ï Scheduled to become a member of the EU in 2010
„Ï Scheduled to become a member of NATO in first decade of 2000
„Ï Proactive mindset for protecting the environment
„Ï Competitive advantage in the production of steel and rubber
„Ï Aggressive tax incentives to corporations (Honda)
„Ï Low tax rate
„Ï English well spoken in Croatia

Weaknesses
„Ï High unemployment rate may affect car sales
„Ï Managing a multicultural population comprised of enemies ethnic groups
„Ï Judiciary system challenges ¡V ineffective court system
„Ï Potential political instability due to new government party HDZ, which depends on

References: Croatia: Country Risk Summary (November 2005). Retrieved January 27, 2006 from ProQuest research database. Country Monitor (January, 2004). Croatia: Risk Ratings 12(2). Retrieved January 27, 2006 from ProQuest research database. Croatia Strategy Overview. Retrieved January 27, 2006 from http://www.ebrd.org/about/strategy/country/croatia/index.htm. Foreign Relations of Croatia (October 2005) Retrieved January 29, 2006 from http://en.wikipedia.org/wiki/Foreign_relations_of_Croatia Human Rights Watch (November 2005). Broken Promises: Impediments to Refugee Returns. Retrieved January 27, 2006 from http://www.hrw.org/repors/2005/croatia. Operational risk: Croatia: Risk ratings (Oct 7, 2002) Country Monitor. New York. Vol. 10, Iss. 39; pg. 11, 1 pgs ¡V Retrieved on 01/28/2006 from: http://proquest.umi.com/pqdweb?did=207704631&sid=2&Fmt=4&clientId=2606&RQT =309&VName=PQD Politics of Croatia (October 2005) Retrieved January 29, 2006 from http://en.wikipedia.org/wiki/Politics_of_Croatia U. S. Commercial Service (October, 2005). Doing Business in Croatia. Retrieved January 27, 2006 from http://www.buyusa.gov/croatia/en/27.html. U.S. Depart of State (2005). Investment Climate in Croatia. Retrieved January 27, 2006 from http://www.state.gov/e/eb/ifd/2005/42004.htm