Country Entry Risk Assessment
Bus 401: International Business
Dr. Frank Bucaria
May 03, 2013
The information provided in this paper will help us prepare an analysis of the risk issues that might be found in introducing the product into the specific country, utilizing the theories and concepts in the course material. We will be successful in achieving this by discussing the method of product entry. For this Paper I have chosen Finland as the country and the bicycle as the product to enter. I will also be discussing direct export, licensing as well as franchise opportunities. I will also be looking into the culture of the people as well as the demand for the product and companies selling competitive products. I will also break down labor and staffing issues as well. The goal will be to see if this business has the opportunity to be successful in the country of Finland.
The rational for introducing this particular product to the citizens of Finland is the country’s long standing love affair with the bicycle. The population of Finland is 5.4 Million people and 60.4% of those people ride bicycles. This ranks Finland at number 7 among the top 10 countries with the highest amount of bicycles per capita. “In Finland 9% of all trips are made by bike. The average distance cycled per inhabitant per day is 0.7 km. Fins ride bicycles without reference to the age or social status, both children and grown-ups: tourists and housewives, pensioners and students. Although the cycling season in this country traditionally starts in spring or summer, some fans of bikes are not afraid of neither the rain, nor slush, nor event winter snowstorms. The love of Fins cyclists to the bicycles can be compared with their love to dogs, or to fishing, or to sauna” ("Top 10 countries," 2011).
The culture dictates a laid back life style and according to many publications is referred to as one of the freest nations in the world in terms of civil liberties. Finland also enjoys freedom of the presses as well as high levels of political rights. “Finland is rated the sixth most peaceful country in the world by the Economist Intelligence Unit, and since 1945, Finland has been at peace, adopting neutrality in wartime” ("Finnish culture," ). In 2007 Readers Digest declared Finland as the best country to live in because of the freedoms as well as education, income, quality of drinking water and greenhouse gas emissions. This culture would benefit us in terms of selling products as well as research and development because of the amount of highly educated people.
Because of the highly educated workforce there would be a higher cost to manufacture products if manufacturing needed to be moved. For instance if sales were to take off and production and manufacturing were to be needed in country the cost to do so would be higher. Whereas hourly compensation in a manufacturing capacity is only $6 in the Philippines the cost to produce the bicycles in Finland would be $124 hourly. This information all falls in line with a business model that would have us manufacturing the bicycles elsewhere and having the imported to Finland to sell. Unions also make up a large percentage of the workforce in Finland. Roughly 1 out of every 5 workers belongs to the Central Organization of Finnish Trade Unions of 1 million people. This particular is another reason why it cost more to manufacture products in the country. If a business can afford to manufacture this way then they would benefit from highly skilled workers and very high quality products.
There have been a few success stories in terms of manufacturing and the innovation of products. One company that has done very well is Nokia. Nokia completed all the production and innovation in Finland before 1984. This company is very familiar to me because of the fact that they produce among other things cellular phones....
References: Bicycles in finland. (2010). Retrieved from http://www.finland-holidays.com/168/transport-in-finland/bicycles-in-finland.html
Delaney, L. (n.d.). How to prepare your product for import/export. Retrieved from http://importexport.about.com/od/MarketResearch/a/How-To-Prepare-Your-Product-For-Import-Export.htm
Finland 2012: Bicycle sales equal 2011 levels. (2013, March 20). Retrieved from http://www.bike-eu.com/Sales-Trends/Market-Report/2013/3/Finland-2012-Bicycle-Sales-Equal-2011-Levels-1180134W/
Finland risk assessment. (2012, September). Retrieved from http://globaledge.msu.edu/countries/finland/risk
Finnish culture. (n.d.). Retrieved from http://www.afrha.com/Finnish-Culture.aspx
International labor comparisons font size: print: ilc share on. (2012, December 12). Retrieved from http://www.bls.gov/fls/country/finland.htm
The nokia story. (n.d.). Retrieved from http://www.nokia.com/global/about-nokia/about-us/the-nokia-story/
Top 10 countries with most bicycles per capita. (2011, March 14). Retrieved from http://top10hell.com/top-10-countries-with-most-bicycles-per-capita/
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