Running head: GLOBALIZATION 1
GLOBALIZATION 9
Canada- developed country
Canada is one of the countries that are characterized by gorgeous forestry, oil sources, and multiculturalism. In order to fully analyze this country, it is important to look into its strengths and threats so as to provide crucial information for decision making. The threats are important in that, it will provide the basis for the risk management as well as preparedness for the future dynamics and thus reducing the degree of effect on the business.
Some of the strengths observed in Canada are the entrepreneurial support. The government of Canada supports the entrepreneurs through avenues such as reducing the tax burden for example tax breaks. In this manner, it raises the confidence of the Canadian entrepreneurs however small the business can be, they can easily label themselves (Rhodes, 2016).
Secondly, the niche market growth in the Canadian market is a plus for developers. Over time, the Canadian market has realized a positive growth through the ice wine. Therefore, it led to the development of the Canadian diamonds within the ice wine industry.
Canada is close to the Americans and thus the country has seen the benefits that come with the substantial trade surplus with the neighbors. Their proximity to America brings a great advantage even for investors. However, as much as the proximity to America has served as a benefit to the country, it also brings forth weaknesses such as dependency. For example, a large percentage of the Canadians exports are directed to America. For example, during the recession, the Canada market lost the market. Therefore, a breakdown in the American market causes issues with the Canadian market also.
Also, the Canadian dollar has not been stable for a long period of time now. The fluctuating dollar has caused a break down in the market and may be a threat to the investors. Therefore, any investors planning to enter the market have to have a proper planning on how to counter the cases of the fluctuating dollar. For example, thousands of people have lost jobs in the recent pasts as the value of the dollar continues to go south.
However, is it important to note that, as much as the Canadian market was depending highly on America for exports, there is a trend of highly growing markets. Some of the emerging markets include Asia. There has been an increase in demand by the Asian market and therefore widening the market for investors. In case of an entry into the market, the investors will take advantage of the increased market.
One of the threats that are facing the Canadian market is the fact that there is the continuous closure of stores. The store owners are closing down the stores because of the continuous decline in the economic growth. Some investors such as the Dollorama have threatened to raise the prices in the near future so as to maintain the building. This is a threat to the incoming investors since they will have to use a huge amount of capital to secure stores for the business.
The Canadian economy has also suffered due to the close connection between the dollar and the oil prices. The county is characterized by a huge supply of the oils. When the prices of the oil are high, it is observed that it causes an increased value n the dollar however, the country realized a drop in the prices of the oil and thus affecting the value of the dollar.
In conclusion, the country is developing small businesses as well as the oil industry and with close support by the government but the close relationship between the value of the dollar and the oil price is causing a breakdown I the economy. Therefore, investors should watch closely the effect of the dollar on the business venture.
South Africa- developing country
One of the major strength that is found in the South African economy is the fact that they experience a politically stable environment. The fact the country was able to transit peacefully to the democratic government is a great achievement (Meagher, 2016). The factors that led to the peaceful transition are still in place and therefore, there is no anticipation of instability in the future. Therefore, the country is politically safe for investors.
In the whole continent of Africa, the country was rated the second least corrupt. Additionally, the county was fairly rated in the 2006 corruption perception index by global watchdog transparency international. Therefore, investors will not face a hard time to enter the market due to the high levels of transparency in the processes involved.
The inflation rate in the country is well controlled according to the figures provided since 2004 which as 0.1. The country is also strategically located in that; movement of goods in and out of the country is not difficult. For example, the business ports form the largest and the most connected networks in Africa. The ports handle approximately 500 million tons of cargo per year (O'neil, 2015). Additionally, the ports work as transshipment hubs, whereby it connects Asia, Europe African, and America. Also, there has been a rapid growth of the airline and thus the country can be termed as well connected in terms of infrastructure. The county is also characterized by modern infrastructure such as the modern rails, outstanding, air, road, as well as other transportation services. The roads are well maintained and thus posing a great opportunity for the public-private venture.
The government of South Africa is highly committed to investment facilitation and thereby the willingness of investors. The government has also omitted the exchange controls on non-residents and therefore ensuring that the investors can withdraw their money from the economy wherever they are not satisfied.
Some of the risks to business development in South Africa are the low levels of technology that is still utilized to date. The country has not been able to explore the minerals underlying the land because of the inadequate technology. Investors who are technology dependent in this country may, therefore, face challenges.
Additionally, the country has registered high mortality rates in the recent years because of the HIV/AIDS epidemic. The taxation level is also so high in the country and therefore, the citizens have decided not to work so as to evade taxes. Venturing into this county, therefore, requires strategic planning of the prices to ensure that the business is able to make more profits even after paying the huge taxes. Other threats to the entry into the economy of South Africa is the electricity problem, whereby there is a problem with the distribution of electricity which will eventually affect the operations of the company. Due to the high crime rate, which is brought about by the high unemployment rate, the citizens and foreigners in the country face difficulties with personal safety. Finally, there is still a high rate of racism in South Africa.
China- emerging market
China is an emerging market country that is located in eastern Asia and is characterized by its high population. The country accounts for the 18.67% of the total population of the world. Therefore, the country becomes a strategic market for investors as well as lucrative businesses.
One of the major strengths of the country is the nature of the government structure. The Chinese government is developed in a way that it governs all the 1.4 billion people, and due to this, it is divided into four different bodies that are designated with powers. The decision making, therefore, is simpler and faster (Bekaert, 2017).
The country has also recorded an increasing gross domestic product. The GDP by 2017 was 6.8% which is the highest after 2010. The growth rate is higher than the government's target of 6.5. Therefore, investing in such a country is highly profitable. There has been a boom also in the telecommunication sector in the country. Most of the GSM network service has moved to the third generation network and thus marketing in this country is simple. The online marketing will be very useful to the company in terms of cost and effectiveness.
Due to the high population experienced in the country, there is readily available cheap labor and thus a plus for investors (Cascio, 2018). Some of the opportunities that the investors should take advantage of include the high urban migration. If the investors can invest in the rural regions due to the high rural-urban migration, then the goods are supplied to the urban regions which are highly populated, the growth rate would be positive.
Also, the investors should focus on the service sector. Both agriculture and manufacturing have failed in the past and therefore the setback in the economy of China. Therefore, the investors should concentrate more on the service industry. Taking into account the high population of the country, service industry will be a boom.
However, while developing in the country, investors should consider the effects of the East China Sea dispute. China, Japan, and South Korea have been on each other about the economic zones of east China. The disputes have created hassles of trade among all the three countries. The company should also investigate the effects of the negative perceptions of China (Zhang, 2017). The highly growing economies, as well as the high populations, have created a negative perception which might affect the operations and profitability.
References
Bekaert, G. &. (2017). Emerging equity markets in a globalizing world.
Cascio, W. (2018). Managing human resources. McGraw-Hill Education.
Meagher, K. (2016). The scramble for Africans: Demography, globalisation and Africa’s informal labour markets. The Journal of Development Studies, 52(4), 483-497.
O'neil, P. H. (2015). Essentials of Comparative Politics: Fifth International Student Edition. WW Norton & Company.
Rhodes, M. (2016). The future of European welfare: a new social contract? Springer.
Velthuis, O. &. (2015). Cosmopolitan canvases: the globalization of markets for contemporary art. . Oxford University Press, USA.
Zhang, K. H. (2017). China and the challenge of economic globalization: The impact of WTO membership. Routledge.