MNC Enters China

 

Select one MNC that does not currently do business in China. Next, consider the steps that the company should consider in determining the feasibility of entering the Chinese market and establishing a market for its products or services there.

Use the Strayer University Library and the following links to conduct a country risk assessment (CRA) on China:

• Bureau of Economic Analysis (BEA).
• Corruption Perceptions Index 2013.
• Ease of Doing Business Rankings - Economy Rankings.
• International Monetary Fund - Homepage.
• Country Risk Classification.
• World Trade Organization- Home page - Global trade
• Compare Countries.

Focus on areas such as corruption, political stability, exchange rate stability, regulatory oversight, freedom of the press, and rule of law. Research other factors that you believe you should evaluate. Additionally, consider the importance of culture in evaluating risk.

Instructions

Write an 8-10 page paper in which you:

• Summarize the business that you selected and provide a two to three-paragraph justification as to why China would be a viable market for the selected business.
• Examine the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Explain the major overall changes that have occurred and speculate on the key economic variables that most likely have influenced the exchange rate movements. Provide a rationale for your response.
• Analyze the major challenges in international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Based on what you have gleaned from your analysis, predict the major changes that you believe will occur in the next 24 months. Justify your response.
• Recommend key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Suggest one method that the MNC in question could use with derivatives in order to mitigate or eliminate such risks. Provide a rationale for your response.
• Recommend one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Justify your response.
• Conduct a country risk assessment to ascertain whether management should support the proposal for your chosen MNC to enter the Chinese market. Based on Geert Hofstede's six dimensions of culture, predict three likely problems posed by the cultural differences between the chosen MNC's culture and the Chinese culture. Provide a rationale for your response.
• Use at least six quality references, with at least two from peer-reviewed journal articles.

This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the Library site for all support. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment is:

• Determine whether an MNC should enter into a foreign market, including: whether the market is viable, exchange rate favorability, challenges related to international arbitrage and interest rate parity, ways to mitigate exposure to international economic conditions, an appropriate hedging technique, a country risk assessment and likely problems posed by cultural differences.

Week 8 Assignment - MNC Enters ChinaCriteriaRatingsPointsSummarize the selected business and provide two to three paragraphs justifying why China would be a viable market for the selected business. (5%)ExemplaryThoroughly summarized the selected business and provided a two to three paragraph justification as to why China would be a viable market for the selected business. 7.5 to >6.74 ptsCompetentSatisfactorily summarized the selected business and satisfactorily provided a two to three paragraph justification as to why China would be a viable market for the selected business. 6.74 to >5.99 ptsNeeds ImprovementPartially summarized the selected business and partially provided a two to three paragraph justification as to why China would be a viable market for the selected business. 5.99 to >5.24 ptsUnacceptableDid not submit summarized selected business. Did not submit a two to three paragraph justification as to why China would be a viable market for the selected business. 5.24 to >0 pts/7.5 ptsExamine the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Explain the major overall changes that have occurred, and speculate on the key economic variables that most likely have influenced the exchange rate movements. Provide a rationale for your response. (15%)ExemplaryThoroughly examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Thoroughly explained the major overall changes that have occurred, and thoroughly speculated on the key economic variables that most likely have influenced the exchange rate movements. Thoroughly provided a rationale for the response. 22.5 to >20.24 ptsCompetentSatisfactorily examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Satisfactorily explained the major overall changes that have occurred, and satisfactorily speculated on the key economic variables that most likely have influenced the exchange rate movements. Satisfactorily provided a rationale for the response. 20.24 to >17.99 ptsNeeds ImprovementPartially examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Partially explained the major overall changes that have occurred, and partially speculated on the key economic variables that most likely have influenced the exchange rate movements. Partially provided a rationale for the response. 17.99 to >15.74 ptsUnacceptableDid not submit an examination of the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Did not submit explanation of the major overall changes that have occurred, and did not submit speculation on the key economic variables that most likely have influenced the exchange rate movements. Did not submit a rationale for the response. 15.74 to >0 pts/22.5 ptsAnalyze the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Predict the major changes that will occur in the next 24 months with justification. (15%)ExemplaryThoroughly analyzed the major challenges faced with International Arbitrage and Interest Rate Parity associated with transaction and translation exposure within the Chinese market. Thoroughly predict the major changes that will occur in the next 24 months with justification. 22.5 to >20.24 ptsCompetentSatisfactorily analyzed the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Satisfactorily predicted the major changes that will occur in the next 24 months with justification.. 20.24 to >17.99 ptsNeeds ImprovementPartially submitted or incompletely analyzed the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Partially predicted the major changes that will occur in the next 24 months with justification. 17.99 to >15.74 ptsUnacceptableDid not submit analysis of the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Did not submit prediction of the major changes that will occur in the next 24 months with justification. 15.74 to >0 pts/22.5 ptsRecommend key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Suggest one method that the MNC in question could use with derivatives in order to mitigate or eliminate such risks with rationale. (15%)ExemplaryThoroughly recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Thoroughly suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Thoroughly provided a rationale for the response. 22.5 to >20.24 ptsCompetentSatisfactorily recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Satisfactorily suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Satisfactorily provided a rationale for the response. 20.24 to >17.99 ptsNeeds ImprovementPartially recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Partially suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Partially provided a rationale for the response. 17.99 to >15.74 ptsUnacceptableDid not submit recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Did not submit one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Did not submit a rationale for the response. 15.74 to >0 pts/22.5 ptsRecommend one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Justify the response. (10%)ExemplaryThoroughly recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market.  Thoroughly justified the response. 15 to >13.49 ptsCompetentSatisfactorily recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Satisfactorily justified the response. 13.49 to >11.99 ptsNeeds ImprovementPartially recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Partially justified the response. 11.99 to >10.49 ptsUnacceptableDid not submit recommendation of one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Did not submit or incompletely justified the response. 10.49 to >0 pts/15 ptsConduct a country risk assessment to ascertain whether management should support the proposal for your chosen MNC to enter into the Chinese market. Based on Geert Hofstede’s six dimensions of culture, predict three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture. Provide a rationale for the response. (15%)ExemplaryThoroughly conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Thoroughly predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six  dimensions of culture. Thoroughly provided a rationale for the response. 22.5 to >20.24 ptsCompetentSatisfactorily conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Satisfactorily predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six  dimensions of culture. Satisfactorily provided a rationale for the response. 20.24 to >17.99 ptsNeeds ImprovementPartially conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Partially predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six dimensions of culture. Partially provided a rationale for the response. 17.99 to >15.74 ptsUnacceptableDid not submit a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Did not submit  prediction of three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six dimensions of culture. Did not submit a rationale for the response. 15.74 to >0 pts/22.5 ptsUse at least six academic references. (5%)ExemplaryExceeds number of required references; all references are high-quality choices. 7.5 to >6.74 ptsCompetentMeets number of required references; all references are high-quality choices. 6.74 to >5.99 ptsNeeds ImprovementDoes not meet the required number of references; some or all references are poor-quality choices. 5.99 to >5.24 ptsUnacceptableNo references provided. 5.24 to >0 pts/7.5 ptsWriting mechanics, grammar, and formatting. (5%)ExemplaryError-free or almost error-free grammar, spelling, punctuation, and formatting. 7.5 to >6.74 ptsCompetentMostly free of errors in grammar, spelling, punctuation, and formatting. 6.74 to >5.99 ptsNeeds ImprovementPartially free of errors in grammar, spelling, punctuation, and formatting. 5.99 to >5.24 ptsUnacceptableSerious and persistent errors in grammar, spelling, punctuation, and formatting. 5.24 to >0 pts/7.5 ptsAppropriate use of SWS in-text citations and reference section. (5%)ExemplaryIn-text citations and references are error-free or almost error-free and are consistently formatted correctly in SWS style. 7.5 to >6.74 ptsCompetentMost in-text citations and references are provided, and they are generally formatted correctly in SWS style. 6.74 to >5.99 ptsNeeds ImprovementIn-text citations and references are provided, but they are only partially formatted correctly in SWS style. 5.99 to >5.24 ptsUnacceptableLack of in-text citations, or  lack of a reference section, or lack of both. 5.24 to >0 pts/7.5 ptsInformation literacy and integration of sources. (5%)ExemplarySources are consistently integrated using effective techniques of quoting, paraphrasing, and summarizing. 7.5 to >6.74 ptsCompetentSources are mostly integrated using effective techniques of quoting, paraphrasing, and summarizing. 6.74 to >5.99 ptsNeeds ImprovementSources are partially integrated using effective techniques of quoting, paraphrasing, and summarizing. 5.99 to >5.24 ptsUnacceptableSerious errors in the integration of sources, such as intentional or accidental plagiarism, or failure to use in-text citations. 5.24 to >0 pts/7.5 ptsClarity and coherence of writing. (5%)ExemplaryInformation is provided in a clear, coherent, and consistent manner with reasons and evidence that logically support ideas. 7.5 to >6.74 ptsCompetentInformation is mostly clear and generally supported with reasons and evidence that logically support ideas. 6.74 to >5.99 ptsNeeds ImprovementInformation is partially clear with minimal reasons and evidence that logically support ideas. 5.99 to >5.24 ptsUnacceptableInformation is confusing to the reader and fails to include reasons and evidence that logically support ideas. 5.24 to >0 pts/7.5 pts