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Copy of intro

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on 26 May 2013

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BUSINESS ENVIRONMENT IN ASIA Introduction andrew@nus.edu.sg
+65-9237-0657) Professor (NUS) Andrew Delios
May 2013
Singapore Owner/Director Family Business Environment in Asia … a course focused on understanding Asia Pacific Economies… Steps to bringing your idea to market? <From Idea to Market> Steps Analyze your idea. Document your idea. Identify and Research your Strategic Target Market. Bringing a idea to market can be a very frustrating process. It is one that does not happen by accident or by chance. A successful entrepreneur follows a strategic plan that enables them to make their idea a reality. How well does your idea work in practice? Will it replace what people already use or provide a different option? How is it going to be made? How is it going to be delivered? Take down detailed records of key concepts, drawings, photos, test results, and anything else having to do with the development of your idea. If you already pursuing a patent or intent on getting one, this is critical. Who are your customers?
Where are they?
What quantity and quality do they want?
When is the best time to launch? For Example Decide on your track. What is your development timeline? Who gets your product first? Test markets and soft launch? How will you measure results? How about researching What we do in Bus Environment in Asia? Former Head,
Department of Strategy & Policy Belgarath Investments Pte. Ltd.
International Franchising Married, two children Business Environment in Asia Objectives Develop an understanding of business issues from an Asia Pacific perspective.
Understand the influences of environmental factors on business practices and business success.
Understand the types of, and ways to analyze, business environment influences on strategy formulation and implementation. Approach Can technically analyze We focus on understanding and applying information economic environments
political environments
social environments
technological environments
But the experts are economists, political scientists, anthropologists, sociologists…. To understand current and relevant issues in business environments
To forecast and plan
To better develop strategies for a firm
To aid in decision-making and implementation Quick primer GDP and Prices Prices in an economy PPP GDP at PPP National Incomes change over time GDP Composition – What Country? VIETNAM CONCLUSIONS How do we measure a country’s wealth? Typically use GDP GDP = C + I + G + X – M Gross national product (GNP)
Gross domestic product (GDP)
Gross national income (GNI) Value of all production by enterprises in an economy, regardless of ultimate ownership of the enterprise
Nominal GDP (current prices)
Real GDP (fixed prices)
GDP per capita C= consumption
I = investment
G= government expenditure
(X – M) = net trading activity
(exports of goods and services – imports of goods and services) Measured by Inflation
Deflation Consumer Price Index (CPI)
focuses on purchases by consumers
various measures of CPI, include different baskets of goods & services
GDP deflator
focus on purchases by consumers plus governments and industry. Purchasing power parity (PPP) is an indicator of price level differences across countries, in which a basket of goods and services is costed in the currency units of different countries.

PPP is used to convert expenditures across different countries into an artificial common unit, to eliminate the effect of price level differences across countries.

If average prices in a country are lower, its GDP at PPP is higher compared to other countries than its unadjusted GDP. Source:http://data.worldbank.org/data-catalog/GDP-PPP-based-table) Growth in an economy Growth is important for many economies Where does real GDP growth come from? Real GDP growth
Percentage change in real GDP in a given time period Particularly pronounced in emerging and transition economies More people
population growth
Increase in net savings
capital growth or accumulation
Improvements in use of labor and capital
Growth in Total Factor Productivity (TFP)
Changes in technology
Changes in how capital and labor are used in an economy JAPAN GDP Composition – What Country? GDP Composition – What Country? GDP Composition – What Country? GDP Composition – What Country? GDP Composition – What Country? GDP Composition – What Country? GDP Composition – What Country? HONG KONG SINGAPORE TAIWAN SOUTH KOREA INDIA CHINA VIETNAM What are the implications of these trends?

What can we conclude about development paths from these trends?
How does this affect short-, medium- and long-term planning and strategizing for these countries?

Developments are both regional and industrial
Changing face of competition
Changing opportunity set
Influences choices about where and how to compete in a country
Also influences choices about one country vis-à-vis other countries Kodak Express Case Kodak Express Case The following data are available:
What process should we use to translate these data to an estimate of demand for Kodak Express outlets by country Gross domestic product at PPP per capita
People per household
Income distribution by quintile
Kodak’s criteria
What is the total number of Kodak Express outlets by country?

What will be the demand for Kodak Express outlets by country, in 2016?

Is this all the information you require to make your choice of which countries to enter and when?
Back to the module Economic information and country analysis
Should be supplemented by other information
Key concepts:
Institutional environments
Country risk, economic risk, political risk
Major points of discussion Your responsibilities Institutional (country) environments
weak versus strong
Strategies for competing in weak institutional environments
Forecasting and analyzing country environments
Contending with social and cultural issues
Industry evolution and strategy
Class and Case Discussions
Country Business Report
Case Exam Case discussions
Short In-class assignments/presentations
Developed over the next three to four days
numerous cases, some prep time provided for a few cases
Described and assigned during our class sessions.
Presented on the morning of the fifth day (Friday)
Please discuss with me now, if you have any questions
Saturday afternoon. Continuing from Kodak Two questions:
What does the world look like today?
Do we just profile countries by economic indicators?
A world of 7,000,000,000 28 year old
Han Chinese
The most typical person… Broad Statistics
82% of the world’s population is literate
51% live in urban environments, 49% rural
40% work in services, 38% in agriculture, 22% in industry
33% Christian, 21% Muslim, 13% Hindu
19% Chinese, 17% Indian, 4% American
13% speak Mandarin as their first language
5% Spanish
5% English

Continuing…. After the statics…

What are the relevant conceptions of geography, differences and distances?
Gapminder…. Presents the world in a new way…
Our conception of the world Borders, distances, country neighbors
Regions still important
How should we compare and contrast regions, countries and sub-national regions?
Important in the past
High regionality to business
But do distance and borders matter as much for cross-country comparisons?
What determines opportunities?
What determines proximity?
What creates costs and challenges in transactions and production?
Consequences of development?
New York
How did we get here?
Country and Regional Developments First cut:
Break http://www.gapminder.org/videos/shanghai-new-york-mumbai/
Second cut: Third cut: Health and wealth
Tells us much about regional, country, and sub-national levels of development.
Profiling by standard economic indicators
E.g., China
Analyses of institutional environments
Current and trends

We return to discuss the Metro Cash and Carry case
Full transcript