Case 17: Question one:
The basic force behind Sunny Hwang’s idea of expanding his business to the international level was to search for how he could manufacture goods in the most cost-effective way. This reason is based on his decision of doing business in China, where he discovered it as being much cheaper. For example, China is featured by inexpensive labor and raw materials in the aspect of manufacturing in a most businesses and industries. The idea of investing his business in China was not a good idea because of having a slight advantage and a heavy disadvantage at the same time. For example, although the materials were readily cheap and available, they ran out of good quality.
As a result, the business would not have survived if it only relied on the advantage of meeting cheap costs. Hwang’s business could have succeeded if he conducted extensive research on various international markets. This would have enabled him to consider investing in other countries besides China including Thailand and Japan. For example, the Thailand market holds a large share of the market within the Asian Continent.
The first strategy of Hwang involved making deals with a local Chinese businessperson who had also made a move in ensuring quality of his goods through employing supervisors to inspect his products. However, the strategy was not the best since his business needs were unable to be met. The next strategy involved Hwang taking the huge responsibility of taking over his company. However, he decided to get assistance from one of his relatives in running the business who acquired skills from the training he went through in the United States which related to the task he was assigned.
This strategy was better because he got assistance from a person he knew and trusted in a greater way. Therefore, the former strategy was not as effective because he did not conduct extensive research on the people he was dealing with. He made a rash decision in trusting the local Chinese tradesmen before learning on how they conducted their business.
One of the opportunities that the U.S firms could evaluate from China is on employees. For example, if the Salary of twenty laborers in China could sum up to what one worker earns in the United States, this could be an advantageous opportunity. Businesses in the United States who hire Chinese workers would end up earning more than other firms earn because expenses used in wage payment would decrease as the productivity in labor increases. Another opportunity would be investing while using efficient and reasonable costs.
For example, if the cost of rent is cheaper in China when compared to the United States, this would bring a greater deal for American businesses investing in China and they would gain a significant opportunity based on cutting the costs of capital involving reduced expenses on land. Some of the features found in China that would be ideal for minimal businesses include the availability of adequate resources including raw materials and labor force at an affordable cost.
One of the challenges that Hwang experienced when investing his business in China was having difficulties while ensuring high quality in the production of goods. Although affordability is associated with the access of adequate resources, the value of the commodities produced is low. Other problems that can be faced by American investors when conducting their businesses in China include language barrier, cultural indifferences, lack of a stabilized establishment of the market due to unfamiliarity of the surrounding.
Case 21: Question five
One of the basic precautions that Fox would have considered in minimizing the level of property damage caused involves the installation of certain protection equipment. For example, installing an emergency system of alarms would have enabled the organization in being alerted at a quicker rate about the incident and hence recover more of its property. Fox would also have taken the precautionary step of inspecting the electrical system. The fault in the electrical structure of the plant would probably have been spotted earlier if it underwent regular inspection. As a result, the company would have been saved from suffering such a tragic loss and hence escape the trouble of bearing greater expense consequences.