Expanding a Multinational Company Research Paper - 1

Expanding a Multinational Company - Research Paper Example The revenue earned by the company in 2012 is $4.2 billion. After doing a market research on different countries the company decided to extend its operations to Singapore. Environmental Analysis An environmental scanning of the new market chosen for expansion of Network Manufacturing Company is being done using PESTEL analysis. PESTEL analysis helps to analyse the macro economic factors which are used in the environmental scanning (Lorat, 2009). Factors Analysis Political The political structure of Singapore is headed by the President at the top, who is the Head of the State. It is followed by the Prime Minister who is the Head of the Government and then the cabinet which consists of the executives who are also controlled by the President. The political structure of the country allows many foreigners to come and reside in Singapore and carry out their businesses without the fear of any political barrier. Thus the company will not face any threat from the political environment of Singa pore. Economic The Gross Domestic Product of the country in 2012 is $239.7 billion. The Gross National Income per capita is 59380 (in Euros) and the present inflation rate is 5.2 per cent (Singapore Economic Development Board, 2012). It is a well developed country and is highly successful for carrying out businesses. The country has an open business environment and is free from corruption. Therefore, the chosen company does not possess any threat from the economic scenario of the country and can carry out its business in the new market chosen freely and successfully. Social Singapore is a place of various cultures. The country possesses a strong social responsibility and allows different foreigners from all parts of the world with diversified cultures. The country is also known as a nation of many languages as the residents here speak in different languages. Thus the social environment of the country allows many outsiders to reside in the country and continue their business operatio ns. The chosen company is free from the barriers related to the social and cultural dimensions of the country. Technological The country is full of new technologies and allows many foreign investors as well as many foreign companies to continue their operations in the country under the controlled administration of the government. Environmental The environmental factors of the country support foreign investors as well as foreign businesses to start and continue their operations in the country. The country possesses a code of ethics for the businesses running there. It includes transparency; coordination among the managers, the directors and the investors and professionalism in the business. A business following these ethics will have no environmental barrier from this country. Legal The regulatory business of the country helps to encourage the businesses that are operating there. The regulatory framework of the country favours the businesses running there. The investments that are ma de by the foreign investors are supported by the law of Singapore. Entry strategy and Ownership Structure A company expanding into a new market involves a lot of risks. The company may possess several threats from the new market. Thus it is always beneficial for the company if it goes into a joint venture with an existing company in Singapore. It will reduce the