2440100840 HEEWOO.

JANG

1. There are four major market screenings to enter a new market: market potential, levels of
competition; legal and political environment, and social-cultural influences. If
Brompton folding bicycle has the intention to open its new market in Indonesia,
Using sing these four market screenings: what are the two possible factors from
each market screening that Brompton has to consider?

In order for Brompton to make direct overseas investment, the feasibility must be
reviewed for the first time. The review should be passed considering investment
costs, including required corporate resources, transaction costs, etc. After that, the
overseas direct investment environment should be analyzed and market
inspection should be conducted. This is to examine external factors that
Brompton will encounter, unlike practicability. The feasibility of the investment
plan should be reviewed using market demand, rivals, growth potential, potential
sales, raw material supply, production costs including availability and cost of
labor, transportation costs and taxes, expected profitability, asset profits and
return on investment as the basis of the review. In the case of overseas direct
investment, the above external factors should be considered with particular care
as the risks are greater when meeting external risks than any type of investment.
Among them, market demand and potential growth based on rivals will be the
basis for determining direct overseas investment. All of the above factors should
be reviewed to identify the risk factors of the investment country if foreign
investment has been determined. Typically, the government should check the
government's policy on foreign investment, the stability of currency value and
exchange rate, the availability of social overhead facilities and commercial
substructure, and the degree of development of means of transportation.

2. What are the three basic forms of FDI?

It refers to an investment made by a company in one country for the purpose of directly
participating in management from a long-term perspective by acquiring an investment
stake that can be controlled through the establishment of a new business in another
country or the acquisition of an existing business. All tangible and intangible assets,
including intellectual property rights and real estate, are transferred to include
investments made for the purpose of creating wealth.The Organization for Economic
Cooperation and Development (OECD) and the Multilateral Investment Agreement (MAI)
also consider foreign direct investment in the sale of business sectors and business rights
of domestic companies to foreigners. In addition, the investment in which foreigners
acquire stocks and shares to exert real influence on corporate management can also be
seen as foreign direct investment.
It refers to overseas investment for the purpose of participation in management and
technology partnership, rather than simply operating assets overseas. The main types of
overseas direct investment include the establishment of overseas local subsidiaries,
participation in capital to existing foreign corporations, and the acquisition of real estate
and the establishment of branches.

3. What are the differences between licensing and franchising?

Licenses refer to royalties such as licensing fees or fees for new technology or new
technology, and fees for the use of trademarks or marks to owners when they use new
technologies, know-how in new manufacturing, or trademarks developed or owned by
another company or individual. If the royalty is paid in advance on the condition of use
for a certain period of time, the intangible asset shall be treated as an intangible asset if
the requirements for recognition of the intangible asset are met.

Franchise refers to a chain of companies in which the parent (franchise) who has a
franchise (privileged) in the distribution, service of goods, etc. becomes an independent
branch (formed by organizing franchisees) in the chain. The franchiser receives royalties
(specialty fees) from the merchant, manages the product composition, store,
advertisement, etc. in the same way as the direct management point, and is in charge of
management guidance and sales promotion, instead of granting exclusive business rights
to the merchant within a certain area. In this case, the royalty paid by the merchant shall
be paid in advance on the condition that the merchant subscribes to the merchant for a
certain period of time, and if the requirements of the intangible asset are met, it shall be
treated as intangible assets.
Therefore, licenses and franchises differ in how intangible assets are operated, although
they are identical intangible assets if they meet the requirements of intangible assets.
4. What are the main differences between a joint venture and strategic alliances

Strategic alliances are based on more flexible non-equity partnerships among partner
companies, unlike the existing form of equity cooperation in which an entity is set up
separately by joint investments, such as joint ventures, purchases and mergers.
Strategic partnership refers to the partnership of two or many companies across all parts
of their functions, including technology, production, sales and capital, based on mutual
cooperation. For example, it is a new form of 'co-operation' such as joint development of
technology, joint use of patents, and sharing production lines and sales lines.
A joint venture is a form of direct investment, which refers to the management of
enterprises by investing jointly with local capital. Direct investment refers to direct
participation in management by owning stocks.

5. Please read the short case: Look before you leap from the main textbook, page 405-
406. Kindly answer the case question #13-22 to #13-25

#13-22: Grameen Danone is a JV among two companies the nonprofit Grameen

Group and the for-profit Group Danone SA. What are the benefits of this JV to each
of these companies? Why did each choose to participate in the JV?

I think that the desire of the Group for a bigger market and the Grameen Group's social
goal to improve Bangladesh's economy have met and a joint venture called Grameen
Danone has been made. For the Danone group, the large number of people in
Bangladesh represents a large market. Market demand in overseas direct investment is
the most important indicator of the potential for success. In the case of Danone,
Bangladesh's population is believed to have entered the market after seeing great
growth potential to reflect demand in this market. In the case of Grameen, it is believed
that the decision was made by focusing on the positive influence of Bangladesh, which is
a non-profit organization and comes as a joint venture, rather than the benefits.
Grameen would have decided on the joint venture in hopes of creating jobs through it.
In the case of Danone Group, the joint venture with Grameen could reduce the risk from
external factors and enter the market at a lower cost. Grameen companies can develop
Bangladesh's economy by providing jobs to people in a more efficient way. In addition,
both groups are profitable because they can provide more nutritious drinks to
Bangladesh consumers.

#13-23 From the perspective of each of the partners, are there any potential pitfalls
to joining this JV?
The danger that Grameen Danone may face is the collapse of the group, which is the risk
of all joint investments. The two groups' mutual understanding is right and the joint
venture is now underway, but if the situation changes, one group will ask for its
disbandment, while the other group will suffer heavy losses. For example, if Danone
Group thinks the continuation of the joint venture is more damaging because sales are
lower than expected and the expected revenue is not reached, it could ask for the
group's termination. In this case, the social benefits of the Grameen group (such as jobs,
relieving Bangladeshis' hunger, etc.) are eliminated. In addition, there will be losses from
opportunity costs incurred by using the investment. If Grameen Group declares the end
of the joint venture over issues such as job creation or technology transfer by thoroughly
securing the technology, Danone will suffer losses such as the cost of entry and profits it
would have gained from entering other markets.

#13-24 Now consider Danone’s JV in China. What were the benefits of this JV to
each of these companies? Why did each choose to participate in the JV?

Danone would like to invest in a Chinese market rich in potential for development, but
he would have made joint investments with Chinese companies to benefit from the fact
that it is difficult for international companies to succeed in China, the risk of cultural
differences and administrative preferential treatment. In the case of Chinese companies,
Danone's investment would yield greater profits than setting up a company alone.

#13-25 What could Danone have done to avoid the problems it encountered in
China and India?

think the problem is that continuous, honest feedback didn't go back and forth. Paper
did not inform Danone of their partnership with other companies, and they put their
interests ahead of those of the joint venture because they thought each other was
unfaithful and not more conducive to each other's interests than expected. The same is
true of India. In order to prevent this, we must recognize that the profits of the joint
venture are our own profits, and to show an attitude of taking small losses for the
interests of the joint venture. And always communicate and know that their interests in a
joint venture are not their own.