Asian Business Environment

Question 1

Assumption1—I assume that the two developing countries with same amount of population. Zimbastori is more advanced than Undesbekistan in infrastructure capacity and manufacturing base.  Assume political and economic environment (inflation rate, income level, tax, etc.) remain constant. Also, these two countries have rich natural resources.

Assumption2---I also assume that the literacy rate among younger population is relatively high, and they are more likely to use high-tech products, and spend more, save less. However, aging population are just in opposite situation, they are more appreciate the old way of doing things.

1) Manufacturing approach 

In Undesbekistan, I would allocate manufacturing industry equally in 4 regions. It has abundant labor force so labor cost is relatively low and labor-intensive industry is profitable. Manufacturing industries such as apparel industry and miscellaneous manufacturing Industries will do well. Also, this country has rich natural resources, so metal industry, lumber and wood industry, paper industry, rubber and plastic industry and tobacco industry have promising future and the GDP is going to rely heavily on exporting those products.

     In Zimbastori, in response to the shortage of labour force, Zimbastori will improve its technology and education to be more capital-intensive and high-tech and science oriented thus increase productivity. Industries like chemical and pharmaceutical industry, electronic and electrical equipment industry, industrial and commercial machinery industry, measuring, analysing industry and transportation equipment industry. Due to high cost of labor, manufacturing should outsource to seek more cheap labor to gain more margins. In addition, the two countries have big amount of population, so household products like FMCG industry is prosperous as well as food industry.

2) market mix elements

3) Logistics approach in each of these countries

Undesbekistan: Shopping online is a new trend. Infrastructure in this country is not well-established, so the first thing to do is to improve infrastructure base. That requires to develop transportations (increase the road capacity and build a convenient transport network) and build more modern facilities such as warehouses in convenient locations.  It also need to establish integrated system to connect input with output that means to build a smooth product flow. It also requires effective coordination between suppliers, distributors, retailers and customers. Also, it need to increase the inventory availability and reduce processing time.

Zimbastori: Based on the assumptions we made, Zimbastori has modern and relative well-established infrastructure, the product flow has been quite smooth already, so it should focus on integrating information system, which means use high-technology to plan and forecast demands to reduce lead time and costs so that customer service can be improved.

4) What regions would you invest in? and why? 

     Assume that I want to invest in hotel and tourism business sector.

In Undesbekistan, I would invest in in those zones which have more historical buildings and other famous and beautiful attractions or invest in the capital area to attract more visitors. Since cheap and abundant labor force and ample resources, construction of hotels is more profitable.

In Zimbastori, I would invest in zone 1 and zone 2 because there are more populations which means more modern and more developed, traffic there would be convenient. Although cost will be relatively high, but the profits will outweigh the costs.

5) future growth potential

In the long term, Undesbekistan would have large potential since young population are more energetic and innovative, the entrepreneurship industry will grow. With the increase of life standard, people are inclining to consume more, which can lead to growth in manufacturing, distributing, retailing industry. Domestic demand and service outsource are main drivers.

Zimbastori is suffering from the problems caused by aging population and lack of labor force. But electronic industry and other high-tech related and capital intensive business sectors will see a significant growth in the future.

6) locate hospitals and schools proportionally

The most important thing to consider where to locate schools and hospitals is whether that area is highly-populated. In Undesbekistan, schools and hospitals should allocate evenly in 4 zones, in each zone, those should be located at city centre or where the transportation is convenient. In Zimbastori, those facilities should be located at zone 1 and zone 2.