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Write Up1

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Gks06
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Upsala model The Uppsala model is one of the theories describing the internationalization

process of firms. The model states that firms first choose to enter nearby markets with low
market commitment. ... These are, size of the firm, competitive advantage and the product.
Environmental  In 2010 when filmmaker Gabriela read article how Ocra whale killed trainer,
she wrote documentary Blackfish how themes parks harmed animals as well as trainers. It went
viral. Due to high public pressure Corporations cut sponsorship ties, regulators opened
investigations into the parks’ safety practices, and lawmakers proposed a ban on breeding orcas
in captivity. Stock price plunged 60% and CEO resigned and company stock not recovered.
Also, companies now have to follow COP21- Paris climate Agreement as more and more
companies getting concerned about environment issue by industries.
In 2010, Gabriela Cowperthwaite read a news article that changed her life. It described how an
orca whale had killed a trainer during a show at SeaWorld in Orlando. Cowperthwaite, a Los
Angeles filmmaker who liked taking her twins to see orcas at the San Diego SeaWorld, spent the
next two years making an investigative documentary, Blackfish, which depicted how the theme
parks’ treatment of orcas harmed both the animals and their human trainers. The film cost just
$76,000 to produce. Yet it quickly went viral, capturing the attention of celebrities and animal
rights groups. Public pressure on SeaWorld mounted.
Corporations cut sponsorship ties, regulators opened investigations into the parks’ safety
practices, and lawmakers proposed a ban on breeding orcas in captivity. Eighteen months after
the release of Blackfish, SeaWorld’s stock price had plunged 60%, and CEO Jim Atchison
announced that he was resigning. By 2018, SeaWorld’s stock still had not recovered—all
because one woman had read a story about orcas and made a low-budget film.
Social  Social activism is not just for social activists anymore. In a hyperconnected world, by
Standers can post cell phone videos that can go viral. In April 9, 2017, when United Airlines
oversold tickets ( a flight to Louisville, Kentucky, )the airline decided to remove four passengers.
One of them, refused to deplane. Passengers video-recorded the person as he was violently
dragged from his seat and posted the foot age on Twitter and Facebook. After 2 days, company
stock declined by $255 million.
Political and Geopolitical  Political risks now come from : individuals wielding cell phones,
local officials issuing city ordinances, terrorists detonating truck bombs, UN officials
administering sanctions, and many more.
As companies extend their overseas supplier relationships in search of improved margins,
customization, and speed, the chances rise that a political action will disrupt the distribution of
goods and services to their customers.
(We have observed how events in far-flung places affect businesses around the world at
dizzying speed.) Anti-Chinese protests in Vietnam (rose when china moved in Vietnam
economic zone for oil exploration. It affected supplies of Li& Fung company which is one
of the largest wholesale providers of clothing n toys closed their factories at Vietnam, causing
slow delivery fo goods ) create clothing stock-outs in America. Civil war in Syria fuels a refugee
crisis and terrorist attacks in Europe, leaving the tourism industry shaken. A North Korean
dictator launches a cyberattack on a Hollywood movie studio)

Solution
Organizations that excel at risk management have four core competencies:
 Understanding
 Analyzing
 Mitigating
 Responding to political risks. A series of questions can help executives identify gaps in
each area and increase their ability to get ahead of and minimize risk.
4 A’S FRAMEWORK

1. ALTER – When companies attempt to change government policies in their favor ,


mostly a give and take situation but this type of alteration mostly happen only when the
companies have huge powers to influence political decisions.
2. AVOID – bypassing the effects of government actions , maybe by making adjustments in
the company’s strategy or its operations.
3. ACCEDE—The company might choose to adjust its operations to comply with
government requirements for several reasons , sometimes there may be no other choice ,
the company may simply not have the power to bargain for a change or there may be no
other feasible way available to avoid the impact. For example pepsi co set a high priority
on penetrating the large Indian market so they complied with the government foreign
exchange requirements.
4. ALLY – coming together of 2 or more companies to increase the bargaining power and
forcing govt to alter its action or to avoid being exposed to its adverse effects.

Competition from China


 India’s Bajaj Auto quickly captured the two-wheeler market share in the African
continent. Due to the rise of the Indian brands number of Chinese companies present in
the African market has come down from more than 200 a decade back to less than 40
now and few have pan presence.
 It is No. 1 or 2 in more than a dozen African markets, with a cumulative market share of
40% as 2.7 million two-wheelers units were sold there recording a compounded annual
growth rate of 30% in the last three years.
 Bajaj has been able to compete and win in Africa based on its product strengths,
local assembly operations, quality assurance, network of distribution partners,
dealers and service centres.
 Word of mouth from boda boda riders about robustness of Indian products coupled
with very strong distributors on the ground with financial muscle is making them
win more customers.
 Bajaj’s Boxer bike has become a ubiquitous brand in Africa and has helped the company
grow share from 25% five years ago to 40% in 2019-20.
 Bajaj Auto has over 10 assembly facility in Africa and it works with a dozen distributors.

 For Bajaj, international markets accounted for 47% of the total volume in fiscal 2020.

Recommendation
1. No explanation
2. For example if we look at the policies in most of african countries they were very open to almost
100% of foreign investments.
3. Look for customer demographic , labor and quality of products.
4. This is very important for international business ,bajaj should enter markets where they can see
a long term understanding with the government.
5. When a countries currency depreciates as compared to ours ( bajaj ) then net foreign earning
also take a hit , so before entering a market one should look at this factor as well.
6. By mode of entry we mean with how much force we ( bajaj ) should enter a market , this
decision is very crucial and it depends on many factors we have mentioned above and also what
the type of customers we will be targeting.

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