MGT520 International Business Assignment No.1 Fall Semester 2012

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MGT520 International Business Assignment No.1 Fall Semester 2012

Mr. Nadeem has been running a business of leather products since 1997. He has been producing a range of leather products including jackets, purses, and belts. Fifteen years back, he started the business in a small shop as a sole-proprietor but now he is the owner of a well-known leather manufacturing company, which has a wide network of branches all over Pakistan. Although he had captured a big deal of market in a few years but the new entrants in the leather market were creating some threats for his business. So, he decided to shift his focus towards the global expansion of his business in 2005 as he had become well aware of the importance of a globally operated business. He tried to globalize his business but he could not do so due to certain restrictions on cross border movements. Before going international, he used to operate solely in Pakistan without importing or exporting his products in other countries. In 2008, he once again took step to go international and got succeeded due to the facilitations provided on cross border movements. So, he opened his first
international branch in the same year in Bangladesh considering it as a nearby country and having some similarities in cultural values. He learnt the experience of operating the business internationally for two years and then he decided to open his second international branch in 2010 in Dubai. While operating his business in Dubai, he noticed that the demand of his major leather product, the jacket, is not quite reasonable due to the dry and hot weather across the major portion of the year. One of his consultants, Mr. Hashim, suggested him to expand his business towards those western countries where the weather conditions remain quite frozen and the demand for such product (leather jacket) is quite high. By considering the suggestion of his consultant, Mr. Nadeem opened his third international branch in Rhode Island (a state in USA) in late 2011. As expected, he observed high demand of his products here. He had been operating in Muslim countries only but he had to deal in a non-Muslim state for the first time so he came across certain cultural issues. After settling down the issues here, Mr. Nadeem will further decide how far he can expand his business internationally in the best manner.
Questions:
1. Identify and discuss the factors, which influenced Mr. Nadeem for global expansion. (10)
2. Identify and discuss the pattern of expansion Mr. Nadeem adopted while expanding his business towards Bangladesh. (2)
3. Identify the pattern of expansion Mr. Nadeem adopted while expanding his business towards Rhode Island. (2)
4. Discuss certain cultural issues, Mr. Nadeem may face in non-Muslim state after having a plenty of business experience in Muslim countries. (6)