Global Market Strategy and Entry Risk Strategy

By: Samuel Aluri- Obua

April 22, 2015

Table of Content1.1 Acronym .........3 2.1 Abstract43.1 The Globalisation........53.2 Drivers of Globalisation.........53.2.1 Declining Trade and Investment Barriers53.3 Role of Technology Change...64.1 Business Activities of Globalisation..74.2 Global Economy Changing Demographics.......84.3 Understanding International Strategic Planning in a Global Context.......94.4 Developing Global Strategy...95.1 Region by Region Analysis of Challenges that might Impedes Global Investments....105.2 ASEAN Countries..105.3 Latin American Countries......125.3.1 Risk That Affects Latin American Investment 135.4 European Union and Countries......135.5 Middle East Countries155.5.1 Business Risk in the Middle East Countries...165.6 African Countries...175.6.1 African Growth Drivers...195.6.2 Risk of Investing in Africa...195.7 North American Countries..205.7.1 Investment and Integration of North America.215.7.2 Challenges and Risk in North America Region216.1 Summary .....227.1 List of References.....22

1.1 Acronym ASEANAssociation of South East Asian NationsCPCapital FlowCARICOMCaribbean Common MarketCIS Commonwealth Independent StatesCOMESACommon Market for East and Southern AfricaECEconomies of ScaleEUEuropean UnionEULEuropean Union LawFDIForeign Direct InvestmentGBIGlobal Business IndicatorsUKUnited KingdomUSA United States of AmericaKFCKentucky Finger ChickensWBGWorld Bank GroupWTOWorld Trade Organisation

2.1 AbstractInternationalisation in the past was a byword in the late 1980s to early 1990s no one could understand with certainty but in todays world, its exhibits are not dwindling but up on the increase. It is a term that refers to trade investment and growth in business. The world in which global business operate is facing forces of global integration. Globalisation has caused moves towards a single homogenous global market in which consumer preference are converting to a world standard. While there are indeed many common market needs, demand and acceptance of certain global products, there are also many deep divisions, cultural, national differences and technological advancement between countries and market. Theodore Levitt (1983), assert that global firms should view the world as a single unit, and must strive to produce and market standard products worldwide. He further augmented that global customers will only be in the position to accept standard products, only if companies are willing to meet high-quality objectives and lower cost. Indeed, international companies should be in the position to adjust product offering for local differentiation with reluctance. These in a long run benefits companies in meeting (EC) economies of scale.A real global business strategy is the result of a comprehensive strategic decision-making process. Business strategy is the development and utilisation of specific characteristics that set the business apart and offers the enterprise with an advantage over the competition.

3.1 The Globalisation According to (http://www.saylor.org/books (page 14), International business encompasses a full range of cross-border goods, services exchanges, or resources between nations. These transactions go beyond money exchanges for physical goods to include international transfers of other resources, such as people, intellectual property. According to Punnett 2004 in (Karl Heil retrieved from. http://www.referenceforbusiness.com/management/Str-Ti/Strategy-in-the-Global Environment.html#ixzz3XBuV98Js) global understanding and concept is dependent on a number of factors such as: Development in technology made contributed to easiness of international communication and movement. Movement around the world reduced the distance between countries. Reduction in distances between countries brought peoples awareness about what happens outside their countries. Understanding and travelling allows for comprehension of business opportunities elsewhere. Business opportunities have increased trade internationally. Increase trade now denotes integration of world economies.3.2 Drivers of Globalisation Hills (2005:10-16) identifies the following two macro factors that underlie the trend towards greater globalisation3.2.1Declining trade and investment barriersHills (2005: 10-16) eludes that global trades occur when a firm exports goods and services to consumers in another country. Foreign direct investment happens when companies invest in businesses activities outside its home country. The establishment of the world trade organisation (WTO), with over 146 members States, responsible for establishing, further and entrenching rules-based trade. And for managing world trading system according to (Hills, 2005:9), this development have contributed and lowered trade and investment barriers and lower restrictions on capital flow (CF). These in turn have facilitated the globalisation of markets and production. In addition the reducing trade barriers, many countries have progressively removed the restriction to foreign direct investment (FDI), with the globalisation and the resultant growth of world trade.

3.3 Role of Technological ChangeThere has been serious advancement in the 21 century the microprocessors is one that has the most significant impact. The cost of microprocessors will continue to fall while their power increases according to (Hills, 2005:12) satellite, optic friar and wireless communication which has rocked this world of business. This technological have contributed to the globalisation of markets and production, through better communication and integration of worldwide activities.Business globalisation is not difficult to see today with the mushrooming of product brands and services in the world, for instance, Apple products IPAD and IPHONE can be met across any corner of the world, foreign financial banks like standard chartered bank and Barclays of UK can be seen virtually in every country in the world, American Coca-Cola brands investments are in every corner of the world with fixed investments which in the past it was just a dream but a reality today. In the early 1990, according to (http://www.referenceforbusiness.com/management/Str-Ti/Strategy-in-the-Global-Environment.html#ixzz3XBuV98Js) valid evidence existed that internationalisation was indeed a reality. The achievement of Singapore, quick Asian economic growth and more so the African countries being heard of and the industrialisation of economies like Mexico, Brazil and others is indicative of event which imply that globalisation is excellent for weak economies. The growth in China emerging the second world largest economy in the world and the exponential growth of USA in the late 1989 was a result of global presence.The presence of globalisation today does not exist without challenges. Globalisation exists amidst many diverse cultures and society with varying needs and aspiration. Because of trade currency in the global world some economies slumped down because of USA economy not doing well and triggering a fall in currency values.

4.1 Business Activities of GlobalisationA company may decide to go global outside its country in primarily four steps: investment, trade, registration or licencing a company and entering into a strategic partnership or alliance. A tangle product might be the trade inform of cars, electronics and other commodities by way of export or import. Other could trade in financial services which are intangible by exporting or importing. There are many ways to market entry by companies, this could be through foreign direct investment ( FDI), being in charge of companies asset in other countries, investment portfolio gaining stock in foreign companies to acquire control, and establishing strategic alliance is one other way to foreign market entry. Which is manifest in different ways and enable access to local foreign markets and dodge hurdles for example, government laws and regulation, political problem and social disorder with global entry and lastly entry can also happen through franchising which mean allowing foreign companies to use the brand names and follow company standard and pay the company royalties typical examples are, KFC, McDonald presently found everywhere.Global strategy is a going concern and enormous tools designed to allow conglomerate function effectively across borders. Crafting a working strategy lies in the hand of management at the apex of the organisation and implemented at the lower level. Succeeding in this require a host of activities either local strategy or international strategy design to create services or products for the market.

Source: http://www.referenceforbusiness.com/management/Str-Ti/Strategy-in-the-Global-Environment.html#ixzz3XBuV98Js)

4.2 Global Economy Changing Demographics

Hill (2007:18), maintained that trend towards globalisation has been a somewhat dramatic change in the demographic of the global economy over the past 28 years. And identifies four styles that described the demographic of the global economy: At the outset, US dominated in the world economy and world trade Following was US dominance in foreign direct investment around the globe And multinational US companies firm on the global business Lastly, almost half the globe economies of the communist world were off limit to western global business.Changing World output and World Trade

CountryOutput World shareShare of world OutputWorld export share

USA40.320.910.4

Germany9.74.39.5

France6.33.14.8

United Kingdom6.53.14.7

Japan5.56.95.7

Italy3.42.93.8

Canada3.03.53.4

China-13.25.9

Source: Hill (2007:19) The above world trade picture gave practical examples in 2007, but by 2015 the fingers have moved up or down over the years.

Doole and Lowe ( 2000:19) assert that trend in the emerging market are now becoming more economically powerful, and that by 2020; China, South Korea, Taiwan, Brazil, South Africa, Nigeria, Russia and India will be among the top tier of world economies.

4.3 Understanding International Strategic Planning in a Global ContextInternational Strategic planning is a method adopted by multinational companies in order to formulate an effective global strategy. International strategic planning is an evaluation of external as well as the internal market environment. Through which they set their long-term and short-term goals, and then they implement a concrete plan of action in order to accomplish that objective (www.thegeminigeek.com/what-is-global-strategic-planning)

Nail Ritson (2013), alludes that companies are nurtured from a local markets to a global markets e.g. the oil industry than others like constructions, transport, and services for instance, insurance. Internationalisation brings risks - currency fluctuations, political changes, etc. so organisations may be slow to develop global presence fully.

4.4 Developing Global StrategyAs companies considers global business expansion, where they inclined to expand as they begin to step into the global market (or take additional steps if they are already there)?Business strategists typically recommend that a company considering to move into one region or country at a time reducing pressure on the current business. The implications of shifting from a domestic to a global enterprise are significant, and companies will often find unexpected issues to deal with as they invest. Their speed and efficiency for taking a global business has impacted by the amount of money a company is willing to spend. Their tolerance for risk, access to human capital, the availability of resources, and the welcome the company receive in a foreign country. These are not a simple decision, but the move to become a player on the international stage is an important one as asserted by (https://answers.yahoo.com/question/index?qid=20090503185705AAhtJk3).

According to (https://answers.yahoo.com/question/index?qid=20090503185705AAhtJk3). Among a company considerations right now are that, in addition to working with different economies, political systems, currencies, and languages, there are trade affiliations that are well established in many places. Company strategic leaders will need to know what they are, and also recognise that new associations are created as needs change. The current connections will also change over time and may be influenced by additional factors like Chinas relationships with, and developing interests in doing business in, Africa and India and other parts of the world. Formal associations across different continents in the world are;

WTO: The World Trade Organization, with 160 member countries and 29 observers, The North American Free Trade Agreement between United States, Canada, and Mexico, CIS: Commonwealth of Independent States (containing 11 former Soviet republics), ASEAN: In Asia, CARICOM: In the Caribbean regions, COMESA: In Africa.An effective business strategy is the result of a comprehensive strategic decision-making process. Business strategy is the development and utilisation of particular characteristics that set the business apart and offers the enterprise with an advantage over the competition. It, therefore, provides: A framework for action that is embedded in the organisation and its employees, A framework for managers and others in the organisation to assess the strategic situation, discuss alternatives in everyday language, and decide on actions, based on shared values, Channels and process that builds strategic management capacity of the organisation, Strategic leaders to unleash the energy of the organisations employees behind a shared vision and belief that it can be fulfilled, It is a creative, honest and soul-searching analysis of the situation of the organisation and what to do about it. 5.1 Region by Region Analysis of challenges that might Impedes Global Investment

5.2 ASEAN Countries (Region)The integration of ASEAN economic blocks has been received with much applause. However, diversity within the economic block still poses an enormous challenge to the regional investment. Some countries being too weak and others too rich this will remain a challenge. Different indignant languages, cultures, Demographics within ASEAN community and varied educational structure will still pose an insurmountable obstacle to investments and labour movement. Smaller economies and those in the island will still be shocked to see the shortage of development.

Infrastructural development is still a challenge for some economies within the ASEAN countries, and badly still countries in the islands will find it difficult to attract investment, and let alone, free movement of labour force and this will, therefore, hamper further development. According to (World Economic Forum, The Global Competitive Index 2013-2014: Sustaining Growth, Building Resilience http://reports.weforum.org/theglobal- competitiveness-report-2013-2014) Most ASEAN countries is still impeded by poor transport; inadequate energy and communication and infrastructures, low enrolment rates and/or mediocre quality in education, and low levels of technological readiness. With the exception of Singapore and Myanmar and China, performance tends to be inconsistent across the different pillars of the Index according to (The global competitiveness report 2013 14 by wef (full report). (n.d.). Retrieved from http://www.slideshare.net/cengizucbasaran/the-global-competitiveness-report-2013-14-by-wef-full-report).

Macroeconomic environment being the third pillar, these is good in a majority of ASEAN countries, much more so than in many troubled advanced economies. In fact, Brunei Darussalam an oil-rich economy tops these pillars. The prudent and sustainable macroeconomic management is probably one of the positive consequences of the 1997 Asian financial crisis according to (The global competitiveness report 2013 14 by wef (full report). (n.d.). Retrieved from http://www.slideshare.net/cengizucbasaran/the-global-competitiveness-report-2013-14-by-wef-full-report), which created havoc across ASEAN nations and inspired reforms. Many stand to be done for ASEAN to become a more competitive, prosperous, and harmonious group. Although ASEAN economies have enjoyed economic growth over the past decade, the foundations remain relatively shaky for a number of countries.

Source: World Economic Forum, The Global Competitive Index 2013-2014: Sustaining Growth, Building Resilience http://reports.weforum.org/theglobal- competitiveness-report-2013-20145.3 Latin America CountriesLatin American regions produce a lot of commodities with the assistance of Asia. Prices of products in terms of trade have improved remarkably almost by thirty percent. And as a result people do not want inflation but rather, stability in the volatile region according to (Mr Claudio Penal expert on the Latin America in the World Economy: Council for Foreign relation 2012. Retrieved from http://www.youtube.com/watch?v=EbvWcQdib04). This paper will briefly explore some of the factors that make Latin American companies less competitive and those factors that offer opportunities to investing in the region.The poverty line between Mexico and Brazil accounts for over sixteen million people living in poverty; it is a staggering figure to consider. Furthermore, programs have been developed by Government for instance; Bolsa Familia, which have help dealt with the needs of poor people in the two countries, and in the region (Griffin, C. H. 2010). Brazil pays wages relatively very little compared to other states like Mexico in the region with the sector that is informal and Brazil major macroeconomic business are informal rendering it difficult to monitor. Corruption in Brazil and Mexico is above board. Over the years, corruption in Mexico is amongst the state officials, local government and besides all the issues of drug curtail has dealt a blow in the business operation that can be seen all over news media. Mexican violence has affected even local indignant people and so foreign willing investors, foreign tourist as well as locals (Griffin, C. H. 2010).Brazil and Mexican environment of business present a challenge to their informal legal framework. The legal structure is based on the civil law with the history far back to Napoleonic law according to (Garcia, C. & Martinez, Z. L. (2012). It is worth noting this fact; companies business in these countries might come under Server legal scrutiny.Table 1: World Bank Group Rankings of Economies, 2011 Economies are ranked on their ease of doing business, from 1-183. The rankings for all economies are benchmarked to June 2011 (WBG, 2011) Brazil Mexico

Easy of doing businessStarting a businessRegistering a propertyGetting CreditProtecting InvestorsTrading across bordersEnforcing contracts1261201149879121118537514040465981

Source: WBG (2011) Ranking of Economies in (Garcia, C., & Martinez, Z. L. (2012).

Table 2: Comparison of Mexico and Brazil of Factors Affecting Business. This table shows the percentage of responses that identified the following factors as most problematic

BrazilMexico

The most problematic factors for doing businessCrime and theft -16.5Corruption 15.2Inefficient government bureaucracy 14.2Tax regulations- 10.3Tax rate-5.0

The most problematic factors for doing businessCrime and theft -1.3Corruption 6.4Inefficient government bureaucracy 10.5Tax regulations-16.6Tax rate-19.3

Source: WBG (2011) Ranking of Economies in (Garcia, C., & Martinez, Z. L. (2012).

Business corruption is one element to be taken into consideration when planning foreign investment because the country stability increases outputs as investments are made perfect. However, corruption courses instability and hinders foreign investment and difficult for investors to management investments. According to (Garcia, C., & Martinez, Z. L. (2012) the economies of Mexico and Brazil share the same popular business structures and a similar legal structure. According to what is published by the World Bank, and other reliable sources, there are more hurdles for the entrepreneurs when establishing a company in Brazil than in Mexico. But there is a higher perception of corruption in Mexico than Brazil. However, there are many reforms in the two countries to curb corruptions and policy restructuring to favour global business investors (GBI) into these economies.5.3.1 Risk that affects Latin American InvestmentsLatin American is not absent from risk. However, the region is prone to corruption risk; Governance risk, cultural risk, law and legislation risk, That any global investors intending investment should counter this risk in order to reap the benefits of investments in Latin America.

5.4 European Union and Countries The Maastricht Treaty of 1992 allowed platform for a single currency and a European central bank within the EU. When a well functional economies, forms an economic bloc? There will always be a real functioning economic bloc. The biggest economic region in the globe is Europe with 28 member countries and a total population of over 500 million people (http://www.ouboces.org/curric/?ray-ban=593.html), and with full functional European Central Banks. The free flow of the labour force within the region have faced hollow out. People were relocating from small economies to better economies in search of jobs and better-living condition, in ways causing mind drain in those countries. Eric Markowitz (Dec 9, 2011), expanding globally can be an excellent way to grow a company business. Unless an enterprise lived in the cave, debt crisis in the euro region poses dangers not only to economic destruction," but "possibly a global depressionThe 2008 financial crisis saw the need to deal with economic governance in the European Union (EU) because of individually weak economies. These countries slimmed down their economies resulting in debts and deficits to an unsustainable level, causing a burden to some of the European countries. These have resulted in those countries facing stringent European policies.The establishment of European Union has made it easy for the European nation to integrate, and this has allowed free movement of labour across each European member state. Cultures in the member state work in harmony to promote economic well-being of the bloc, making it easy to establish a business as compared to other economic blocs, found elsewhere in the world. With the exception of some eastern countries whose policies hinders business set up and take a lot longer. However, European Union integration has come at an enormous cost to some countries in term of risk and putting mush pressure on European Central Bank. The recent riots show some countries threatening to pull out of the Union because of the risk the Union emits. If a company intent to go global and enter European Union, then the company should consider the followings: Comprehending any obstacles a company might encounter while penetration EU market; Understand how to counter risk in the EU market; Pay attention to customer needs and expectation; Compared market tactics by big competitors; Assess EU market and its potentials. According to (NEW DIMENSIONS OF BENEFITS AND RISKS TO BUSINESSES IN THE ... (n.d.). Retrieved from http://steconomiceuoradea.ro/anale/volume/2013/n1/010.pdf) The Economist Intelligence Unit in cooperation with the company Marsh Romania. The level of understanding of risk was crafted for reports that highlight the challenges of risk management faced by the European companies. Each report covers a different field of the risk business. These are all challenging in the form of national legislation alignment with the (EUL) European Union Law, and the potential costs of failure or risk mismanagement have significant effects.

European risk affecting companies are; Health, safety and human resources, Environment responsibility, Managers liability and a lot of others. In Eastern and Central Europe the following risk manifest itself most frequently Strategic risk: A strategic risk affects the companys activity in many forms and leads a company not to achieve business goals and objectives, Operational risk: Operational risk and all other related risk come as a result of reliance on companies processes, product and people, Financial risk: affects a company when it comes to exchange rate and derivatives and most American companies within European Union suffer this. European economic bloc continue to dominate, with so many glitches within he union, countries like; France, Germany, United Kingdom,Netherland, Switzerland and a few Scandevian countries are pulling the union. The level of infrastructures, telecommunication and road networks and business sophistication. According to (world economic forum 2012 Davos). European Union are no longer emerging but simply becoming more innovation as a global player. European Union is not currently doing well because certain bodies that was created and impeding governance and leadership. The market is saturated and no longer becomes attractive for investors.

5.5 Middle East CountriesMiddle East countries lie just above Africa on the North-eastern part of Africa. However, the religion and culture plays a significant role in understanding the Middle East culture of business and their etiquette of business. This region is dominated by Islam and which uplift the belief of understanding someone before starting a business. The impact of breaks can be an enormous cost to the business. The implication of Fridays prayers that are compulsory and men are mandated to attend; Business meetings schedule should not coincide with individual prayer time rendering serious planning of the part business strategist. The period of Ramadan, 90% of the population fast making them weaker and disallowing, certain activities in the course of work hours depending on the type of business venture. After the annual pilgrimage convocation, two celebratory events follows; Eid al-Adha and Eid al-Fitr, which extend to three days? These impacts on business productivity and earning.World Economic Forum 2012-2013 covered sums of 13 Middle East economies out of the total of 144 countries. Of these Middle East countries were found to be falling at deferent stages of development of which nine countries out of 13 made it to the first 100 countries accounting for 69.2% of the 13 countries sampled. With the exception of Egypt, Algeria, Libya and Yemen ranking above 100 of the 140 states. Qatar rank number 11, Saudi Arabia rank number 18 and United Arab Emirates 24 best in the world (http://www.weforum.org/reports/arab-world-competitiveness-report-2013.5.5.1 Business Risk in the Middle East countriesManagement of risk is not a normal since it relates to financial and economic change. If a company is entering another unstable political country in the Middle East, The notion gets more perplex. Governance that is ineffective, corruptions, markets that are unstable, the chain of supply disruption, un predicable tribal divisions, kidnapping and legal inconsistencies poses a danger to global European and American business leaders.Business operation in Middle East countries comes with a lot opportunity. However, it also protrudes very high regulation risk particularly when it comes to European and American businesses. Risk assessment and precaution is necessary and very expensive. But the regional bloc has booming countries therefore weighing risk cost in comparison to the benefits the region offers is imperative. The countries of Middle East countries are seen by most as corrupt, despite some nations working hard to reduce this predicament. Transparency International index of (CPI) Corruption Perception Index. Middle East are understood to be a very corrupt economic blocs, for instance, Lebanon, Yemen, Syria, Algeria, Yemen, Egypt including Iraq and many more. This country lies below the list of countries with corrupt practices. Countries found to be less corrupt are Oman, Arab Emirates and Qatar according to (http://www.corporatecomplianceinsights.com/fcpa-risks-of-doing-business-in-middle-east/). The followings are risked that might affect investments in Latin America; Market Risk: This risk that should be assessed at the very primary stage when a company decides to invest in another country other its own, and they are the followings: Country Risk: This are the risk that affects business profitability in a given situation in a foreign country and which effects impacts of a business operations in relation to the financial loss. This risk involves the sovereign risk that is a risk in relation to government and agencies. Country risk results from changes in political leadership, companys privatisations, controls of currencies as well as exports and higher taxes. When a country introduces microeconomic policies that are not good may result into a country inflation impacting on businesses.

Political Risk: Its a risk associated with changes in the political and policy landscape of a country resulting in business losses for examples, laws, taxes and tariffs. Foreign companies are bound to suffer lost as a result of tight profit expropriation rendering if very hard for a company to settle creditors and could be laws that pertain to certain industry investments according to (http://www.investorwords.com/3733/political_risk.html#ixzz3Xw4ygnxx) Regulatory Risk: The is a potential risk of laws in relations to a particular business industry or certain change in security that affects businesses according (http://www.investorwords.com/5760/regulatory_risk.html#ixzz3XwCTGrpw). Economic Risk: This risk associated with a country economic meltdown that affect foreign businesses for instance Middle East countries have faced severe up raising in the last 5 years with some economies almost creeping down, for example, Libya, Iraq, Syria and other Middle East nations. This risk affects foreign direct investments.Contrary to the above certain Middle East countries offers very attractive business models that attract global business investors. However, any investor entering Middle East should approach it cautiously and weigh all pertinent risk that might seem expensive at the outset and yet rewards can be more rewarding.

5.6 African Countries Africa as a continent now ranks second biggest popular continent in the whole world with a population ranging above 1.4 billion by 2015 and consist of 54 countries two territories not recognised. Africa has over 3000 native languages across the continent, and these being the case cultural norms are not the same in each of these countries but with a lot of similarities that exist amongst them. The table below shows the number of economic blocks and their sub- groupings and countries affiliations into the economic community.

African Economic CommunityPillar membershipSub- groupings

Community of Sahel Saharan States ( CEN-SAD)

Common Market for East and Southern Africa ( COMESA

East African Community ( EAC)

Economic Community of Central African States ( ECCAS/CEEAC)Economic and Monetary Community of Central Africa (CEMAC)

Economic Community of West Africa ( ECOWAS)West African Economic and Monetary Union (UEMOA)West African Monetary Zone (WAMZ)

Intergovernmental Authority of Development (IGAD)

Southern African Development Community ( SADAC)Southern African Customs Union (SACU)

Arab Maghreb Union( UMA)

The continent Africa is attracting interest from many prospective global investors not only from China and Europe. But from African alike, for example, there are many economic agreements between China and African business leaders with huge media publicity. In as much as Africa is not maniac to the international business predicament, in 2009 Africa remains elastic during the financial downturns that rock the world economies. In the past, this should end up with a serious negative growth of even up to 10 percent. According to (http://www.globalnegotiator.com /files/Africa-New Opportunities-for-Business-EIU.pdf). This attitude is based on inflation management across the continent which has remained very steady and with meager debts that are attributed to what was written off between 2006 and 2007. Nigeria, Angola Ghana in West Africa, for example, is oil reach economies that the nation will stand to dominate and now that Nigeria is the biggest economies in Africa surpassing South Africa in 2014. In the East of Africa; Uganda, Kenya and Tanzania is the fastest growing economies. With Uganda now joining the rank of oil producing countries, Kenya with no natural resources but East African business hub and Tanzania, with gold and now gas discoveries and reliable agricultural product. Ethiopia with very firm millennium goal and Rwanda stable policy framework has improved the outlook of East Africa being the fastest growing with steady inflation. According to (http://www.globalnegotiator.com /files/Africa-New Opportunities-for-Business-EIU.pdf), South Africa in Southern Africa is more visible in the global market.

Any slowdown might affect South African outlook given the upraising and high cost of labour. The growth rate has been under 2 percent and not steadily. Bordering South Africa is Zimbabwe and Swaziland with very unstable political systems that act as a repellent to foreign investment.5.6.1 African Growth DriversThere are a number of reasons that exist to pulled African growth. This is due to commodity prices, lower debt and the leverage of 2006-2007 write off, management of economic policies, capital inflows with the main growth drivers being: external demands for minerals and resources by China and India which both assumes high position is the global economies that allow process of commodities to be high and in turn benefits Africa. People movement into urban areas increasing the rate of consumption. With excellent markets, crowded prices escalate and firm competes to meet demand. Africa being rich with resources has seen huge demands from international global firms joining to invest in Africa, and this has increased (FDI) across the continent and as a result has increased commodity prices which completely change (GDP) growth domestic product and (PI) per capita income of many economies and lowering inflation rate. According to (http://www.globalnegotiator.com /files/Africa-New Opportunities-for-Business-EIU.pdf). China is the leading African investor with the trade value of over 10.3bn and with not string attached. And this alone has contributed to growth.5.6.2 Risk of investing in AfricaAccording to (http://www.globalnegotiator.com /files/Africa-New Opportunities-for-Business-EIU.pdf) the risks that permeate the continent are; frail economic policies, unstable currencies, taxi high, inflation high, inadequate infrastructures and corruptions. In as much as these are improving there remain challenges of business operation, for instance, corruptions, unstable policies, regulation that is poor, union unrest in the case of South Africa, poor infrastructures but now being improved across the continent. These make Africa according to the World Bank (WB) ranking lower but in the next 10- 15 years this outlook will have completely changed. However, the global strategist will weigh the cost of investing in Africa and consider all the risk factors and mitigate to invest and seemingly the benefits of investing in Africa by far surpass the risk.

5.7 North American CountriesNorth American is the third largest continent and composed of 23 countries and islands, with the largest economy in the globe, United States of America and Canada. North America is located in the north, and western hemisphere boarded by waters with a total population project 2015 totalling over 576 million. North American countries and island are dominated by the American and Canadian multinational investors. The regions other than few countries in North America are deep in poverty and mainly dependent on the other countries within the economic bloc.

Business leaders should be able to deal with differences in North Americas cultures and part of Latin American cultures. Given that most American conglomerates are investing in Latin America, which has become the American hub of investment because of the low labour cost of business operation. According to (William A. Naughton, 2003 retrieved from. http://interamerican understanding.freewebspace.com/busprac.htm), William A. Naughton eludes that the differences in the value of culture, business customs and social diversity is found throughout the region of North America. However, the degree at which business strategies deal with this difference is important.The free trade agreement (NAFTA) established in 1994 January being the biggest trade agreement has brought economic growth in North American region. The essence of the trade agreement has been to uplift living standards of North American people and also to boost procedures and rules of trade agreement in the region. The result of this has seen economies like Canada prospering because of trade liberation.

Measuring trade agreement by region imports and export from two member state has seen a tremendous growth of over US$ 288 billion in 2012 and over US$ 1trillion. These nations have double from 1994, with amagalameted (GDP) for United State of America and Canada, soaring to US$ 19.2 trillion as of 2012, according to (North American Free Trade Agreement (NAFTA). (n.d.). Retrieved from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/naft). Exports from Canada to United States of America have exponentially increased by 4.4 percent from 1993 to 2012 and more in recent years. A trade agreement between Canada and Mexico has seen growth in the upward movement of nearly 35 billion from 2012, and these increases are steadily rising at a rate of 76 percent.

According to (North American Free Trade Agreement (NAFTA). (n.d.). Retrieved from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/naft).United State of America (USA) and Canada cross-border trade in goods and services ranges in 2012 up to US$ 742 billion that and upward of 41percent and that makes Canada the biggest trade partner with USA with the highest (FDI) foreign direct investment. It is worth noting that trade agreement between this nation has increased trade between then with Canada and Mexico in 2012 trade raising over 6.8 times totalling over US$ 30.9 billion to 40.6 percent.

5.7.1 Investment and Integration

The North American Trade Agreement (NAFTA) brought stable investment condition and exacerbated attractiveness of this region and improved economic well-being of people in the region. USA stock alone in Canada was worth CA$ 326 billion in 2012 and have tripled in recent years. The trade agreement has contributed to Mexico competitiveness in the global markets despite all the negativity reason Mexico is known for. The total population of the three economies stands at 459 million people as of 2012. And more today is accounting for a quarter of the world. The coming together has diminished the blocs capabilities hence making the region more innovative and competitive according to (North American Free Trade Agreement. (n.d.). Retrieved from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/naft).

5.7.2 Challenges and Risk in North American RegionCorruption in Mexico is above board. Over the years, corruption in Mexico is amongst the state officials, local government and the issues of drug curtail has dealt a blow in business operations that can be seen all over news media. Mexican violence has affected even local indignant people and so foreign willing investors, foreign tourist as well as locals (Griffin, C. H. 2010). The legal frame is based on the civil law with the history far back to Napoleonic law according to (Garcia, C. & Martinez, Z. L. (2012). It is worth noting this fact; any person conducting business in these countries might come under Server legal scrutiny since this legal framework is affecting investments and businesses. While Canada and USA, have very low level of corruption with excellent infrastructures promoting investment.

6.1 Summary

Global competition has become apparent that to succeed in a global business; companies should not only understand potential customers, but also learn to compete effectively against other firms from many different countries adapting to ever changing technology, commoditization has pushed global companies to offer customised benefits to the markets and reinterpret model and strategies, company take the risk of being stuck in the quicksand and arent able to get out. Mass customization of products has revolutionised the way goods are bought and sold. And finally, customer expectations of online services have drastically changed as new technologies emerge, and customer needs evolve.

7.1 List of References

Africa: open for business the potential, challenges and risks a report from the EconomistIntelligence Unit. Retrieved from: http://www.globalnegotiator.com /files/Africa-New Opportunities-for-Business-EIU.pdfCouncil for Foreign relation (2012). Retrieved from http://www.youtube.com/ watch?v=EbvWcQdib04Doole Isobel and Lowe Robin (2000) International marketing Strategy: Analysis, Development and implementation (2nd Ed) London UK. International Thomson publishing Inc.Eric Markowitz (Dec 9, 2011) retrieved from. http://www.inc.com/articles / 201112/ doing-business-overseas-you-should-be-hedging.htmlGarcia, C., & Martinez, Z. L. (2012). A Comparison of the Business Environments of Two Emerging Economies American Journal of Economics and Business Administration, 4 (1), 59-64Griffin, C. H. (2010). The Role of Latin American Banks in the Regions Currency Crises. Review of Economic and Business Studies 3, (1), 55-71 Hill, (2007) International business: Competing in the global marketplace (5th Ed) New York NY: Irwin-McGraw-Hill Inc.Karl Heil retrieved from. http://www.referenceforbusiness.com/management/Str-Ti/ Strategy-in-the-Global-Environment.html#ixzz3XBuV98Js

Nail Ritson (2013) Managing Change: The theory of constraints in the mental health service.Strategic Change

Theodore Levitt (1983), the globalisation of marketsWilliam A. Naughton, (2003) Differing Styles and Business Practices in Inter-American Relations. Retrieved from. http://interamerican understanding.freewebspace.com/busprac.htmWorld Economic Forum: Arab World Competitiveness Report (2013).retrieved from:http://www.weforum.org/reports/arab-world-competitiveness-report-2013http://www.thegeminigeek.com/what-is-global-strategic-planninghttp://www.corporatecomplianceinsights.com/fcpa-risks-of-doing-business-in-middle-east/http://www.investorwords.com/3733/political_risk.html#ixzz3Xw4ygnxxhttp://www.investorwords.com/5760/regulatory_risk.html#ixzz3XwCTGrpwhttps://answers.yahoo.com/question/index?qid=20090503185705AAhtJk3http://www.ouboces.org/curric/?ray-ban=593.html)http://www.saylor.org/books