Course Code Course Name Section Code

BU1233 International Market Entry Strategies BU1233

Percentage Weight of
Semester Type of Evaluation
Total Evaluation
Winter 2020 Assignment #2
15%

Course Instructor Due Date

Tony Bejjani Week 10 (Wed.,March 18, 2020) at 11:00am Total Marks:/ 15

Student Name Student ID # Team #

Jagmeet Singh Lakhesar 201900237
Sunil Chahal 201806987
Ashu
Katyayni Chouhan
201900210
201900221
11
Shaganjeet Singh 201900717

Purus Wood Products: Developing a CompetitiveEdge

CASE STUDY QUESTIONS

Q:1 Develop a table of contents for the business case. What issues does it need to address?

Ans: Purus Wood Products (PWP) is a small but successful Brazilian company that produces lumber of
standard as well as grades types for their own country’s construction industry. Due to two year of continue
economic recession in Brazil, the construction industry has experienced a considerable decline in housing starts.

There are numbers of issues to be addressed by PWP. The following table contain issues which need to address.

ISSUES EXPLANATION

Adamant relation with trading Intransigence behavior of some trading partners irritated PWP because they are
partners looking to extend their business Eastern Asia especially in Korea.

Unique building standards in In Korea the layout of building is totally different. Lumber grades and dimensions
Korean were unique in Korea which is and not adaptable in PWP’s home market.

Highly competitive prices This is the one of biggest issues for PWP to compete in Korea because the prices
of lumber at Korea are markedly low as compare to the in Brazil’s market.

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Process is time consuming Introduction of new technologies is capable to accelerate the process of picking,
cutting and curing wood drying (kilns were available), due to this PWP might be
achieve competitive pricing in Korea. But the real problem was the timing of the
various steps in the process because wood spent too much time “sitting around”,
so redesign the process is also an another issue.
Funding Business was slowdown due to domestic recession it create a funding problem
.Pay to workers and for new technology costs much, even at that time reliable
bankers are not ready to provide sufficient funding to PWP.
Korean standards and cutting The two critical factors for the company first is cutting costs and second making
cost the wood to Korean standards. To make the pricing competitive in Korean
markets these factors play an important role.
Short window of opportunity The domestic recession would not last forever but the challenge that PWP had a
relatively short window of opportunity to develop the Korean.

Q:2 How can PWP develop the information to answer the questions in the business case?

Ans: PWP can develop the information by the subsequent ways in order to answer the question in the
business case . PWP confronted a few problems in the Korean market . To overcome these problems a
changes were made in the lumber industry . With the progression of the innovation new types of tools
were utilized for picking , cutting and carving the wood in different manner .

The first step is having another look at the Korean market . This case rely on two main factors : getting
ready wood to Korean benchmarks and reducing expenses to make the estimating serious in Korean
markets . With the another look they come to know about the market .

There was another obstacle faced by PWP . The VP of business advancement perceived that PWP had
a moderately short windows of opportunity to build up the Korean chance . Besides the selection of
new innovation additionally request cash and laborers . The procedure had been finished by receiving
the innovation in new manners .

The VP has gone to you for advice to building up his case . In particular , he needs you to set out the
sorts of inquiries that the case should address , just as certain thoughts regarding the system to be
utilized in creating answers to those questions .

Q:3 What are the key considerations regarding technology? How can these be resolved?

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Ans: Key considerations regarding technology –

*With the introduction of new technology in PWD all the machines getting automated due to which cutting and
curing of wood become easy. This might reduce the cost of the product but there are some problem which is
faced by manufacturers., the root problem is that it is the time consuming process. For the further processing of
wood first the wood needs to dry properly then it will send for the next process like cutting and all.

*Another barrier was of shipping that it is quite difficult to load and unload the goods.
*Need of more extra funds is another challenge to pay for new technology cost money
*With the usage of new technology firm has to train it's workers so that can be fit into new working processes .

Solutions which can PWD can adopt to resolve these problems are as follows-

*Redesign the manufacturing process.

*Establish good relationship with families and reliable banks .so that they will provide funds whenever needed.

*Redesign the shipping process

*Provide on the job training to workers and adequate salary so that workers will be satisfied and work more
effectively and efficiently nd their will be reduction in layoff also.

Q:4 what strategies are available to PWP to accelerate the process?

Ans: There are several strategies that will help to accelerate the process of PWP

1.Build a good Relationship with clients and industry

If the people don’t have trusted relationship with the decision maker of the industry, of course the process
of PWP is going to get stretched out. If the person across the table knows you, trusts you, and isn’t putting
the work out to bid through procurement. The best business developers are proactively building a broad
network within existing clients, and meeting regularly with workers, give ideas and share their views with
the other members of the organization.

2.Go higher in the organization

If the enterprise is entirely operated at middle management levels, it can get bogged down forever.
Mainly,it dependson the budgetary authority of the middle manager. If the employee has good relations
with organization or manager, there is a Red Issue they are grappling with, and they can make the buying

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 decision.But often, middle managers have limited budgets which are allocated by their management and
they tend to be risk averse. This means getting “everybody” on board before making a decision.

3.Know their decision process properly

The senior manager of the company know their decision process so that they can tell their workers in a
effective way . The workers should be loyaland value the senior manager skills. They have to follow the
same decision process so that begins to rise in the company’s profit.

4.Improve Your Benefits Case and Align it with Strategy

It’s a part of management to create a benefits or investment case.company PWP need to explore direct cost
savings or revenue increases, productivity improvements, operational efficiencies to open up the process.
Employees also kept in mind of indirect benefits like improved customer satisfaction or reduced time-to-
market. Apart from that, there are some direct benefits also , Improvements in decision making, reduced
risk, improved employee collaboration, etc.

5.Set the standards according to the local needs of the people

The PWP Company is a small firm which produce standard types of product like ply wood and particle
board. Company has to fixed the prices or lower the cost according to the local people so that everyone can
afford the material.

Q: 5- How can the venture befinanced?

Answer- Venture (Purus Wood Products) can be financed in the many ways which are as follows-

 Use of personal sources – The number one source of funding used by most small business

owners are self-financing in the form of personal and family savings.It's low-cost source of financing.

For example-

 credit cards/ Personal line of credit

 Home equity loan secured by your personal

 Cash-value life insurance

 Individual retirement account (IRA) funds

 “Friends and Family" Financing-

Family, relatives, friends and business associates are common sources to fund small business
development.

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  Retained earnings/ Internally Generated Funds-Another of the most valuable ways to fund expansion
is from the profits that the company generates and that is retained by company which is known as
retained earnings.
 Bank Loans - There are banks that lend money and provide a broad variety of ways that fund
development.

Instalment loans-In this type of loans monthly payments are to be made which contains principal amountand
interest.

Line-of-credit loans- Under this type of loan you can withdraw funds from the line of credit (A fixed sum of
money a bank or credit union has promised to offer you) when you need it, up to the maximum amount.
Butyou have to pay interest on the amount borrowed amount.

Secured and unsecured loans:

 Secured loan–
 requires collateral security,
 if the borrower didn’t repay the loan as they have agreed before then the lender can take possession of
the property.
 Rate of interest is mostly lower as compared to unsecured loan.
 Unsecured loan
 not protected by any collateral.
 If borrower default on the repayment of loan, the lender can't take your property automatically.
 SBIR Grants - Small Business Innovation Research (SBIR) funds aim at promoting small company
technological innovation. They let small businesses suggest research projects designed to meet the
R&D needs of the federal government. If accepted, grants of up to $75,000 can be given to the
research projects.
 Letter of credit - These are used by foreign merchants to ensure reimbursement to vendors in
certain nations. The contract substitutes the bank's credit with the businessman's up to a fixed sum
over a defined duration of time.
 SBA loans - SBA loans are small business loans which are insured by the SBA and provided by
participating borrowers, mainly through banks. SBA-backed loans have low interest rates and
favourable terms.

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 Angel Investors- An angel investor is a person who spends his or her own funds in a business venture.
Angel investors usually spend $10 K-$1 M, and anticipate a return of 20% to 25%.
 Venture capitalists- There's no better choice than a venture capitalist if you're already past the start-up
process, yet still need funds to expand. Venture capitalists (VCs) by their sheer existence will offer vast
amounts of income, expertise, and reputation.

Q:6- What are the risks involved in the venture and how can they be managed?

Ans: Risks involved in the venture and ways to manage that risk are as follows-

Uncertainty factors involved in every business – Every business organisations and companies working
in uncertain environment.No Business is a sure about its success, earnings. Everything is surrounded by
risks and uncertainty.

 Internal Risk Factors:

1. Human-factor Risk- Operational risk may occur due to personal issues. for example, if staff is not
properly trained, if staff becomes injured or ill, union strikes, workers layoff etc.
2. Technological Risk-Technological risk involves unexpected improvements in the production,
supply or sale of the product or service of a business.For example, PWD business adopt the new
technology in new ways. Every business has to make changes in its technology according to the
changing environment.
3. Risks related to finance- Financial risk is the risk that a firm will not be able to meet its debt
repayment obligations. Which in turn could mean that the money invested in the company will be
lost to potential investors. The more leverage a business has, the larger the future financial risk.
Business must have appropriate funds at right amount at right time. For example, PWD needs extra
funds for expansion of its business.

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  External Risk Factors:
1. Economic Risk-Economic risk includes changes in market conditions. which directly
affects the business.
2. Natural risk-Natural risk factors involve natural disasters which affect normal business
operations. Like earthquakes, flood etc which may cause a great loss to business.
3. Political Risk-Political risk consists of changes in the political environment or government
policy relating to financial matters. Changes to import and export rules, quotas, taxes and other
legislation will all have a detrimental impact on a company.For example, PWD firm is looking for
expanding its business at international level like in Korea. If Korea impose any type of restriction on
imports, or more which will further lead to direct impact on the company.

Ways to manage the risk:

 To maintain an adequate level of capitalso that when business need the funds then it must have
adequate funds at right time in right quantity.
 Proper training and adequate wages and salary must be given to workers and employees so that they are
satisfied with their job and can work in changing environment.
 Prepare for multiple outcomesbecause if circumstances change company can mould itself according to
change
 To face the technological risks company must have to spend on research and development so that
company can adopt itself according to environment.
 Company must takeinsurance to recover its financial losses when any uncertainty happens.
 Consistently review.A forward-thinking company understands the value of analysis.consistently
reviewing the business plan to ensure its working in current and future.

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References:

https://www.inc.com/resources/startup/articles/20050301/risk.html [ CITATION Lei20 \l 1033 ]

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 GROUP PEER EVALUATION FORM

Group Peer Evaluation Rubric Team Captain/Leader:  Jagmeet Singh Lakhesar

(to be completed by the team
captain/leader for each
assignment/project)

Criteria:

Mark Team Role fulfillment Communication Job proficiency

Always listens to, shares with, and
Participated in all group meetings, supports the efforts of others. Did more than others - highly
assumed leadership roles as Provided effective feedback to productive. Work is complete, well
4
necessary. Did the work that was other members. organized, with no errors and is
assigned by the group. Relays a great deal of information - done on time or early.
all relate to the topic.
Usually listens to, shares with, and Did their part of the work -
Participated In most group supports the efforts of others. cooperative. Work is generally
meetings. Provided leadership Provided some effective feedback complete, meets the requirements
3
when asked. Did most of the work to others. of the task, and is mostly done on
assigned by the group Relays some basic information time. Works well with others,
- most relates to the topic. rarely argues.
Participated in some group Often listens to, shares with, and Could have done more of the work
meetings. supports the efforts of others. - has difficulty, requires structure,
2 Provided some leadership. Did Provided little feedback to others. directions, and leadership. Work
some of the work assigned by the Relays very little information - tends to be disorderly, incomplete,
group. some relate to the topic. and not accurate and is usually late.
Rarely listens to, shares with, or Minimal work - Minimum
Participate in few or no group
supports the efforts of others. contribution, does not work well
meetings. Provided no leadership.
1 Provided no feedback to others. with others. Work is sloppy and
Did little or no work assigned by
Does not relay any information to incomplete, excessive errors and is
the group
teammates mostly late or not at all.
Did not do any work - does not
Did not listen, share with others or contribute, does not work well with
Little to no Participation. Did little
0 support the group. Provided no others. Work is sloppy and
or no work assigned by the group
feedback to others. incomplete, excessive errors and is
mostly late or not at all.

Evaluate group members (including yourself):

Team Role Total
Communication Job Proficiency
Name Fulfillment (Out of
(Out of 4) (Out of 4)
(Out of 4) 12)
4 4 4
Jagmeet Singh Lakhesar(201900237) 12
4 4 4
Sunil Chahal(201806987) 120
4 4 4
Ashu(201900210) 12
4 4 4
Katyayni Chouhan(201900221) 120

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 4 4 4
ShaganjeetSingh(201900717) 120

General Comments: All group members participate well on the assigned work.

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