INTB 2200 Study Guide - Summer 2018, Comprehensive Midterm Notes - International, Mexico, Iphone

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INTB 2200
MIDTERM EXAM
STUDY GUIDE
Fall 2018
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Larson in Nigeria
Wire and cable (infrastructure) developing country (e.g. Nigeria, Mexico, Venezuela)
will need it
Govt regulations problem for doing business
Nigerian lawyer who is minority joint venture partner
Visa for expatriate worker
Lacks much ambition
Unionization
Strain between local and expat
Cash flow problem (high inflationtakes too much time to get paid by the customer
which is govt… also there are capital transfer restrictions)
Lack skills (local workers)
Low salaries
Country is moving toward urbanization
Growth
Opportunities
Policies muddy also shifting
Corruption and bribery
High population
Growing GDP
Main problem: To be or not to be in Nigeria
Stay
Leave
- Future growth opportunity for our
business (developing country)
- GDP is increasing
- People need things and if they can
pay good
- Labour force is cheap and young
- Moving will need to reinvest in a
new country
- Moving will mean we will have to
make a sale of our assets fire sale
means we will get less than what
our assets are worth
- Spring board for Africa
- Know the Nigerian mkt
- Competition is low, if we leave
our competitor will fill the
demand
- Margins can go up to 20% ROI
- Already profitable with 10% ROI
- Govt regulation*primary problem
- Corruption and bribery
- Lack of infrastructure….
- Larson has to find new partner
- Cash flow problems and payment
is delayed, high inflation
- Visa
- Skill issues*secondary problem
- Barriers to international trade
- Expats don’t like to stay in Nigeria
- Interruption in utilities
- Low morale
- Capital controls
- Theft
Decision:
o Stay or leave in Nigeria? stay
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o fire or keep CEO, Ridley? fire, and send a candidate (who is number two in the
firm) from Venezuela who knows how to handle bribe because this decision have
to be made immediately, and the candidate is well familiar with the business.
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