Question

The Andrews company is considering international expansion. You have been asked to offer input on the location of the new business. In the elimination process, please identify two countries in the world where the Andrews company should NOT build a plant. Please provide your reasoning for your selection. A strong response will demonstrate the student’s global awareness and how the country’s social/business/political climate negatively impacts your recommendation.

Answer 1

In this example, we would focus on political risk and cultural mismatch to eliminate countries where the company should expand.

So keeping the above criteria in mind, we should not recommend Andrews to invest in Syria and Russia. This is primarily because in Syria, we have political turbulence and a civil war kind of situation. Also culturally, it is very different from the USA and hence expanding into such a country does not make sense.

With regards to Russia also, there is substantial political risk with regards to American enterprises being present there. Moreover a large number of businesses and industries are managed by oligarch or are government controlled. Thus chances of free enterprise thriving in such situation is also remote.