Nombre: Víctor Manuel Huerta García Matrícula: 2897423

Nombre del curso: Nombre del profesor:

Doing Business in Europe and Asia Francela Elvetia Villarreal Umaña

Módulo: Actividad:

Módulo 1 Part 1
Fecha: 23/09/2021

Section 1. Read and learn! 

Go to your textbook and read Chapter  17 on Global Production, Outsourcing, and
Logistics. Jot down the most important ideas, and compose a report covering at
least these five points: 

a. Analyze and explain how production and efficient logistics impact

multinational businesses 
b. Explain how country differences and other variables can determine the
choice of where to locate production activities. 
c. Assess the know - how benefits for foreign suppliers.
d. Identify the relevant factors that influence a firm’s decision to
source either internally or externally.
e. Look into the requirements to efficiently coordinate remote outsourcing. 

RESULTS:

Analyze and explain how production and efficient logistics impact

multinational businesses

Production and efficient logistics positively impact multinational businesses. The

logistics start from the beginning of the supply chain, where you need to gather
the raw materials for your finished good. It is important to have these on time,
because if they are not available, then your production schedule gets put behind,
and you cannot deliver on time. Logistics and production are key elements for
multinational businesses. Once you have your finished good, you need to have a
good logistics strategy to get your product to your client on time and with the best
quality possible. These two elements are the backbone of the supply chain,
making or breaking a company.

Explain how country differences and other variables can determine the

choice of where to locate production activities.

There are many qualities that determine where a company will choose to allocate
their production activities. For example, it´s not the same to have a production
company in London than it is to have it in Mexico. Many things like wages,
politics, employee benefits, free trade agreements among other factors help
corporations determine where they will do their production activities. For the
most part, first world countries protect their workers more, making production
costs a lot higher than third world countries. In a third world country, the
government doesn´t offer high minimum wages or protection plans for their
employees, making it easy for a corporation to exploit their workers, and paying
very little to do so.

Assess the know - how benefits for foreign suppliers.

The know-how experience is highly beneficial for foreign suppliers. It´s not the
same to introduce a new technology in a country, than to introduce it and know
how to keep that technology from failing. The foreign suppliers can offer the
equipment with the condition that they supervise the process, and keep the flow
of experience limited to the host. Also, their knowledge is highly sought after,
making them able to negotiate their prices.

Identify the relevant factors that influence a firm’s decision to

source either internally or externally.
Factors to consider for outsourcing:

 Cost Savings

 Pricing

 The Resources and Technology

 The Ability to Meet Deadlines

 Minimal Supervision

 Limit the Liabilities

 Trustworthiness

 Who´ll Lead the Team

 The Service Level Agreement

 Communicate

Look into the requirements to efficiently coordinate remote outsourcing.

One of the requirements that I consider important to coordinate outsourcing, is

knowing which tasks are worth our time (the company´s time). It is not important
to micromanage small tasks, which would be the ones you would use the
outsourcing resources to do. Another important aspect would be to understand
all of the legal requirements, and understanding that no matter who handles the
information or the product, the company is the one responsible for anything that
might happen.

Section 2. Search for sourcing opportunities in Europe / Asia 

Europe or Asia? Choose one of this continental markets, based on your own
professional interests, and write an executive brief on its current business
environments. 

Then, do some research and select one relevant industry ripe for multinational

business (help yourself with Porter’s value chain concept for an industry
analysis http://is.gd/eBKTvS).

Include the current main sourcing countries in that continent for that industry, and
integrate all your findings in a diagram. 

Asia has a vast economic range in terms of its countries and its regions.
Although the continent contains one of the world´s most economically
developed countries, like Japan, it also contains some of the poorest. It´s
economic levels are distributed according to region. Most of the countries in
Southwestern Asia have what is categorized as middle-income countries,
northern, southern and central countries have a low-income category. The
countries that have a high-income category are located on the eastern part of
Asia.

The best location to start a business in Asia would be Hong Kong, China. This is
because they generally have a low-tax regime, and English is an official
language, making the language barrier a little easier to handle. Investors are
welcome here, and there is a high labor force quality.

I would start with a freight forwarding company, considering that most people
buy in bulk from China because of the low prices. Many people do not speak
Chinese, and being a Mexican freight forwarder, it would help fellow Mexican
businesses to start doing business there.

Main countries supplying Europe

 23 million small
businesses (SMEs)

Represent 99% of
the total number
Although 38% of
of companies.
Europeans say they
would like to be their
own boss

Provide 67% of Create 85% of new

employement jobs.

Deliverables (section 1 and 2):

1. A report with your analysis of the chapter, at least two pages long.

2. A one - page analysis of the current business environment currently
affecting that continent /industry.
3. A full diagram that includes the all value chain elements of your
analysis (add a final written explanation of your diagram).