STUDENT NAME: BENNETT ATUOBI AMOAFO

STUDENT NUMBER: ABS0422071

SUBJECT NAME: INTERNATIONAL BUSINESS

SUBJECT CODE: MBA 561

WORD COUNT: 2116

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Executive Summary

The research analysed the potential foreign business strategies of the Mohinani Group of

Companies. The authors begin with a synopsis of the company's history, and then examine

the numerous variables that have influenced its decision to expand internationally. Culture

(differences and variances between and within nations) is also discussed critically in the

study. It delves at how the firm's success on the global stage may improve through an

appreciation of cultural nuance. Strategies, methods of entering markets, and the various

forms of political risk and its avoidance discussed at length.

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Contents
Executive Summary...................................................................................................................2

1.0 Introduction..........................................................................................................................4

2.0 Internationalization Decision Factors..................................................................................4

3.0 Cultural Differences & Cultural Variations.........................................................................5

4.0 Internationalization Strategies for Unrelated Industries......................................................7

5.0 Market Entry Strategies........................................................................................................8

6.0 Our Internationalization Strategies Address 2 Political Risks.............................................9

7.0 Conclusion..........................................................................................................................10

Reference..................................................................................................................................11

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1.0 Introduction

The second generation of Indian Americans operate the industry-leading Mohinani Group. It

is a multi-billion-dollar business with over 3,000 employees working in a range of industries.

(www.mohinani.com). The group's activities in packaging and plastics, consumer durables

and tyres, chemicals and polymers, real estate and hospitality, as well as other industries, are

profitable in a number of African nations, including Ghana and Kenya, as well as in global

trading and service hubs like Hong Kong, London, and Mumbai. These nations and cities also

include hubs for global commerce and services like Dubai, Singapore, and Mumbai. Among

the company's clients are some of the biggest and most well-known firms in the world,

including Coca-Cola, Unilever, P&G, and LG Electronics. (www.mohinani.com)

2.0 Internationalization Decision Factors

Globalization and cross-border trade accelerated after the 1990s. Global business has

advanced due to environmental changes (Kaubab 2020). The following factors led to going

global:

The WTO and regional integration have influenced international expansion. Tariffs averaged

45% mid-century. Industrial product tariffs were 3.8% by 2000. (WTO 2002). The WTO was

founded in 1995 to cut tariffs and trade obstacles. Regional trade treaties have been used to

form other organisations like the European Union and the North American Free Trade

Agreement to lower tariffs and make international trade easier.

Technology has advanced tremendously since the 1980s. It revolutionises transportation, IT,

and telecom. Technological advances, spread by corporations worldwide, make cutting-edge

technology easier and faster to spread. Recent information technology advances have allowed

the multinational firm to become virtually international (Acs 2006).

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Several large corporations have set up shop in a developing nation because of the lowered

barriers to investment. To safeguard native industries, several governments have erected

barriers to overseas investment. In an effort to encourage global business growth, many

countries have begun dismantling these FDI restrictions. Between 1991 and 2000, successive

governments enacted a total of 1,121 modifications to FDI regulations. Close to 95% of the

adjustments were positive for FDI. From 1980 to 2000, the number of treaties signed by pairs

of countries increased from 181 to 1,856. This increase encompassed 160 different countries.

These agreements were designed to promote and safeguard foreign investment, which

accelerated not only the globalisation of trade but also of industry.

The growth of the global economy has been influenced by emerging markets as well as

international firms with headquarters there. Since emerging nations provide low-cost

platforms for producing goods and securing services like those provided by IT and contact

centres, multinational firms have long relied on them to boost trade and investments.

MNCs continue to view emerging countries as crucial for growing their product portfolios

and client bases. According to experts, about 300 million more homes joined the consumer

class in the last ten years (Parboteeah, Cullen 2018). Emerging markets will continue to hold

enormous potential as more people move into the middle class. The existence of developing

marketplaces in rural areas is one of many appealing features of these markets. Demand has

increased significantly in rural markets while remaining modest in urban markets in more

developed economies. For example, forecasts indicate that by 2025, India's consumer

products market will increase from its current $12 billion to $100 billion (Kapur et al).

Therefore, multinational firms need to benefit from the rising brand recognition among rural

consumers as soon as possible.

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3.0 Cultural Differences & Cultural Variations

There is no way around the fact that differences in cultures have an effect on the approaches

and points of view that are utilised in international company management (Alvesson, 2002).

It has been demonstrated that cultural systems at the national level, as well as individual

cultures, have a substantial impact on the cultural system of corporations in a variety of

different ways (Tayeb 1995; Krober 1985). There are many aspects of management that are

influenced by national culture, including decision-making, leadership, and the management

of human resources. Other managerial responsibilities, such as communication, motivation,

organisational design, people's expectations of the workplace, and reward systems, are also

influenced by the cultures of the countries in which they are carried out. It is essential to

recognise that a variety of national institutions, such as labour laws, educational and

vocational training systems, and industrial norms and regulations, all have an effect on the

business strategies that companies implement (e.g., human resource policies). At its core,

culture can be understood as the process of conceptually organising values into programmes,

while organisational behaviour can be understood as the manifestation of these programmes

in actual actions.

The Mohinani Group's success depends on its ability to comprehend both the cultural

variations inside and between nations. One is not more important than the other.

It has been noted that it can be difficult to be in a situation where you must anticipate and

recognise cultural quirks in global business protocol and make adjustments as necessary. Any

successful global company must anticipate, recognise, and adjust to cultural differences in

global business etiquette, according to Carte and Fox (2008). Cultural sensitivity, as well as

the readiness and support to adapt to different behaviours, are necessary for successfully

hosting businesspeople from other countries.

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Therefore, it is vital to become familiar with the business customs of the various countries if

one wishes to engage in fruitful commercial interactions with individuals and companies

headquartered in those nations. It is important to note that the activities that we participate in

within the industries in which we operate are vulnerable to large amounts of influence from a

variety of aspects of culture. The Board of Directors of the company needs to be familiar with

the cultures of the many different industries in which the company operates as well as the

cultures of the personnel of the company, in addition to being well-versed in Ghanaian

culture. In addition to this, the Board of Directors also needs to be familiar with Ghanaian

culture. The beliefs, customs, and practises of a society are said to be its culture if the

majority of its members hold these things in common and generally concur with them.

Culture can be found in every given civilisation (Hill 2012). People's identities, as well as the

sorts of behaviours that are and are not tolerated in the culture in which they live, are shaped

by the culture in which they were raised. As a consequence of this, things become more

predictable, and because of this, it is ensured that people's behaviours are not entirely

arbitrary as a result of the predictability.

4.0 Internationalization Strategies for Unrelated Industries

To put it simply, a strategy is the course of action performed by management with the end

goal of achieving the firm's goals. The maximisation of shareholder value is the major focus

of most firms. Companies should prioritise increasing both their current profitability and their

pace of profit growth if they want to maximise shareholder value. As the world has become

increasingly interconnected over the past few decades, smaller businesses have had greater

opportunities to expand internationally. Companies with a global presence typically aim to

maximise profit margins by standardising their product lines over the world to take advantage

of economies of scale. To meet the unique demands of their local customers is an additional

goal of locally responsive businesses. These strategic paths appear to be incompatible with

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one another. The Mohinani Group of Companies will use a hybrid approach, focusing on both

domestic and global markets. It plans to implement a localization strategy in the plastics and

packaging sector, as well as the real estate and hotel sectors.

A localization strategy aims to boost a business's bottom line by tailoring its goods and

services to the distinct requirements of other nations or areas. Localization is the best course

of action when there are significant variances in consumer preferences between nations or

regions and when budgetary constraints are not too severe. By meeting distinct area demands,

the business adds value to its local product offering. We must maximise efficiency and

leverage economies of scale whenever possible if we are to benefit from localisation. We will

need to be well-versed in the nation's national and larger cultural standards in order to

successfully implement this plan and suit the needs of the local populace.

We will put into practise an internationalisation plan for the rest of our inventory, particularly

at the retail (trading) company of the group Somotex. Consumer electronics from brands like

Samsung, LG, Bosch, and others are sold in this segment. An example of an international

strategy would be to produce products initially for the domestic market before exporting them

and making minor tweaks for each local market. These companies stand out because they

offer a widely appealing good with little competition, shielding them from the same pressures

to lower costs as their global standardization-seeking peers.

5.0 Market Entry Strategies

One of the most common strategies for breaking into a new market will be the creation of

wholly owned subsidiaries. We'll investigate whether it's better to start from scratch or buy an

established company. There are a number of obvious benefits to having a wholly owned

subsidiary. To begin, a wholly owned subsidiary is often the ideal entry strategy when a

company's competitive advantage is founded on technological competence. This is because

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there is less of a chance of losing control over that ability. We will prioritise this route to

market for the global expansion of our Chemicals and Polymers business because it is the

preferred strategy of many successful technology start-ups (e.g., firms in the semiconductor,

electronics, and pharmaceutical industries). Second, as a 100% owner of the subsidiary,

Mohinani will have full say over the overseas business. In order to take part in international

efforts to coordinate strategy, this is required (i.e., using profits from one country to support

competitive attacks in another). Third, in order to take advantage of location and experience

curve efficiencies, we will need a wholly owned subsidiary. In the face of severe price

competition, it may be prudent for a company to organise its value chain in such a way that

the value added at each stage is maximised. This means that a national subsidiary may

produce only a fraction of the product line or certain elements of the finished product,

exchanging components and goods with other subsidiaries via the global network of the

corporation. When operating on such a worldwide scale, it is essential to exert tight

supervision over all subsidiary operations. All of the individual businesses involved need to

be amenable to decisions made at the top level about how much and how they will produce

and how much it will cost to transmit their output to the next business. Since licensees or

joint venture partners are unlikely to consent to such a low-level function, wholly owned

subsidiaries may be required. If the company establishes itself as a wholly owned subsidiary,

it will be entitled to one hundred percent of the earnings generated in the foreign market.

6.0 Our Internationalization Strategies Address 2 Political Risks

Political risk is the threat that the returns on an investment will suffer because of political

upheaval or instability in a nation. Our objectives for internationalisation are related to

potential ownership and operational political considerations. Expropriation, seizure, or

"domestication" of the company by the government of the host nation are dangers to

ownership, whereas interference with the regular operations of the company is a risk to

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operations. Businesses are at risk from changes in rules, such as those governing the

environment, terrorism, etc.

Any effective business strategy in a growing market must be built on the foundations of due

diligence, continual research, and political risk assessments. The majority of developing

markets will contact experts. To spread the risk, our international portfolio may be diversified

among a number of emerging markets. We can create a clear and up-to-date strategy to lower

political risk by analysing the "what ifs" that the market raises. Create a response strategy for

a variety of potential threats. We will include significant outside partners to further lower

political risk. We will tell our customers, suppliers, and representatives about our

preparations for handling political risk, and if necessary, engage with us to set up a response.

7.0 Conclusion

The global economy has undergone a major transformation over the last four decades.

National economies used to be largely self-contained entities, separated from one another by

hurdles to cross-border commerce and investment, distance, time zones, and language, and

national distinctions in government regulation, culture, and business systems. We're getting

closer to a world where cross-border trade and investment barriers are falling, perceived

distance is shrinking due to advances in transportation and telecommunications technology,

material culture is becoming more similar around the world, and national economies are

merging into an interdependent, integrated global economy.

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