Unit 6 Assignment

Economic Risk and Foreign Investment MT220 - Global Business Jonathan Robinson
When moving forward in an acquisition, it is important to consider all factors. Some of these factors include political, economic, legal and challenges in a new market would affect the company and its acquisition. With Singapore as a potential landing zone for this company, it would be wise to weigh the pros and cons in obtaining this distributor. Singapore is a prime country and would greatly benefit this company with a local distribution center. The political climate in Singapore has been incredibly stable for a number of years. This stability has led to augmented business solutions and growth in key areas. With the stability the government has, it offers few if any real risks associated with doing business in the nation. A minor risk that I have found is the system of regional Mayors and implementation of town councils. These two entities can cause headaches and "hoops" that would have to be jumped through in order to appease local governments. This could turn out to be more of a worry than actual problems but the risk is still present. Economically, Singapore has been rapidly growing over the past decades. This growth has allowed Singapore to invest heavily in infrastructure and manufacturing along with other areas as well. This diverse economy is perfect for any business or corporation as it provides stability and continues to draw in new companies to fuel its growth. With COVID-19, the economic growth has halted and continues to be impacted by the lack of tourist and trade on the global scale. In order to combat the spread of the pandemic, the government placed a travel restriction. These two factors, although temporary, are risks that need to be looked at and addressed before we commit to any purchase. With Singapore's current governing body, the nation has taken a harsh stance on organized crime, terrorism and bribery. This stance has halted the majority of organized crime and made it safer for individuals, families, and businesses alike. Singapore does have strict
intellectual property laws, they adopted a "first-to-file" system that makes the first person to file an IP right the person to own it. This can be problematic when instituting new changes to manufacturing or technology as we may have competition seeking to file first then turn around and sell us the rights to the information. The second risk is the fact that this offer is below fair market value and the government may view this as a type of inside trading or bribe between owners. With the country having a free port and access to international trading, I believe this is a prime location for an acquisition. The current market is viable and thriving in the goods sector. With a diverse economy and access to an international port, this acquisition would be a vital piece in assuring out ability to reach our customers throughout the globe. With the stability and opportunities that Singapore offers, I believe not doing this transaction would be a huge detriment to the company.
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