This is a report to the CEO of Physical Movement Company that identifies three countries: Hong Kong, Canada and Pakistan. These countries would be ideal to provide mobility products in. The paper then studies the costs and opportunities of trading with these countries. On the basis of these, an analysis is made for them to be labeled as ‘target countries’.
The countries that are chosen are chosen after studying the costs and benefits of supplying goods in it. My criteria, as the Vice President of International Sales, were a number of factors concerning the markets and economies of these countries including the life expectancy, other demographic trends, time zone differences, cultural differences, demand for mobility products and many more. I will discuss the prospects (and costs) of each country one by one.
- Hong Kong
Hong Kong is an Asian country located in Eastern Asia, bordering South China and China. (The World Factbook, 2008). It will be beneficial to provide mobility products in this country because first of all, the life expectancy at birth is 81.77 years. Also, 13% of the total population is 65 years or more. This implies that health care is needed and is already availed by the people in this country. Such a high expectancy along with the age structure of the country indicates the use of products such as wheelchairs or walkers etc. In addition to that, even though Hong Kong is an Asian country, it is highly westernized now which rubs off the huge difference in culture.
Apart from that, the economy of Hong Kong almost makes it ideal to globalize in. It has a free market economy and it relies heavily on international trade. The volume of imports was $371.3 billion in 2007, which was even higher than their exports (The World Factbook, 2008). This number shows their propensity to import. Thus, the scope of international markets is many markets. Moreover, US are one of its leading import partners. All these combined together illustrate the high probability of Hong Kong companies importing mobility products from the US. Communication is also easy in Hong Kong. There are many internet and telephone users, all contributing to easy communication. Lastly, there are no transnational issues in Hong Kong that could cause any sort of trade problems, legal or political, between the two countries. It won’t be significantly different selling in Hong Kong because their ethical business behavior is of high standards.
The biggest disadvantage of selling in Hong Kong is the time difference between the United States and itself. There is a difference of 12 hours (or more) that makes it difficult to work at the same time (Time&Date, 2008). When it is night time in Hong Kong, it is day time in the US. Also, a relatively small number of people speak English, which could cause communication problems. Chinese and English both are the official languages but only 3.2% of the people speak English.
Canada is an ideal choice for the US to generally trade with because firstly, it borders the United States on the South (The World Factbook, 2008). Transportation of medical goods such as wheelchairs is made easier by a shorter distance. Secondly, the time difference isn’t as substantially monumental as that with most of the other countries. Both countries use the Central Time Zone (with Canada using five others also).
Moreover, 14.9% of the population is of 65 years or more. This is a relatively large number. There must be many others who are handicapped and are virtually incapable of ambulating themselves. The point is that the demand must be comparatively more in such an area with such an age structure. Furthermore, the life expectancy at birth is 81.16 years. This implies that health care and medical facilities are availed by Canadians. If it is availed and if it is something they make use of, it makes sense to provide it to them. Both countries also work closely together to build up security measures to monitor and manage legal and illegal supplies across the international border (the World Factbook, 2008).
The language spoken in Canada is English. The communication services are excellent with over 22 million internet users and telephone services of the highest standard. All these make communication easier between the two countries too. There are hardly any cultural differences between both the countries. Both countries have holidays at the same time. The ethical business behaviors are very similar also. The religions are also almost similar.
According to the facts, the US and Canadian markets and economies are quite similar. If the PM products are doing well in the US, they are highly likely to do well in Canada too. Besides, the general volume of imports in Canada is substantial. It was $394.4 billion in 2007 (The World Factbook, 2008). The better thing to note is that it imports products of a similar nature such as machinery, equipment etc (The World Factbook, 2008).
The similarities in the market and economies of both the countries may lead us to argue that Canada is perfectly capable of producing mobility products itself, if it is so much like the US. Thus, the strength of competition is tough. Because life expectancy is so high and medical/healthcare facilities are available, there is a chance that the need for mobility products from other countries may be low. Also, Canada has some transnational issues concerning the US. It has handled nautical boundary disputes with the US. These occurred at Dixon Entrance, Beaufort Sea, Strait of Juan de Fuca, and around the disputed Machias Seal Island and North Rock (The World Factbook, 2008).
There are several problems of supplying goods in an impoverished and underdeveloped country like Pakistan. It is nothing like the two countries mentioned above; life expectancy is low, purchasing power is also comparatively and generally low, there are time zone differences, etc. However, all these factors put Pakistan in a greater need for mobility products. Health care and medical facilities are needed. The life expectancy at birth in Pakistan is 64.13 years. These points toward the requirement for health care facilities. Obviously, Pakistan is not able to provide them itself because of which the life expectancy is low and the rate of handicapped is so high. Therefore, it needs to buy these from the foreign market. What better country to import from but the US? The US is a leading import partner for Pakistan and thus, the US market is dominant.
Communication is also easier in Pakistan. English is the official language and many people in the business speak it. Apart from that, the telecommunication and internet facilities are improving dramatically, opening up more opportunities. Transportation facilities of relatively higher standards also exist in Pakistan.
The strength of competition is weak in Pakistan which makes it the perfect candidate to globalize in. In addition to that, the willingness of consumers to pay for differentiated products is also low, which also increases the reasons of globalization.
One of the biggest problems of trying to globalize in an underdeveloped country like Pakistan is that the purchasing power is very low and is highly inconsistent. Also, people in Pakistan who are generally old and handicapped are those that belong to the lower income group. It seems almost impossible for them to buy imported goods and that too, goods which in their opinion will help them “move”. Therefore, mobility products come way lower in the priority list.
Moreover, the time zone difference is big. The standard time zone in Pakistan is UTC/GMT +5 hours while the US time zone is UTC/GMT -5 hours. Finally, even though Pakistan is on way to becoming very westernized, there is still a significant difference in both cultures and religions. People do business in Pakistan differently than in the US. It will be very different selling in a country like Pakistan. (Time&Date, 2008)
- The World Factbook (2008). The World Factbook. Retrieved June 1, 2008 from Central Intelligence Agency. Website: https://www.cia.gov/library/publications/the-world-factbook/
- Time&Date (2008). The World Clock- Time Zones. Retrieved from June 1, 2008 from timeanddate.com Website: http://www.timeanddate.com/worldclock/
- Sylvester O. Monye. (1997). The International Business Blueprint. Blackwell Publishing.