International Business Strategy

International Business Strategy

Introduction

Upgrading the Czech Republic's infrastructure, specifically telecommunications and transportation, is important for continued economic growth and development. Although recognized as a priority, the massive nature of these projects will require time and capital.

Infrastructure and Logistics for the Glassware Business

The Czech Republic has a comprehensive road network allowing connections to the rest of the EU member countries. Road freight cabotage is the most commonly used transportation method for industries and connects bordering cities and towns within the framework of the country. (see appendix I) The Czech Republic can be accessed by road from any country in the EU.

This method would suite a Cracked glassware manufacturer that is moving larger volumes of goods into the foreign market. This form of entry will require capital investment to ensure distribution and storage of goods are well maintained, outlets will also be required by the Cracked glassware manufacturer to retail the goods produced. Cultural and language differences between the host and home nation and the employment of local managers and sales teams need to be considered to ensure effective communications and corporate aims are met. Direct exporting will impact the Cracked glassware manufacturer and logistics need to be taken into account regarding distribution. Administration and documentation issues will also need to be considered; this will require a dedicated department to deal with international issues (Gornstein 2006 25). It may also improve logistics and create further business opportunities within other potential EU members.

The effective use of available EU funds gives the country the opportunity to strengthen output growth. According to the latest data available, domestic demand will drive economic expansion, as net trade will provide less of a stimulus to growth owing to slower import demand in the euro zone. The Economist Intelligence Unit forecasts that the current-account deficit will remain at about 3% of GDP as a result of solid domestic demand. The structure of the investment strategy is focused on attracting technologically (Treacy Wiersema 2007 47). The Czech Republic was the world's 20th largest recipient of FDI in 2005 and attracted $11bn, in comparisson to $5bn in 2004.

The Czech economy has traditionally been a cash economy, although credit card use has grown as bank regulations for issuing credit cards have been relaxed. Four years ago, credit card purchases by Czech consumers were rare. Presently, virtually all professionals in major cities have at least one.

Firms selling high-value consumer goods may wish to consider investing in a well-positioned retail outlet in Prague that can then be used as the main point of sale for this market, it will also provide a base for after sales support and administration.

Weaknesses within the International Market

Distance to market, limited production orientated/design, distribution costs, pricing considerations, Orientation towards Czech market, foreign language skills and material resources.

Growth and Production Capacity

Production needs to be considered by this Cracked glassware manufacturer. The main risk being that supply may not be able to meet demand. Growth forecasts and projections should be used to unsure the Cracked glassware manufacturer has ...