Legal-political environment do strategic decision-makers need to examine

A) What aspects of the legal-political environment do strategic decision-makers need to examine?

Mention below are the Legal-political Environment is comprised of several factors that strategic decision makers need to address:

·         Managerial traits: unanswered questions

·         Involvement of the country in rules based, member driven organization such as WTO.

·         International reputation of the country.

·         Bureaucratic structure that supervises business and economic issues.

·         The level of political morality.

·         Economic stability and taxation systems:

Specific legal enactments and framework in which the enterprise has to function and the degree of effectiveness with which they are implemented.

·         Availability of political unions and labor organizations and their power.

·         Business environment Laws and policies of the nation.

·         Economic development practices of the ruling political party.

·         Public acceptance towards business in general and the enterprise in particular

B) What economic issues might affect your company's international strategy?

Several economic issues that might affect the company's international strategy. Various economic factors need to be known in order to formulate the company's international strategy. India's GDP is growing at 9% per annum. It is the second fastest economy in the world. According to Goldman Sachs, Indian economy is set to overtake that of Western Europe by 2030 and by 2050 it is set to overtake the US economy to become the second largest economy in the world, (next only to China). In terms of Purchasing Power Parity (PPP) India is already the third largest economy in the world. The Forex reserves of India currently stand at US$ 230 billion. In March 1991 when India was in the throes of its financial crisis it stood at merely US$ 5.8 billion. The economical factor of India in context of Investment and trade changed dramatically from 1991 when Government announced its new industrial policy, basically de-licensing industry and introducing fiscal and regulatory reforms. The top sectors attracting highest FDI are telecommunications, services (financial and non-financial), transportation industry, fuels, chemicals, food processing, electrical equipment's, drugs and pharmaceuticals.

The broad approach of the Government is to treat imports and exports under three categories - items which are prohibited, items which are restricted and items which can be feely imported. Items which can be freely imported or exported do not need any Government license. Items which are restricted require a license. As per India's WTO commitment, only a small number of items fall in the category of prohibited / restricted goods and these restrictions are usually on the ground of national security, health and environment, protection of small scale or tiny enterprises etc. Certain items are declared to be canalized i.e. only a designated public sector undertaking may import or export it.

C) Discuss why it is important to understand the national culture of this country.

Culture is the complex whole. It includes customs and tradition, values and beliefs, language, and symbols. It is created by society. Attitudes, values and beliefs, language, and religion are the cultural factors which can affect the business environment. Culture crates attitudes towards works, leisure and business. It influences the values and beliefs of business.

Maldives Island appear in-between the trading route of the Indian Ocean. Such is the to-and-fro flow of people and their cultures that a marked effect has been left in the Maldivian people, the language, beliefs, arts, and attitudes. The language, Dhivehi, differs in dialect in some regions in the south of Maldives, possibly due to the secluded nature and subsistent ways of island life. Maldivian beliefs have been very much based around religion and superstition, often used together in matters of significance but given separate positions in society. In matters of faith, Islam dominates, but influence of the supernatural still continues to play a major role in most island communities, possibly giving credit to the folklores and Buddhist traditions of the islands' first settlers before conversion to Islam in 1153 AD.

Maldives has a high literacy rate (over 98 per cent). Student enrolment in educational institutions is also high, and continues to increase. Schooling is free and the costs involved in sending children to school are relatively low. Culture is, basically, a set of shared values that a group of people holds. Such values affect how you think and act and, more importantly, the kind of criteria by which you judge others. Cultural meanings render some behaviors as normal and right and others strange or wrong. Every aspect of global communication is influenced by cultural differences.

D) Describe your planned entrance strategy into this new market.

Entry strategy for international markets is a comprehensive plan, which sets forth the objectives, goals, resources, and policies that will guide a company's international business operations over a future period long enough to achieve sustainable growth in world markets. Before formulating the entrance strategy into this new market, there are four major factors that need to be focused. They are Market assessment, Business case development, Implementation roadmap, and Go live.

There are various entry strategies that can be used to enter the foreign market. They are exporting, importing, licensing, franchising, global sourcing, and foreign subsidiary (Coulter, 2013).

The planned entrance strategy into this new market as a technology group is to have a foreign subsidiary. In foreign subsidiary, direct investment is made in the foreign country with a separate and independent facility or office. It involves the greatest commitment of resources and poses the greatest amount of risk. In other words, open a foreign company's branch office. In India, foreign companies are allowed to open branch for rendering services in Information Technology and development of software in India. Branch Offices established with the approval of Reserve Bank of India may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

 In order to operate business successfully in this Asian nation, it is essential to properly understand the political, legal, economical and cultural values of the country as it has emerging economy. Proper analysis leads to formulate effective strategy. This market can be entered with foreign subsidiary as entrance strategy.