INTERNATIONAL BUSINESS (IB) -ASSIGNMENT ROADMAP AND CASE STUDY ANALYSIS ANSWERS

Assignment Roadmap

No. of Words: 5000
Module: International Business (IB)
Topic: Investigating Nedbank’s internationalisation into Egypt
 
Executive Summary (~ 500 words)
Write this up last – once you have completed your full assignment.
Provide a concise summary of:

• Introduction (business intro, context)
• Key issue (why the business is considering internationalisation)
• Brief discussion of analytical approach taken (what did you analyse and how)
• Key insights from the four levels of analysis (i.e. macro, market, competitors, internal)
• Options derived in terms of internationalisation (“where” and “how”)
• Summary of final decision/recommendation, including both the “where” and “how”
• Summary of the key implications and next steps

Typically, each bullet point above will translate into a paragraph in your executive summary, bar the analysis point, which may require more.
Extra – Have a read through this article, which discusses the executive summary in more depth:
https://grad.coach/how-to-write-an-executive-summary/
 
Chapter 1: Introduction (750 – 900 words)
You will need to cover the following:

• Provide a brief introduction to Nedbank’s operations – what does it do (in layman’s terms), where does it operate, how long has it been in business, who is its customers, what are its business objectives and basic strategy (i.e. its plan to achieve its objectives).
• Explain any relevant terminology and/or jargon regarding the product offering.
• Explain the context, which leads to the opportunity and justifies the focus of the assignment: o what context has led Nedbank to want to consider internationalisation (or further internationalisation)?
• There are various push and pull factors that might drive a firm to consider going abroad – for example, an increasingly competitive local landscape, local economic uncertainty or decline, etc. Consider some of the “push and pull” factors as per the IB theory and make a clear argument as to why Nedbank would entertain going abroad as opposed to just focusing their efforts on gaining more market share at home (SA). I have included the relevant “push and pull factors” model on the next page for your easy reference.

Which market/s (country/ies) is it interested in and why?
Explain why Country X, in particular, is on the shortlist (or if you choose to analyse two markets, why they are both on the shortlist).
You don’t need to go into much detail here, but there’s needs to be some brief explanation as to why you’d consider venturing into this country.

• Simply put, this section is about providing a justification for the investigation. Make it clear why this topic is important to the business (i.e. what is its logic for internationalisation?) and why you’re assessing Country X specifically.
• Present the research questions (RQs), namely: o RQ1: Should Nedbank consider internationalisation into Country X (and/or another country)?

RQ2: If so, which entry mode would be most appropriate?

• Outline your theoretical approach to the analysis – a brief overview of what models and frameworks you used, in what order (we’ll cover this in the next section). Do this right at the end of the writing process.
• Briefly discuss your approach to the fieldwork – what information sources did you use? For example, informal interviews, industry reports, company-provided data, etc.
• Mention your relationship to the organisation (if you haven’t already) and how you’re involved in this specific challenge, if at all.

Below: the push and pull factors for internationalisation (for discussion in your context section)

Extra – You might find the following post useful for guidance on how to write a strong introduction chapter:
https://grad.coach/introduction-essentials/
 
Chapter 2: Analysis (2000 – 2400 words):
The analysis chapter can be approached using Collinson et al’s (2017) “international business environment” model (see below) as a guiding structure, flowing from right to left.

In other words, your analysis should cover four main areas:

1. Macro-level / institution-based analysis (CSAs) – is Country X itself attractive in terms of the institutional environment it offers to businesses? E.g. laws, ease of business, etc.
2. Meso-level (industry):

(a)   Market analysis – is there an attractive local market in Country X that will be interested in your offering (market size and receptiveness)?
(b)   Competitor analysis – how competitive is the local playing field and is there a gap that you can fill (an opportunity to differentiate yourself)?

3. Internal-level analysis (FSAs) – do you have the resources and capabilities to overcome the liability of foreignness (LoF) that you will face? Can you provide a differentiated offering?

In terms of order, it’s always best to have your analysis flow from macro to meso to micro (internal), so I suggest ordering your analysis as presented above.
 
2.1 – Macro-level / institution-based analysis (CSAs)
This section will look at the “big picture” of Country X to assess the general attractiveness of doing business there and how big a leap this is from doing business in your home country (i.e. your liability of foreignness). In other words, the key questions here are:

1. How attractive is the institutional environment?
2. What are the key risks, challenges and contributors to liability of foreignness (LoF)?

Keep in mind that the focus at this stage is on Country X as a country itself, not the customer market or competitive environment within that country (these will come in the next section). However, you should still be making links between these levels, as the macro typically impacts the meso. Moreover, given that your internal analysis only takes place later, your macro-level analysis should be taking a generic perspective, not a firm-specific perspective. In other words, how appealing if the institutional environment for any new entrant or competitor in your industry?
The PESTLE framework works well here to investigate the macro aspects of the host country. Don’t bother trying to fit it in a table – rather discuss in body copy. It is also prudent to integrate/blend PESTLE with Ghemawat’s CAGE framework to enrich the analysis and draw comparisons between home and host country. There is a lot of overlap between these two models, so they integrate well together – see table below which highlights the overlaps.

have sourced a few macro-level country reports for Egypt and Algeria. Quality reports for Sudan were impossible to come by, so I’d suggest focusing on Egypt and/or Algeria, unless you have macro-level data for Sudan.
You can also do some Googles searches for “Country X PESTLE”, “Country X country report”, etc. Make sure you search for recent reports (late 2019/ early 2020), as this information needs to be fresh. I can assist if you have trouble finding these reports (the ARC is not very user-friendly) – let me know.
For economic data, you can use World Bank, World Economic Forum and CIA Factbook data (all easy to find on Google) to source this info. All of this is freely available online – just search on Google. See, for example:

• https://tradingeconomics.com/egypt/indicators
• https://data.worldbank.org/country/egypt-arab-rep

You can also use the CAGE comparator (https://ghemawat.com/cage) to get a CAGE comparison between the countries.
I’ve included some thought-starters for your PESTLE/CAGE analysis below. You don’t need to cover every point – just focus on that which is most relevant to the overall research questions.
 
Political & legal:

• Extent and efficiency of government bureaucracy – how easy is it to set up a business in the country? See http://www.doingbusiness.org/rankings
• Taxation laws – how attractive is the tax system? Are there any incentives for foreign investors in your industry? Consider both corporate and income tax, as the latter impacts the cost of labour.
• Foreign ownership laws – are foreign persons or entities allowed to own companies? What restrictions exist? Are there any exemptions?
• Profit repatriation – are companies allowed to repatriate profits to their home countries? What limits and complexities exist.
• Regulation – how regulated is the industry at hand? Is this regulation attractive or are you ill-equipped to work with it?
• Labour laws – how attractive are the labour laws for employers? Do they allow for easy import of foreign talent (this will likely be important when starting up)?
• Law and enforcement – Is the legal system based on common law? How effective is it? Is intellectual property protected?
• Corruption – see data at https://www.transparency.org/country

 
Economic:

• Look at some basic top-level country economic information for Country X over a 3-5-year period, including population, GDP, GDP growth, FDI, GDP per capita, etc. What does this tell you about the general state of business?
• Consider economic integrations/unions and the impact that this has on country attractiveness.
• Then, give some thought to the economic factors that impact your running a business in Country X, for example: o Availability and cost of corporate credit – how easy is it to raise debt financing? Same for equity?
  • Currency stability – how stable is the local currency, are companies allowed to trade in a more stable base, or can they hedge to reduce their exposure to volatility? How about exchange control restrictions?
  • Comparative wage rates – how affordable is quality labour? Try find industry-specific data on PayScale, GlassDoor, etc and compare to costs in the home country.
  • Comparative office space rates – how affordable is work space?

 
Socio-demographic:

• Consider how socio-demographic metrics impact the local workforce, which you will likely need to employ. I.e. will you be able to find the skills you need, at the right price? o Education levels and industry-specific skills
  • Native languages and prevalence of English
  • Work ethic; quality of work life
  • Crime, theft and security
  • Culture – this one impacts both staffing and customers. What are the key differences and how substantial are they? You can use Hofstede’s data for this – see https://www.hofstede-insights.com/product/compare-countries/

 
Technological:

• Are there any technology compatibility considerations that may create challenges (or opportunities)?
• Does the host country have the technology needed/support infrastructure for your industry?

 
Environmental:

• Environmental issues that may count against you or aid you (e.g. “green” legislation or incentives, public stance/expectations re environmental issues, etc).
• Practical differences that impact the ease of doing business: o Differences in time zones
  • Physical distance and travel time from the home country
  • Quality and accessibility of airports
  • Terrorism threats

Important – When writing up this section, it is very easy to slip into the trap of descriptive writing, as opposed to analytical writing. In other words, you present a whole lot of data, facts and figures, but fail to discuss what the impact of these points are. Your analysis doesn’t connect back to the research questions. To avoid this, make sure that for each section of writing, you make it clear whether the data, facts or figures:

• Increase or decrease the institutional attractiveness
• Present a potential liability of foreignness
• Impact potential entry mode options (for example, if 100% foreign ownership is not allowed)

If you consistently link the discussion back to these three considerations, you’ll have a rich analysis. For more information on analytical writing, see https://grad.coach/analyse-dont-describe/.

Round off the macro-level analysis with a brief concluding summary. Importantly, this summary should make it clear:

• How attractive is the country from an institutional perspective?
• What are the key differences between your home market/country and Country X? In other words, what are the contributors to your “liability of foreignness”.

 
2.2 Customer/market analysis (demand-side analysis)
Now that you’ve assessed the institutional environment in terms of its attractiveness, it’s time to assess the industry-level environment (highlighted below).

The starting point is the demand-side/market side – i.e. what is the potential market for your specific offering? There are many aspects to consider, but the key questions to address are:

• How large and profitable (i.e. attractive) is the potential local market for your offering? How does this compare to the home country or other markets you’re involved in?
• How receptive are they likely to be to your offering? Do they need it (and know that they need it?) This will depend, in part, on the level of competitiveness (which you’ll assess in the next section).
• What are the potential barriers (liabilities of foreignness) you’ll face in terms of selling to this market?

There’s no specific model, framework or theory to apply in this section. You just need to present the information in a logical, digestible fashion. Supporting data in the form of charts/graphs demonstrating market trends can add a lot of value in this section.

• It would be good to present some information about:
• The size and growth rate of the market
• The lifecycle of the market (e.g. embryonic, growth, mature) and what that means in terms of future attractiveness (will it grow or decline?)
• Any PESTLE/CAGE-type factors that impact potential customer demand (for example, cultural differences that will impact how you sell, market, etc).
• Also consider the regional market access that being based in Country X might provide (i.e. neighbouring countries), given FTAs/unions/integrations in the region (which you would have touched on in the macro analysis).

As always, consider both the pros and cons – what aspects are attractive and what aspects will contribute towards your LoF? Oftentimes, cultural differences present a substantial LoF – don’t try downplay this. The more critical (balanced) the analysis, the better.
 

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