Industries into Overseas Markets

This is in regards to my original memo concerning the expansion of C&C Industries into overseas markets. I have continued my research effort to evaluate the practicality of expanding to Japan instead of Australia. After careful review of several strategic advantages and disadvantages in both countries, and factoring in the objectives of C&C industries, it was apparent that Australia is the right choice for our expansion effort.

Australia will fit better with our business goals and give C&C Industries a greater chance of success in overseas markets. In this report I will summarize several key areas that will directly influence our expansion effort into overseas markets. After you review each of these sections it should be evident why I have selected Australia.

As always, if you have any questions regarding this report please feel free to contact me at any time. I would enjoy discussing my research and reasoning with you. Thanks for giving me the opportunity to present this report on such a critical matter for C&C Industries.

Expanding C&C Industries into overseas markets will be the key to growing our business. The opportunity for C&C Industries to expand our Network Services division outside of China has arrived. A number of overseas markets offer terrific opportunities for expansion. Selecting the market that fits our business goals and allows us to take advantage of current conditions will be essential to our success.

In this report I will analyze some of the key factors in expanding our business overseas. The two countries I will be evaluating are Australia and Japan. Particular topics of discussion will include culture, infrastructure, potential customers, and trading factors. After discussing these areas I will present my conclusion and provide my reasons for selecting Australia.

Culture

One of the most important factors in determining an overseas market to expand your business to is the culture. Australia offers a multicultural environment among its major cities. Following the most recent census conducted in Australia it shows that nearly "23% of all Australian's are foreign born, 2.3% of the people in Australia speak Chinese and over 80% speak English" (Census Data). Japan on the other hand is culturally homogeneous with only a small part of the population being born outside the country or speaking a language other than Japanese. This works well for our company since the majority of employees that are being considered for the move speak Chinese, English, or both.

Expanding our business to a country that offers a more diverse population and provides a potential work force that shares some of our common courtesies will increase our chances of success. If we were to choose Japan as a country for expansion, we would have to hire additional staff members to serve as translators since none of our current employees being considered for the move speak Japanese. There may also be some apprehension with our employees to adapting to Japan's more conservative customs. "Getting 100% buy in from our staff on where to expand to is essential to our success" (Delany).

Infrastructure

Successful delivery of our products and services to our customers is fundamental to our success. Both Japan and Australia have an excellent transportation network that will allow us to deliver our products with ease.

Australia relies heavily on its shipping ports with at least one major port located in each of its largest cities along the coast. For inland transportation Australia uses its vast railroad network to transverse its more unpopulated inner coastal areas. Japan has an efficient public transportation network, especially within the metropolitan areas and between the large cities. "Japanese public transportation is characterized by its punctuality, its superb service, and the large crowds of people using it" (Japan Guide).

Just like Australia, Japan relies heavily on its shipping ports for exporting and importing goods to the country. Japan also offers a state of art railroad system that that connects in major urban cities. All the major cities in Japan have airports that offer direct routes to other major cities and back to C&C's corporate headquarters in China. Australia and Japan both offer major airports in all of their more populated cities. I see no transportation problems with Australia or Japan and traveling to and from our headquarters in China present no problem for either country. 

Customer Base

Both Australia and Japan offer a large market for potential customers. The Networking Services division of C&C Industries targets current internet users as prime candidates for our products and services. In a survey performed in May 2007 that studied internet behavior among users aged 15 and over, it was revealed that "62% of the Australian population and 49% of the Japanese population use the internet" (JIJI Press America).

The potential for a larger customer base would appear to be Japan, but the market place in Japan is already over saturated with network companies that provide similar products and services. The Australian market place shows more potential than Japan because unlike Japan, Australia has not seen a huge influx of companies providing the network products and services that we can offer. 

Japan has more than established itself as an economic world power and Australia's economy is growing every year. Australia's Chief economist, Bill Evans comments on a recent Australian economic survey by stating "The revisions only accentuate the consistent message which the leading index has been sending for the last year or so — that the Australian economy is very likely to have entered a period of strong, sustained economic growth" (Agence France Presse).

From an economic perspective the Gross Domestic Product is a good indicator of a country's purchasing power. Figures 1 and 2 illustrate the World Bank's 2005 list and the International Monetary Fund's 2006 list for the GDP for China, Japan, and Australia. As you can see from the figure, Australia's GDP had a slight gain of 1.08% while Japan had a slight decrease of less than 1% during the one year period.