Report on Aspect of International Business
Added on 2020-05-11
34 Pages8511 Words61 Views
Running head: INTERNATIONAL BUSINESS
International Business
Name of the Student
Name of the University
Author Note
International Business
Name of the Student
Name of the University
Author Note
1INTERNATIONAL BUSINESS
Executive Summary
The report is aimed to look into the aspect of international business, related with making
direct investment into projects situated in Rwanda Special Economic Zone. A Special
Economic Zone is a region where laws regarding businesses and trades are totally different
from the rest of the country. There are many incentives offered to attract investors towards
setting up business units in special economic zones of countries. The company considered for
the preparation of this report is Albert Supplies Ltd, which is an apparel manufacturing
organization, based locally. They have been operating in Rwanda Special Economic Zone
since 2016 and the director of the company, Albert Nsengiyumva had said that the factory set
up, would produce clothes of high quality and provide employment to 2000 people. The
initial investment of the company for setting up their unit in Rwanda Special Economic Zone
was 10 Billion Rwandan Franc. For any individual or group of individuals looking to directly
invest in projects of a company located outside their country, there are certain considerations
which they need to make. They need to be cautious about the risks involved while trying to
invest in projects of a company abroad by carrying out a PESTLE analysis. This would allow
them to scan the country and the region where they are putting the investment, by considering
Political, Environmental, Social, Technological, Legal and Economical factors, which can
have immense impact on the business they are trying to set up. Similarly, they need to make
sure that opportunities and threats for industry is taken care of as that would give them the
luxury of looking into ways of how to capture the market by attracting customers and also
analyze the possible threat which might arise from the new entrants and existing
organizations dealing with the same business for a length of time. This would help them in
making provisions for taking steps on how to tackle the threats for growth and progress. This
report would also analyze Porter’s Five Forces, which play significant role in giving
Executive Summary
The report is aimed to look into the aspect of international business, related with making
direct investment into projects situated in Rwanda Special Economic Zone. A Special
Economic Zone is a region where laws regarding businesses and trades are totally different
from the rest of the country. There are many incentives offered to attract investors towards
setting up business units in special economic zones of countries. The company considered for
the preparation of this report is Albert Supplies Ltd, which is an apparel manufacturing
organization, based locally. They have been operating in Rwanda Special Economic Zone
since 2016 and the director of the company, Albert Nsengiyumva had said that the factory set
up, would produce clothes of high quality and provide employment to 2000 people. The
initial investment of the company for setting up their unit in Rwanda Special Economic Zone
was 10 Billion Rwandan Franc. For any individual or group of individuals looking to directly
invest in projects of a company located outside their country, there are certain considerations
which they need to make. They need to be cautious about the risks involved while trying to
invest in projects of a company abroad by carrying out a PESTLE analysis. This would allow
them to scan the country and the region where they are putting the investment, by considering
Political, Environmental, Social, Technological, Legal and Economical factors, which can
have immense impact on the business they are trying to set up. Similarly, they need to make
sure that opportunities and threats for industry is taken care of as that would give them the
luxury of looking into ways of how to capture the market by attracting customers and also
analyze the possible threat which might arise from the new entrants and existing
organizations dealing with the same business for a length of time. This would help them in
making provisions for taking steps on how to tackle the threats for growth and progress. This
report would also analyze Porter’s Five Forces, which play significant role in giving
2INTERNATIONAL BUSINESS
businesses insight on Rivalry which exist in an industry, Threat of Substitutes, Bargaining
Power of Suppliers, Bargaining Power of Customers, Threat of New Entrants and the
Bargaining Power of Buyers. Analysis of these aspects would always help in making an
investor adopt a cautious approach and take appropriate strategies regarding the functioning
of their business. Then the report would also look into the projects undertaken by Albert
Supplies Ltd and seek information on whether they can have some stake on those projects by
investing certain amount in those projects. Finally, a SWOT Analysis would be done for the
organization, on whose project the investment would be made. SWOT refers to Strength,
Weakness, Opportunities and Threats of an organization, with the help of which the internal
and external factors affecting an organization would be analyzed.
businesses insight on Rivalry which exist in an industry, Threat of Substitutes, Bargaining
Power of Suppliers, Bargaining Power of Customers, Threat of New Entrants and the
Bargaining Power of Buyers. Analysis of these aspects would always help in making an
investor adopt a cautious approach and take appropriate strategies regarding the functioning
of their business. Then the report would also look into the projects undertaken by Albert
Supplies Ltd and seek information on whether they can have some stake on those projects by
investing certain amount in those projects. Finally, a SWOT Analysis would be done for the
organization, on whose project the investment would be made. SWOT refers to Strength,
Weakness, Opportunities and Threats of an organization, with the help of which the internal
and external factors affecting an organization would be analyzed.
3INTERNATIONAL BUSINESS
Table of Contents
0.1. Introduction.........................................................................................................................4
1.1 Company Details..................................................................................................................5
1.2 Rwandan Zone.....................................................................................................................6
1.3 Country Risk – PESTLIED Analysis...................................................................................7
2.1 Opportunities and Threats About Industry.........................................................................13
2.2 Porter’s Five Forces – Manufacturing Industry.................................................................15
3.1 Company Projects..............................................................................................................20
3.2 SWOT Analysis.................................................................................................................20
4.1 Conclusion..........................................................................................................................23
4.2 Recommendations..............................................................................................................24
5.1 References..........................................................................................................................25
6. Appendices...........................................................................................................................30
Table of Contents
0.1. Introduction.........................................................................................................................4
1.1 Company Details..................................................................................................................5
1.2 Rwandan Zone.....................................................................................................................6
1.3 Country Risk – PESTLIED Analysis...................................................................................7
2.1 Opportunities and Threats About Industry.........................................................................13
2.2 Porter’s Five Forces – Manufacturing Industry.................................................................15
3.1 Company Projects..............................................................................................................20
3.2 SWOT Analysis.................................................................................................................20
4.1 Conclusion..........................................................................................................................23
4.2 Recommendations..............................................................................................................24
5.1 References..........................................................................................................................25
6. Appendices...........................................................................................................................30
4INTERNATIONAL BUSINESS
0.1. Introduction
The report takes into account the aspect of international business to see how an
individual or group of individuals would invest in a project of a company current located in
the Special Economic Zone of Rwanda. Special Economic Zone refers to an area which is
geographically specified and physically secured, under the control of a single body (Dunning
2012). The Special Economic Zone provides certain incentives, in addition to more liberal
and simple economic regulations for organizations to locate physically and conduct their
business within the zone. Rwanda Special Economic Zone program is prepared to address
some of the private sector hurdles domestically like, availability of land for industrial as well
as for commercial purposes, availability of energy and the cost incurred for consumption,
problem regarding availability of transport for travelling purposes, access to the market for
understanding the psyche of customers, their perceptions and their views on the new investor
and finally availability of skilled workforce (Griffin and Pustay 2012).
The company considered for the preparation of this report is Albert Supplies Ltd, an
apparel manufacturing concern, which has been operating in The Special Economic Zone of
Rwanda since 2016. The director of the company, Albert Nsengiyumv had said that the
factory would produce all different kinds of quality control of the highest order and also
provide employment to 2000 people. The initial investment in the factory for commencing
their operations was 10 Billion Rwandan Franc and they had plans for launching their
finished products in the market by July this year (Wild, Wild and Han 2014).
The report would consider various factors which investors who are looking to invest
in the company’s projects need to take care of. On the initial front, the important thing for
every investor, who is looking to invest in the project of an organization away from the
country would be to scan the environment through PESTLE Analysis. PESTLE refers to
different factors which are indirectly involved in influencing any business and making great
0.1. Introduction
The report takes into account the aspect of international business to see how an
individual or group of individuals would invest in a project of a company current located in
the Special Economic Zone of Rwanda. Special Economic Zone refers to an area which is
geographically specified and physically secured, under the control of a single body (Dunning
2012). The Special Economic Zone provides certain incentives, in addition to more liberal
and simple economic regulations for organizations to locate physically and conduct their
business within the zone. Rwanda Special Economic Zone program is prepared to address
some of the private sector hurdles domestically like, availability of land for industrial as well
as for commercial purposes, availability of energy and the cost incurred for consumption,
problem regarding availability of transport for travelling purposes, access to the market for
understanding the psyche of customers, their perceptions and their views on the new investor
and finally availability of skilled workforce (Griffin and Pustay 2012).
The company considered for the preparation of this report is Albert Supplies Ltd, an
apparel manufacturing concern, which has been operating in The Special Economic Zone of
Rwanda since 2016. The director of the company, Albert Nsengiyumv had said that the
factory would produce all different kinds of quality control of the highest order and also
provide employment to 2000 people. The initial investment in the factory for commencing
their operations was 10 Billion Rwandan Franc and they had plans for launching their
finished products in the market by July this year (Wild, Wild and Han 2014).
The report would consider various factors which investors who are looking to invest
in the company’s projects need to take care of. On the initial front, the important thing for
every investor, who is looking to invest in the project of an organization away from the
country would be to scan the environment through PESTLE Analysis. PESTLE refers to
different factors which are indirectly involved in influencing any business and making great
5INTERNATIONAL BUSINESS
impact on the activities (Folsom et al. 2012). This is nothing but an opportunity to go deep
into the business by looking into different aspects like Political, Environmental, Social,
Technological, Economical and Legal. All these factors are crucial from the perspective of
any individual, willing to invest in companies abroad, to understand how the factors play
significant role in influencing the business outcomes and competition (Hamilton and Webster
2015). This gives investors clear picture of how to go about in tuning themselves as per the
scenarios regarding the factors. Porter’s Five Forces Model is another extremely crucial
aspect to understand how things stand when individuals are about to invest in projects of a
foreign company in a foreign land. The five forces include, Bargaining Power of Buyers,
Bargaining Power of Suppliers, Threat of New Entrant, Threat of Substitute Products and
Rivalry within the industry which would impact the environment greatly and deviation from
the norm would lead to correction. Finally, there would be a SWOT Analysis, whereby the
internal and external factors of the organization, Albert Supplies Ltd would be looked into.
The internal factors are Strengths and Weaknesses, which are internal to the organization.
The external analysis of Opportunities and Threats will provide the organization with ample
scope to target the right customers, seek for areas to focus upon for acquiring more
companies, thereby expand the business (Zikmund et al. 2013). Threats refer to the level of
competition, which an organization can face from existing businesses and find ways out to
cope up with the challenges.
1.1 Company Details
Albert Supplies Ltd is a local apparel manufacturing company, who has been
operating in the Special Economic Zone of Rwanda since 2016. The initial investment which
the company had made for setting up the factory was of 10 Billion Rwandan Franc. The
intention was to manufacture clothes of high quality and provide employment for close to
impact on the activities (Folsom et al. 2012). This is nothing but an opportunity to go deep
into the business by looking into different aspects like Political, Environmental, Social,
Technological, Economical and Legal. All these factors are crucial from the perspective of
any individual, willing to invest in companies abroad, to understand how the factors play
significant role in influencing the business outcomes and competition (Hamilton and Webster
2015). This gives investors clear picture of how to go about in tuning themselves as per the
scenarios regarding the factors. Porter’s Five Forces Model is another extremely crucial
aspect to understand how things stand when individuals are about to invest in projects of a
foreign company in a foreign land. The five forces include, Bargaining Power of Buyers,
Bargaining Power of Suppliers, Threat of New Entrant, Threat of Substitute Products and
Rivalry within the industry which would impact the environment greatly and deviation from
the norm would lead to correction. Finally, there would be a SWOT Analysis, whereby the
internal and external factors of the organization, Albert Supplies Ltd would be looked into.
The internal factors are Strengths and Weaknesses, which are internal to the organization.
The external analysis of Opportunities and Threats will provide the organization with ample
scope to target the right customers, seek for areas to focus upon for acquiring more
companies, thereby expand the business (Zikmund et al. 2013). Threats refer to the level of
competition, which an organization can face from existing businesses and find ways out to
cope up with the challenges.
1.1 Company Details
Albert Supplies Ltd is a local apparel manufacturing company, who has been
operating in the Special Economic Zone of Rwanda since 2016. The initial investment which
the company had made for setting up the factory was of 10 Billion Rwandan Franc. The
intention was to manufacture clothes of high quality and provide employment for close to
6INTERNATIONAL BUSINESS
2000 people (Boone 2016). The director of Albert Supplies, Albert Nsengiyumva had talked
of the possibility for the company to launch their finished products in the market by July, this
year. The company has been on the Apparel Manufacturing Zone of Rwanda, which occupies
around 5 hectares of land in the Kigali Special Economic Zone (Behuria 2017).
1.2 Rwandan Zone
Rwandan Special Economic Zone is set up for encouraging investors to come over
and start off business activities, as a result of which the whole economy of Rwanda can
flourish. Their SEZ program is designed to take care of some of the private sector problems
domestically, such as availability of lands for industrial as well as for commercial purposes,
cost incurred for energy consumption, the limitations of conveyance for travelling purposes,
access to the market for acquiring of right customers and retailers to get their products sold
and availability of skilled workforce (NISHYIREMBERE 2014).
The authority responsible for regulating the zone’s activities, is an independent entity,
who frames the rules and regulations, gives proper designations to the lands lying within the
purview of Special Economic Zone, then coordinating all the activities with Government
agencies to provide license and permissions (Kigali and DISTRICT 2016).
There is a developer, who belongs to the private sector concern, having got license
from the regulator, holds the responsibility to absorb the risk as well as the financing of
designing and also constructing all the required Special Economic Zone infrastructure along
with the facilities (HABAGUHIRWA 2017). The Kigali Special Economic Zone’s developer,
Prime Economic Zone Secretariat, also happens to be the owner of the land and hence they
get into the agreements for sale with different users.
2000 people (Boone 2016). The director of Albert Supplies, Albert Nsengiyumva had talked
of the possibility for the company to launch their finished products in the market by July, this
year. The company has been on the Apparel Manufacturing Zone of Rwanda, which occupies
around 5 hectares of land in the Kigali Special Economic Zone (Behuria 2017).
1.2 Rwandan Zone
Rwandan Special Economic Zone is set up for encouraging investors to come over
and start off business activities, as a result of which the whole economy of Rwanda can
flourish. Their SEZ program is designed to take care of some of the private sector problems
domestically, such as availability of lands for industrial as well as for commercial purposes,
cost incurred for energy consumption, the limitations of conveyance for travelling purposes,
access to the market for acquiring of right customers and retailers to get their products sold
and availability of skilled workforce (NISHYIREMBERE 2014).
The authority responsible for regulating the zone’s activities, is an independent entity,
who frames the rules and regulations, gives proper designations to the lands lying within the
purview of Special Economic Zone, then coordinating all the activities with Government
agencies to provide license and permissions (Kigali and DISTRICT 2016).
There is a developer, who belongs to the private sector concern, having got license
from the regulator, holds the responsibility to absorb the risk as well as the financing of
designing and also constructing all the required Special Economic Zone infrastructure along
with the facilities (HABAGUHIRWA 2017). The Kigali Special Economic Zone’s developer,
Prime Economic Zone Secretariat, also happens to be the owner of the land and hence they
get into the agreements for sale with different users.
7INTERNATIONAL BUSINESS
The day to day management of the zone is taken care of by the Regulator licensed,
private sector concern, which also provides support facilities in a specialized manner along
with other services (Hussain and Kimuli 2012).
1.3 Country Risk – PESTLIED Analysis
Country Risk is always involved whenever a new business is about to be set up in a
new region. These risks can be taken care of through analyzing different factors. PESTLIED
Analysis is a tool to analyze and screen the macro environment by looking into Political,
Environmental, Social, Technological, Legal and Economical. Detailed analysis of all the
factors would invariably help an individual to understand how the factors, which are outside
the purview of an organization, impact the overall business activities (Sichei and Kinyondo
2012). The analysis is as follows:
a) Political –
President is the Head of State of Rwanda, who exercises his power and
influence on the political system of country. He formulates the political policies in
association with the cabinet, having command over the armed forces, shows
mercy, signs various presidential orders and issues declarations in case of any
emergency as well as wars (Farole and Winkler 2012). The President gets elected
every 7 years by way of voting, who in turn gives appointment to the Prime
Minister and all other members as per the requirement. The President and the
Rwanda Patriotic Front have gone ahead to make significant progress to reduce
poverty and encourage economic development as a part of the vision to transform
Rwanda. The need was pressed upon especially after the genocide which had
taken place in the year 1994 (Andoh-Baidoo, Osatuyi and Kunene 2014). The
ambitious plans of the government to pave the way for country’s economic
The day to day management of the zone is taken care of by the Regulator licensed,
private sector concern, which also provides support facilities in a specialized manner along
with other services (Hussain and Kimuli 2012).
1.3 Country Risk – PESTLIED Analysis
Country Risk is always involved whenever a new business is about to be set up in a
new region. These risks can be taken care of through analyzing different factors. PESTLIED
Analysis is a tool to analyze and screen the macro environment by looking into Political,
Environmental, Social, Technological, Legal and Economical. Detailed analysis of all the
factors would invariably help an individual to understand how the factors, which are outside
the purview of an organization, impact the overall business activities (Sichei and Kinyondo
2012). The analysis is as follows:
a) Political –
President is the Head of State of Rwanda, who exercises his power and
influence on the political system of country. He formulates the political policies in
association with the cabinet, having command over the armed forces, shows
mercy, signs various presidential orders and issues declarations in case of any
emergency as well as wars (Farole and Winkler 2012). The President gets elected
every 7 years by way of voting, who in turn gives appointment to the Prime
Minister and all other members as per the requirement. The President and the
Rwanda Patriotic Front have gone ahead to make significant progress to reduce
poverty and encourage economic development as a part of the vision to transform
Rwanda. The need was pressed upon especially after the genocide which had
taken place in the year 1994 (Andoh-Baidoo, Osatuyi and Kunene 2014). The
ambitious plans of the government to pave the way for country’s economic
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