DBM701 Corporate Strategy: Recommendations for SIS Thailand Expansion

This report provides recommendations for SIS, a fashion design company based in New Zealand, to improve its performance as it expands into Thailand. It addresses exchange rate risks by suggesting investment in Exchange-Traded Funds (ETFs) to hedge against market fluctuations. To mitigate political risks and stability issues related to Foreign Direct Investment (FDI), the report emphasizes dialogue with political leaders and advocates for liberal policies that encourage foreign investment. The report further advises on mitigating country risks by improving financial and political contexts, developing a country risk evaluation report, and addressing economic and commercial factors. Overcoming language barriers and cultural conflicts between New Zealand and Thailand is also discussed, along with the importance of fulfilling legal obligations and training employees to gain a competitive advantage. Finally, the report compares and contrasts direct and indirect export modes, weighing their potential risks and benefits.

Running head: CORPORATE STRATEGY
Corporate Strategy
Name of the Student
Name of the University
Author Note

1CORPORATE STRATEGY
Task 5
Recommendations
The recommendations that could be given to achieve the better performance in the
business industry should be evaluated in this section.
Ideas that will cope up with Exchange rate risk
The company SIS must invest in the SIS i.e. Exchange-Traded Aid/Funds. This is a very
important mode of funds that can be accessed which can make its way for the trade in the
dominating markets in Thailand. The people who own the ETF funds provide the hedge to the
customers. This will help the company to comply with the investment standards all over the
target country of expansion. These circumvent funds do have the better options of improved
expense ratio in the entire mix.
Ideas to mitigate the political risks and stability issues for FDI
As SIS wants to expand into Thailand they must face some troubles relating to the FDI.
The political stability of the target country is a very big issue for the company. If the target
country has many problems regarding the political stableness, it would be very hard for the
company to implement the Foreign Direct Investment into their operations. The developing
economies would be greatly hampered than the developed ones. The political discomforts should
be reduced by discussing the problems with the political leaders of the region. This should be
very much important for making the situations better and reduce the political challenges as well.
The countries must adopt the liberal policies for the benefit of the outside organizations. In turn

2CORPORATE STRATEGY
this will be very much beneficial for the government as their national economy and GDP rate
will increase due to the foreign direct investment.
Mitigating the country risks
The country risks should be mitigated by the company SIS. The financial and political
contexts should be improved so they can expand into Thailand properly. The country
governments should set up a proper business environment indeed. They should focus on
developing a country risk line evaluation report that should be very helpful for them to
understand the risks that are associated about doing business in this country. All the issues like
the economic, commercial and other things should be discussed beforehand to ensure the best
line of business in the proposed country.
Overcoming the language barriers
There can be some cultural conflicts arising when the company will expand into
Thailand. This is why the organization must think about some ways by which they can confront
the issues proactively. The culture of New Zealand and Thailand is totally different so the
problems of individualism and collectivism must arise.
Legal obligations and competitive advantage
The company should maintain good relation with the government and pay the taxes very
frequently to avoid any ban on their business operations. They should abide by all the legal
obligations that are present in the country. As the Thai people are quite fascinated about the
fashion goods, they have a huge chance of making a good business. They should train their
employees in the best ways to gain the competitive advantage as well.

3CORPORATE STRATEGY
References
Alfaro, L., & Johnson, M. S. (2012). Foreign direct investment and growth. In The evidence and
impact of financial globalization (pp. 299-309).
Blitz, D., & Huij, J. (2012). Evaluating the performance of global emerging markets equity
exchange-traded funds. Emerging markets review, 13(2), 149-158.
Campbell, B. A., Coff, R., & Kryscynski, D. (2012). Rethinking sustained competitive advantage
from human capital. Academy of Management Review, 37(3), 376-395.
Tenzer, H., Pudelko, M., & Harzing, A. W. (2014). The impact of language barriers on trust
formation in multinational teams. Journal of International Business Studies, 45(5), 508-
535.