Economics Assignment: DynCorp International Portfolio Project Part 2

This report provides an analysis of DynCorp International's market entry strategy into Bosnia, Bolivia, and Somalia. It examines the company's operations, risk assessment, and adherence to ethical standards. The analysis covers topics such as the influence of the World Bank and IMF, legal considerations in common law countries, intellectual property protections, and corruption perception. It evaluates DynCorp's risk-return trade-off, exit strategies, and corporate social responsibility initiatives. The report also discusses the company's mission, stakeholder orientation, and organizational structure, suggesting improvements for scaling up the business using a matrix structure. This project explores DynCorp's approach to foreign capital and investment in challenging markets.

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Week 4 Assignment-Portfolio Project Part 2
ECONOMICS ASSIGNMENT

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Week 4 Assignment-Portfolio Project Part 2
Abstract
Foreign capital and investment is important for a business to expand in other markets of the
world. The objective of this paper is to present the details regarding the operation and the
entry strategy of DynCorp International which is one of the reputed aviation service providers
in the world. This company is deciding to enter the markets of Bosnia, Bolivia and Somalia.
Different details and information have been furnished in the analysis of the paper.

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Week 4 Assignment-Portfolio Project Part 2
Contents
Part 2..........................................................................................................................................3
Question 1..................................................................................................................................3
Question 2..................................................................................................................................3
Question 3..................................................................................................................................3
Question 4..................................................................................................................................4
Question 5..................................................................................................................................4
Question 6..................................................................................................................................4
Question 7..................................................................................................................................4
Question 8..................................................................................................................................5
Question 9..................................................................................................................................5
Question 10................................................................................................................................5
Question 11................................................................................................................................6
Question 12................................................................................................................................6
Question 13................................................................................................................................6
Question 14................................................................................................................................6
Reference....................................................................................................................................8

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Week 4 Assignment-Portfolio Project Part 2
Part 2
Question 1
There are many countries with which DynCorp International does business. These include
Bolivia, Somalia, Angola, Haiti, Kosovo and many more. Among these countries, Bolivia,
Bosnia, and Somalia is the target country of the company. These countries are also members
of the World Bank and IMF as well. Although Somalia is more active than the other two
countries, they are no less involved in the operation of the World Bank and the IMF. Apart
from that Bolivia is also associated with the World trade organisation as well. All the
countries receive monetary assistance from the side of the institutions and hence abide by the
rules and the regulations (Upson, Sanchez & Smith, 2017). A manager from the US needs to
modify his behaviour while talking to officials of one these countries. Communication
between the officials needs to be professional and polite.
Question 2
Yes, DynCorp International operates in countries which are risky to operate. For example,
Somalia has a lot of political turmoil inside the country. The country has not been able to
perform in terms of economy in the last few years which have also reflected in the median
income and the job growth of the country as well. Low job grown and decreasing median
income has resulted in protest and unrest from the side of the people of the country. Apart
from that, Bolivia is also moderately risky to operate as people of the country have a history
to protest against the president of the country (Tulung, 2017). These protests can create a
problem for the business and hence makes the operation of the company risky.
Question 3
All three countries where DynCorp International is working are mainly following common
law. Therefore, none of the countries have laws and regulations codified or written in the
constitution. Apart from that, judicial decisions are binding in nature and hence different
from the common law countries. One of the biggest advantages of common law countries is
that nothing is prohibited if it is not against the interest of the nation as a whole. This gives
flexibility to the company in terms of improvisation and operation (Klingebiel & Joseph,
2016). Another implication of the fact that DynCorp International operating in common law
countries is that government laws have no out of the line influence on the operation of the
company.
Question 4
Yes, DynCorp International has purchased insurance from OPIC in order to secure the
operation in the emerging countries. OPIC allows companies to have a strong foothold in the
emerging economies of the world. OPIC also provides matching security to the investors

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Week 4 Assignment-Portfolio Project Part 2
which also ensure a healthy inflow of investment in the country where DynCorp International
operates (Ahi, Baronchelli, Kuivalainen & Piantoni, 2017). One of the biggest advantages of
the OPIC is that it adheres to the laws and the regulations of human rights and hence pushes
the clients towards a healthy operation as well.
Question 5
There are a number of intellectual property protections by DynCorp International which
increases the value of the goods and the services of the country. It holds the patent for the
transportation of cargo within the selected countries. Apart from that, cargo operation and
freight corridor management is also another area where the company has its intellectual
property protected. That means no other company in these countries can claim the goods and
the services until the patents expire (Williams & Vrabie, 2018). Most of the patents of the
company expire in 5-7 years and the company is trying to use competitive pricing in order to
increase the revenue so that lost revenues due to the patent can be recovered from the market.
Question 6
Somalia scores 10 out of 100 in the corruption perception index whereas Bosnia scores 38
which are comparatively better than that of Somalia. While different institutions of the
government are using terrorist forces for a stronger foothold in the country (Ilhan-Nas, Okan,
Tatoglu, Demirbag, & Glaister, 2018). According to reports the institutions in Somalia have
been found to finance the terrorists in order to have greater control over the country.
Although, the direct corruption in Bosnia is less it is still more than many other developed
economies of the world. It not only harms the potential economic performance of the country
but it also reduces the credibility of the economy as a likely destination for investment
inflow.
Question 7
Risk-return trade-off determines the preferences of the company. Some of the companies are
risk averse while some are risk takers and this influences the entry strategy of the companies
in a new country. In this case, DynCorp International is a risk taker and wants to have a
higher return in the long run even if it makes lower return or losses in the short run. This is
also the reason for the choice of countries. Now given these preferences the country wants to
undertake a Greenfield investment where the commitment and the involvement of the
company are the most (Ang, Benischke & Doh, 2015). However, the investment and the risk
associated with the Greenfield investment is high compared to the other means of entry.

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Week 4 Assignment-Portfolio Project Part 2
Given the aims of the company to earn a higher return in the future this entry method is
perfect for DynCorp International.
Question 8
Despite the risk-taking attitude of the company there are some of the exit strategies in place
which can minimise the loss of the company. Given the fact that DynCorp International is
introducing new technologies in the aviation industry of the respective countries, a merger or
acquisition is the best exit strategy for the company (Fu, Lei, Wang & Yan, 2015). In the case
of bankruptcy, the company will be compelled to associate itself with existing companies of
the market. Liquidation is another exit strategy that the company is in place if the merger deal
does not convince the management of the company. In this process, the company reduces the
price points of each of the properties of the company so that it is sold in the market quickly.
Question 9
DynCorp International is a good corporate citizen as it has ethical standards for the operation
of the company. The company does not import labours and the workers from the source
country and uses the local labours. In addition to that, the company also does not violate the
rules and the regulations of the respective countries in which it operates. It also has
incorporated corporate social responsibility as one of the important responsibility of the
company in the countries as well. The company also have a plan to use a part of their profit to
fund the education of the lower segment of the people of the country as well. Better education
in the target countries would create more advanced labours in the market (Hollender, Zapkau
& Schwens, 2017). This not only would help the company to produce a higher value but it
can also allow the company to have an expanded customer base in the long run.
Question 10
The mission of the company is to improve aviation support in the field of aviation in different
parts of the world. The operations of the company are in line with the mission as it really
focuses on different parts of the world. Its innovation and implementations are also in line
with the mission statement of the company.
Question 11
As per the strategy formulation of the company, it is categorised as a stakeholder orientation
model. One of the basic features of this model is that the focus of the management of the
company remains on the well being and the interest of the stakeholders more than on the
shareholders (Lee, Lee & Min, 2018). DynCorp International is not only providing services,
but it also has the mission to influence the lives of the people as well. Therefore the business
is oriented towards the interest of the stakeholders. In the initial years of operations in the

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Week 4 Assignment-Portfolio Project Part 2
selected economies, the company would not be able to generate returns for the shareholders
as it would adhere to its mission statement.
Question 12
DynCorp International is not a stateless corporation currently as its operation is mainly
limited to the USA. A stateless corporation is a company that operates in different countries
of the world. As per the mission of the company and the current activities to enter the new
emerging markets, it can be said that the company is on its way of becoming a stateless
corporation (Karakaya & Parayitam, 2018). The mission statement of the company also
suggests that the company will also enter other types of economies in the future depending on
the financial success of the company in the existing market.
Question 13
Currently, the company is using a hierarchical structure for the operation of the company. In
this structure, there are few low-level workers of the company who are supervised by an
immediate manager of the company. Again these lower managers are groped and supervised
by another mid-manager of the company. These mid-managers then report to the respective
higher managers who work under the CEO, CFO, and CTO of the company. The company
has been following this structure for a long time now and it does not have any intention to
change it in the near future.
Question 14
The company would be able to rip better benefits if it uses structures like a matrix as it
categorises the managers and the employees based on the expertise. Surdu, Mellahi, Glaister
& Nardella (2018) stated that different workers of the company are pooled as per their
expertise under a manager. Apart from that, empirical studies have shown that matrix
business structure has been a key influencer in the process of scaling up a business. DynCorp
International has a clear focus on scaling up the business and enter the other markets of the
world which can be easily realised by using the matrix organisational structure. Information
inflow is a great fuel for the operation of DynCorp International. A matrix organisational
structure helps in the rapid inflow of information into the organisation and hence it would be
more helpful for the company.

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Week 4 Assignment-Portfolio Project Part 2
Reference
Ahi, A., Baronchelli, G., Kuivalainen, O., & Piantoni, M. (2017). International Market Entry:
How Do Small and Medium-Sized Enterprises Make Decisions?. Journal of
International Marketing, 25(1), 1-21.
Ang, S. H., Benischke, M. H., & Doh, J. P. (2015). The interactions of institutions on foreign
market entry mode. Strategic Management Journal, 36(10), 1536-1553.
Fu, X., Lei, Z., Wang, K., & Yan, J. (2015). Low cost carrier competition and route entry in
an emerging but regulated aviation market–the case of China. Transportation
Research Part A: Policy and Practice, 79, 3-16.
Hollender, L., Zapkau, F. B., & Schwens, C. (2017). SME foreign market entry mode choice
and foreign venture performance: The moderating effect of international experience
and product adaptation. International Business Review, 26(2), 250-263.
Ilhan-Nas, T., Okan, T., Tatoglu, E., Demirbag, M., & Glaister, K. W. (2018). The effects of
ownership concentration and institutional distance on the foreign entry ownership
strategy of Turkish MNEs. Journal of Business Research, 93, 173-183.
Karakaya, F., & Parayitam, S. (2018). Market entry barriers and firm performance: higher-
order quadratic interaction effects of capital requirements and firm
competence. International Journal of Markets and Business Systems, 3(2), 121-140.
Klingebiel, R., & Joseph, J. (2016). Entry timing and innovation strategy in feature
phones. Strategic Management Journal, 37(6), 1002-1020.
Lee, J. Y., Lee, C. W., & Min, J. (2018). Investment Climate in the EAEU and Korea's Entry
Strategy. KIEP Research Paper, World Economy Brief, 18-01.
Surdu, I., Mellahi, K., Glaister, K. W., & Nardella, G. (2018). Why wait? Organizational
learning, institutional quality and the speed of foreign market re-entry after initial
entry and exit. Journal of World Business, 53(6), 911-929.
Tulung, J. E. (2017). Resource Availability and Firm’s International Strategy as Key
Determinants Of Entry Mode Choice. Jurnal Aplikasi Manajemen, 15(1), 160-168.

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Week 4 Assignment-Portfolio Project Part 2
Upson, J. W., Sanchez, M. S., & Smith, W. J. (2017). Competitive Dynamics of Market
Entry: Scale and Survival Abstract: Market entry is the essence of strategy and is
largely viewed as a dichotomous event: entry or no entry. What has not been
acknowledged is the uniqueness of each market entry. Our study highlights the scale
of market entry in the context of multipoint competition. We assert that entry scale
varies based on the risk of market incumbent retaliation. Theory suggests that when
risk associated with retaliation are low, firms enter with large .... Management and
Economics Review, 2(1), 118-132.
Williams, C., & Vrabie, A. (2018). Host country R&D determinants of MNE entry strategy:
A study of ownership in the automobile industry. Research Policy, 47(2), 474-486.