BSB119: Global Business - Country Analysis Report for Choc-Q

This report, prepared for Choc-Q, an Australian confectionery company, evaluates the market potential in Japan and India for their chocolate products. It begins by analyzing the economic environments of both countries, including GDP growth, inflation, and unemployment rates, highlighting India's faster growth and Japan's technological advancements. The political landscapes and associated risks are then examined, noting India's political instability and Japan's relative stability. The business environments are assessed, considering factors such as business environment rankings, consumer trends, and infrastructural costs. A weighted index is used to compare the countries across various variables, including market potential, country risk, economic freedom, business environment, and political stability. Based on the analysis, the report recommends India as the more suitable country for business expansion, considering its large youth population and favorable market conditions, despite the challenges of political instability and government interference.

Running head: COUNTRY ANALYSIS REPORT
COUNTRY ANALYSIS REPORT
Student’s Name
University Name
Author note

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Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Economic Environment.............................................................................................................2
2.1 Economic environment of India............................................................................................2
2.2 Economic environment of Japan...........................................................................................3
3.0 Political environment and risk...................................................................................................3
3.1 Political environment in India...............................................................................................3
3.2 Political environment in Japan...............................................................................................4
4.0 Business Environment...............................................................................................................4
4.1 Business environment of India..............................................................................................4
4.2 Business environment of Japan.............................................................................................5
5.0 Country Choice..........................................................................................................................6
5.1 Weighted Index......................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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1.0 Introduction
Choc-Q is an Australian confectionery company based in Queensland, it offers various
confectionery food products and items such as chocolates, fruits and nuts baskets, gift packets,
sweets, lollies, muffins and other confectionery food items in Australia. The company has gained
market position and has increased the profitability. Therefore, the company plans to expand its
products offerings to either Japan or India. The purpose of this report is to analysis the external
market situations in the selected countries and determines the suitability of the business
organization in either of the selected countries. It further analyzes the economic, political and
business environment of Japan and India and determines the market potential for confectionery
and chocolate food products. Lastly, from the detailed analysis of the economic, political and
business environment, it selects the most suitable country for business organization.
2.0 Economic Environment
2.1 Economic environment of India
India has a diverse economy and has an open market economy. The company’s growth
rate increases 7% every year (Heritage.org 2019). The investors’ perceptions have improved
since the past years. The government has imposed goods and service tax bill and has raised the
foreign direct investment capital in some of the sectors. However, the country has a higher
growth rate as compared to most of the countries. However, there are challenges such as
inefficient power generation and other distribution system. The GDP (real growth rate) of the
country is 6.7%. (2017). the inflation rate of the country is 3.8 % in 2017 (Heritage.org 2019).
The unemployment rate of the country is 8.8% in 2017.

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2.2 Economic environment of Japan
Japan is the master for technological advancements, has a strong work ethic and it has an
advanced economy. The GDP (real growth rate) of the country is 1.5 % in 2017. The
unemployment rate of the country is 2.9% in 2017 (Heritage.org 2019). The inflation rate of the
country is 0.4% in 2017. The country is making progress in terminating deflation and shrinking
the population. The agreement on the Trans-Pacific Partnership (TPP) has increased competition
in the market. However, it is an opportunity to create new exports. However, it is confectionery
(Aditya & Acharyya, 2013) food items are not a trend among the Japanese people as they prefer
traditional food culture.
3.0 Political environment and risk
3.1 Political environment in India
The political situation in India is highly unstable which can be a challenge. However, the
growth rate of the country is expected to growth in the future years. The country is aiming to
move towards a more stable price regime (Austrade, Australian Government - Austrade. 2019).
However, the politicians of the country are aimed to consolidate the public accounts; it further
aims to promote investment, development of industries. Therefore, there is an opportunity to
improve the business climate (Breuer, Rieger & Soypak, 2014). The main opportunity of doing
business in India is economical operational cost. This can reduce the overall cost of expanding
the business operations in the country.
3.2 Political environment in Japan

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The political situation in Japan is comparatively stable. The country is highly intensified,
modern and industrialized. It is the country with a symbol of national unity. The country has
elected political parties who hold the power to take decisions (Broadberry, Custodis & Gupta,
2015). The politicians of the country have embarked on security reforms in order to improve the
economy of Japan and boost the country’s international standing. However, the fiscal deficit of
the country is expected to widen which remains a challenge. There is a reduction in the
workforce. Japan Australia Economic Partnership Agreement (JAEPA) benefits both the
countries. This agreement is an opportunity for investment in the country. These agreements
underpin a sting relation with Australia and in the years to come (Coface.com 2019).
4.0 Business Environment
4.1 Business environment of India
The business environment ranking of India is 57/82. It scores 6.08 on the overall business
environment considering various aspects such as macroeconomic environment, the market
opportunities, foreign trade and control and others (Heritage.org 2019). The country is the fastest
growing economy, despite political disturbances. The government of India has adopted a positive
attitude towards direct foreign investment. The labor rate of the country is competitive as
compared to the other countries (Krishnan, Teo & Lim, 2013). The consumers of the country are
highly quality conscious and have a preference for confectionery product items. The youth
population of the country is high, which is highly suitable for Choc-Q. The consumer spending
of the country is more likely to increase. Further, there is a digital boom which influences the
consumption patterns of the consumers (Lee, Yang, & Chang, 2014).. However, there is an
increasing trend for health conscious consumers, which can be challenging.

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4.2 Business environment of Japan
The business environment ranking of India is 27/82. It scores 7.33 on the overall business
environment considering various aspects such as macroeconomic environment, the market
opportunities, foreign trade and control and others (Lockwood, 2015). The country is well
development and has a transparent legislation and tax system. The political and economic
condition of the country is comparatively stable (Transparency. org 2019). The corruption level
is low as compared to India. However, the consumer trends are not favorable as they highly
prefer traditional food items rather than western food items. The corporate tax burden is
comparatively higher than India. Political interference can be an obstacle for foreign investment.
This challenges the overseas companies. The infrastructural facilities are costlier which makes
expansion expensive (weforum.org 2019). Moreover, the country faces many natural disasters
such as earthquakes, which can disrupt the flow of operations in the country.

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5.0 Country Choice
5.1 Weighted Index
Variable Weighting
India Japan
Score
Weighted
Score Score
Weighted
Score
Market potential 25% 8 2.00 2 0.30
Country risk 15% 5 0.75 5 1.25
Economic
Freedom
25% 6 1.50 5 1.25
Business
environment
15% 8 1.60 6 0.90
Political Stability 20% 4 0.60 7 1.40
Total 100% 6.45 5.00
Every variable is related to Choc Q, and the difference between the countries has been
determined. The market potential of India is higher than Japan due to the described economic
and political factors. The country risk of both the countries is more or less same (Wright et al.
2014). It implies that Choc Q will face same level of challenges in both the countries. India has
lack of adequate infrastructural facilities and uncertain political environment while on the other
hand; Japan has reduction in the workforce and high level of government influence. India scores
higher on economic freedom as it has a fast growing economy as compared to Japan. The
Business environment of India is comparatively favorable because of favorable consumer trends
and purchasing trends (Lockwood, 2015). However, the India is politically unstable company as

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compared to Japan. The political disturbances in India can interfere the smooth functioning and
operations of the company. Since India scores high on majority of the selected variables, it is the
chosen country for business expansion. As stated above, the country has huge population in the
country especially the youth generation. They mainly prefer traditional food items. Therefore, it
can be said that India is best suited for expansion.
Conclusion
Therefore from the above analysis, it can be concluded that India is best suited for
company expansion considering various variables such as market potential, overall country risks,
economic freedom, overall business environment and political stability of the country. The report
has analyzed the economic environment of both the countries. It has been identified that India is
the fastest growing economy with highly amount of youth population. Various trade agreements
with Japan and Australian makes it favorable for business expansion. However, there is an
increasing interference of the government officials which can be challenging for the business
organization. The political environment of the countries has been identified. Japan has less
political stability as compared to India. The business environment of both the countries has been
analyzed. India has low cost of infrastructure and low setting up cost this is highly favorable for
the business organization. The report has provided a provided the country choice with weighted
index.

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References
Aditya, A., & Acharyya, R. (2013). Export diversification, composition, and economic growth:
Evidence from cross-country analysis. The Journal of International Trade & Economic
Development, 22(7), 959-992.
Austrade, Australian Government - Austrade. (2019). Retrieved 18 September 2019, from
https://www.austrade.gov.au/
Breuer, W., Rieger, M. O., & Soypak, K. C. (2014). The behavioral foundations of corporate
dividend policy a cross-country analysis. Journal of Banking & Finance, 42, 247-265.
Broadberry, S., Custodis, J., & Gupta, B. (2015). India and the great divergence: An Anglo-
Indian comparison of GDP per capita, 1600–1871. Explorations in Economic History, 55,
58-75.
Coface.com (2019) : Credit insurance, Debt Collection, Factoring, Business Information, Bonds,
Economic studies. Retrieved 18 September 2019, from https://www.coface.com/
Heritage.org (2019) Index of Economic Freedom: Promoting Economic Opportunity and
Prosperity by Country. Retrieved 18 September 2019, from
https://www.heritage.org/index/
Krishnan, S., Teo, T. S., & Lim, V. K. (2013). Examining the relationships among e-government
maturity, corruption, economic prosperity and environmental degradation: A cross-
country analysis. Information & Management, 50(8), 638-649.
Lee, C. C., Yang, S. J., & Chang, C. H. (2014). Non-interest income, profitability, and risk in
banking industry: A cross-country analysis. The North American Journal of Economics
and Finance, 27, 48-67.

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Lockwood, W. W. (2015). Economic development of Japan (Vol. 2161). Princeton University
Press.
Transparency. org (2019). Transparency International - The Global Anti-Corruption Coalition.
Retrieved 18 September 2019, from https://www.transparency.org/
weforum.org (2019). Retrieved 18 September 2019, from
http://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitiveness
Report2017%E2%80%932018.pdf
Wright, S., Emele, C. D., Fukumoto, M., Velaga, N. R., & Nelson, J. D. (2014). The design,
management and operation of flexible transport systems: Comparison of experience
between UK, Japan and India. Research in Transportation Economics, 48, 330-338.