[Solved] MNC Enters China

Assignment Prompt & Instructions

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Select one MNC that does not currently do business in China. Next, consider the steps that the company should consider in determining the feasibility of entering the Chinese market and establishing a market for its products or services there.

Use the [Strayer University Library](http://research.strayer.edu/) and the following links to conduct a country risk assessment (CRA) on China:

– [Bureau of Economic Analysis (BEA)](https://www.bea.gov/).
– [Corruption Perceptions Index 2013](http://www.transparency.org/cpi2013/results).
– [Ease of Doing Business Rankings – Economy Rankings](https://www.doingbusiness.org/en/rankings).
– [International Monetary Fund – Homepage](https://www.imf.org/external/index.htm).
– [Country Risk Classification](http://www.oecd.org/trade/topics/export-credits/arrangement-and-sector-understandings/financing-terms-and-conditions/country-risk-classification/).
– [World Trade Organization- Home page – Global trade](https://www.wto.org/)
– [Compare Countries](https://www.hofstede-insights.com/product/compare-countries/).

Focus on areas such as corruption, political stability, exchange rate stability, regulatory oversight, freedom of the press, and rule of law. Research other factors that you believe you should evaluate. Additionally, consider the importance of culture in evaluating risk.

## **Instructions**

Write an 8-10 page paper in which you:

– Summarize the business that you selected and provide a two to three-paragraph justification as to why China would be a viable market for the selected business.
– Examine the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Explain the major overall changes that have occurred and speculate on the key economic variables that most likely have influenced the exchange rate movements. Provide a rationale for your response.
– Analyze the major challenges in international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Based on what you have gleaned from your analysis, predict the major changes that you believe will occur in the next 24 months. Justify your response.
– Recommend key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Suggest one method that the MNC in question could use with derivatives in order to mitigate or eliminate such risks. Provide a rationale for your response.
– Recommend one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Justify your response.
– Conduct a country risk assessment to ascertain whether management should support the proposal for your chosen MNC to enter the Chinese market. Based on Geert Hofstede's six dimensions of culture, predict three likely problems posed by the cultural differences between the chosen MNC's culture and the Chinese culture. Provide a rationale for your response.
– Use at least six quality references, with at least two from peer-reviewed journal articles.

This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the [Library site](https://library.strayer.edu/sws) for all support. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment is:

– Determine whether an MNC should enter into a foreign market, including: whether the market is viable, exchange rate favorability, challenges related to international arbitrage and interest rate parity, ways to mitigate exposure to international economic conditions, an appropriate hedging technique, a country risk assessment and likely problems posed by cultural differences.

**Week 8 Assignment – MNC Enters ChinaCriteriaRatingsPointsSummarize the selected business and provide two to three paragraphs justifying why China would be a viable market for the selected business. (5%)Exemplary** Thoroughly summarized the selected business and provided a two to three paragraph justification as to why China would be a viable market for the selected business. **7.5 to >6.74 ptsCompetent** Satisfactorily summarized the selected business and satisfactorily provided a two to three paragraph justification as to why China would be a viable market for the selected business. **6.74 to >5.99 ptsNeeds Improvement** Partially summarized the selected business and partially provided a two to three paragraph justification as to why China would be a viable market for the selected business. **5.99 to >5.24 ptsUnacceptable** Did not submit summarized selected business. Did not submit a two to three paragraph justification as to why China would be a viable market for the selected business. **5.24 to >0 pts**/7.5 pts **Examine the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Explain the major overall changes that have occurred, and speculate on the key economic variables that most likely have influenced the exchange rate movements. Provide a rationale for your response. (15%)Exemplary** Thoroughly examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Thoroughly explained the major overall changes that have occurred, and thoroughly speculated on the key economic variables that most likely have influenced the exchange rate movements. Thoroughly provided a rationale for the response. **22.5 to >20.24 ptsCompetent** Satisfactorily examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Satisfactorily explained the major overall changes that have occurred, and satisfactorily speculated on the key economic variables that most likely have influenced the exchange rate movements. Satisfactorily provided a rationale for the response. **20.24 to >17.99 ptsNeeds Improvement** Partially examined the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Partially explained the major overall changes that have occurred, and partially speculated on the key economic variables that most likely have influenced the exchange rate movements. Partially provided a rationale for the response. **17.99 to >15.74 ptsUnacceptable** Did not submit an examination of the exchange rate of the U.S. dollar and the Chinese yuan for the last 24 months. Did not submit explanation of the major overall changes that have occurred, and did not submit speculation on the key economic variables that most likely have influenced the exchange rate movements. Did not submit a rationale for the response. **15.74 to >0 pts**/22.5 pts **Analyze the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Predict the major changes that will occur in the next 24 months with justification. (15%)Exemplary** Thoroughly analyzed the major challenges faced with International Arbitrage and Interest Rate Parity associated with transaction and translation exposure within the Chinese market. Thoroughly predict the major changes that will occur in the next 24 months with justification. **22.5 to >20.24 ptsCompetent** Satisfactorily analyzed the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Satisfactorily predicted the major changes that will occur in the next 24 months with justification.. **20.24 to >17.99 ptsNeeds Improvement** Partially submitted or incompletely analyzed the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Partially predicted the major changes that will occur in the next 24 months with justification. **17.99 to >15.74 ptsUnacceptable** Did not submit analysis of the major challenges faced with international arbitrage and interest rate parity associated with transaction and translation exposure within the Chinese market. Did not submit prediction of the major changes that will occur in the next 24 months with justification. **15.74 to >0 pts**/22.5 pts **Recommend key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Suggest one method that the MNC in question could use with derivatives in order to mitigate or eliminate such risks with rationale. (15%)Exemplary** Thoroughly recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Thoroughly suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Thoroughly provided a rationale for the response. **22.5 to >20.24 ptsCompetent** Satisfactorily recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Satisfactorily suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Satisfactorily provided a rationale for the response. **20.24 to >17.99 ptsNeeds Improvement** Partially recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Partially suggested one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Partially provided a rationale for the response. **17.99 to >15.74 ptsUnacceptable** Did not submit recommended key steps that the chosen MNC could take to mitigate or eliminate exposure to international economic conditions. Did not submit one method that the MNC in question could use with derivatives to mitigate or eliminate such risks. Did not submit a rationale for the response. **15.74 to >0 pts**/22.5 pts **Recommend one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Justify the response. (10%)Exemplary** Thoroughly recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market.  Thoroughly justified the response. **15 to >13.49 ptsCompetent** Satisfactorily recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Satisfactorily justified the response. **13.49 to >11.99 ptsNeeds Improvement** Partially recommended one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Partially justified the response. **11.99 to >10.49 ptsUnacceptable** Did not submit recommendation of one hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Did not submit or incompletely justified the response. **10.49 to >0 pts**/15 pts **Conduct a country risk assessment to ascertain whether management should support the proposal for your chosen MNC to enter into the Chinese market. Based on Geert Hofstede’s six dimensions of culture, predict three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture. Provide a rationale for the response. (15%)Exemplary** Thoroughly conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Thoroughly predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six  dimensions of culture. Thoroughly provided a rationale for the response. **22.5 to >20.24 ptsCompetent** Satisfactorily conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Satisfactorily predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six  dimensions of culture. Satisfactorily provided a rationale for the response. **20.24 to >17.99 ptsNeeds Improvement** Partially conducted a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Partially predicted three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six dimensions of culture. Partially provided a rationale for the response. **17.99 to >15.74 ptsUnacceptable** Did not submit a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Did not submit  prediction of three likely problems posed by the cultural differences between the chosen MNC’s culture and the Chinese culture based on Geert Hofstede’s six dimensions of culture. Did not submit a rationale for the response. **15.74 to >0 pts**/22.5 pts **Use at least six academic references. (5%)Exemplary** Exceeds number of required references; all references are high-quality choices. **7.5 to >6.74 ptsCompetent** Meets number of required references; all references are high-quality choices. **6.74 to >5.99 ptsNeeds Improvement** Does not meet the required number of references; some or all references are poor-quality choices. **5.99 to >5.24 ptsUnacceptable** No references provided. **5.24 to >0 pts**/7.5 pts **Writing mechanics, grammar, and formatting. (5%)Exemplary** Error-free or almost error-free grammar, spelling, punctuation, and formatting. **7.5 to >6.74 ptsCompetent** Mostly free of errors in grammar, spelling, punctuation, and formatting. **6.74 to >5.99 ptsNeeds Improvement** Partially free of errors in grammar, spelling, punctuation, and formatting. **5.99 to >5.24 ptsUnacceptable** Serious and persistent errors in grammar, spelling, punctuation, and formatting. **5.24 to >0 pts**/7.5 pts **Appropriate use of SWS in-text citations and reference section. (5%)Exemplary** In-text citations and references are error-free or almost error-free and are consistently formatted correctly in SWS style. **7.5 to >6.74 ptsCompetent** Most in-text citations and references are provided, and they are generally formatted correctly in SWS style. **6.74 to >5.99 ptsNeeds Improvement** In-text citations and references are provided, but they are only partially formatted correctly in SWS style. **5.99 to >5.24 ptsUnacceptable** Lack of in-text citations, or  lack of a reference section, or lack of both. **5.24 to >0 pts**/7.5 pts **Information literacy and integration of sources. (5%)Exemplary** Sources are consistently integrated using effective techniques of quoting, paraphrasing, and summarizing. **7.5 to >6.74 ptsCompetent** Sources are mostly integrated using effective techniques of quoting, paraphrasing, and summarizing. **6.74 to >5.99 ptsNeeds Improvement** Sources are partially integrated using effective techniques of quoting, paraphrasing, and summarizing. **5.99 to >5.24 ptsUnacceptable** Serious errors in the integration of sources, such as intentional or accidental plagiarism, or failure to use in-text citations. **5.24 to >0 pts**/7.5 pts **Clarity and coherence of writing. (5%)Exemplary** Information is provided in a clear, coherent, and consistent manner with reasons and evidence that logically support ideas. **7.5 to >6.74 ptsCompetent** Information is mostly clear and generally supported with reasons and evidence that logically support ideas. **6.74 to >5.99 ptsNeeds Improvement** Information is partially clear with minimal reasons and evidence that logically support ideas. **5.99 to >5.24 ptsUnacceptable** Information is confusing to the reader and fails to include reasons and evidence that logically support ideas. **5.24 to >0 pts**/7.5 pts