Disclaimer: This is an example of a student written essay.
Click here for sample essays written by our professional writers.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Foreign Investment In Russia Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 3607 words Published: 1st Jan 2015

Reference this

The case discusses about Schindler which is a company who established itself in 1874 in Switzerland and they manufactured escalators and elevators. For the first time it made a strong decision to develop a fully owned subsidiary in India with the help Mr. Silvio Napoli who will be leading it. He was a Harvard graduate, young, very analytical and had a strong strategic mindset. The case focuses on the problems faced by Mr. Napoli on starting and setting up operations and activities in India which was totally opposite to Switzerland from where he belonged. Mr. Napoli being an expatriate found it very different and difficult to adjust and acquaint him to an Indian culture. He struggled upon India’s protectionist tariff policies, considerations regarding cost and also the staff that was doubtful on his ways as Napoli wanted things carried on his way. All these were a big threaten to his entire career as he wasn’t able to go in accordance with his business plan. Mr. Napoli wanted to develop a cost effective solution to make, develop and sell a completely core and standardized product in India.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Essay Writing Service

He was a victim to several issues, mainly cultural issues. [1] Mr. Napoli being of Swiss origin believes in low context [2] communication style where as in India it is mostly of high context and maybe it’s for the same reason Napoli is regarded as very talkative. Napoli believed in sticking to business plan because of his orderliness as per Swiss. But the Indian management was mostly willing to customize. Mr. Napoli wanted to mix up his orderliness and generate the task-oriented nature which is why he was often regarded as impatient, impulsive and mostly a hard driver while Indian management compared Mr. Singh as an easy going, patient and friendly person. Indians are not very good time keepers and as a result they keep most of the things towards the end and this was strictly not tolerated by Napoli. This was another reason to issues in Schindler India. Another issue that came up is that, Napoli followed the Swiss habit of total accurate precision delivery where as Indians could be represented as they promise more but actually under deliver it. Napoli failed to understand the business culture properly as he was totally shattered with the increased import duties on certain specific noncore goods including elevators. In India the term of outsourcing was new and couldn’t be accepted easily, as a result many mangers in India happened to sign agreements against the strategies of the business plan.

This can be better understood if we take a look with the help of Hofstede’s comparison model. [3] The Italian and Indian culture are different from each other and it is such that Italians are much more focused on themselves as a team unlike Indian culture, when we look at the uncertainty avoidance Italians are usually a bit hesitant in coming to an unknown conclusion unlike the Indian culture. He should have more understanding of the Indian culture.

Napoli has failed tremendously to execute the plan that he presented at the time of term of sales, but a plus point is that he was able to develop a high leadership team, he also added onto the company’s business model certain buy-ins which was also a wise decision. So somewhere he still has a chance.

Secondly, I would like to consider the family issues he was having, he didn’t make a wise decision in relocating his family and had to fight several personal issues like his pregnant wife, managing her and her issues also his children injuring themselves. It’s not appropriate to take in Napoli’s family problems into account as a reason for his poor performance, since he comes from a typical Corporate Switzerland background.

Thus, the strategy should be such that, the inputs from the top level management of India has to be revised and also deep considerations regarding the cultural, technological, economical and governmental elements of India and the target market of India. When the strategy is revised the top level management of Indian subsidiary should be allowed to take and make decisions on their own on several key issues. Napoli should focus only on high end regional decision making. In order to make Schindler India profitable, it is best to properly assess Napoli’s team and continuously recheck the sales strategy and explore the Indian market and culture more deeply looking into the mindset of people and activities prevailing and then reinforce his ideas. It is such that standard products and service will make the business progressive and even looking at India’s very basic elevator market currently prevailing is the key aspects that will make India branch profitable.





This is a case that shows the problems and difficulties country managers were faced with while beginning to start central direction on Pan European/International sales, positioning and product development. It showcases the rollout of “Krona” which is a new spread alternative. Also showing how this was a failed strategy to maintain a cross country product viewpoints and perceptions also cultural differences and the various biases of the different country managers of Unilever.

It is seen that in the case Unilever was focusing completely on a centralized management style and wanted to increase their manufacturing abilities and capabilities, developing new product, economies of scale and even the leveraging of fixed investments in the brands. Local responsiveness was their core strength even while following a centralized management model. In the new organization, the country managers were made to bother about the variety in the tastes and preferences of different countries and also their needs were considered for making a completely new product which was the total opposite to their previous culture.

When we look at the strategic rationale that was undertaken for the development of ‘European Margarine, we see that they followed a basis of cost reduction method, there was a potential in the yellow fats category but using different approaches on national basis increased the cost for the development of new products. [4] It was seen that the transnational image was made stronger by the development of global brands which concentrated and created EU single market. They also leveraged high global expenses on brand investments.

It was extremely difficult to develop a Pan European band with the different cultural diversity across the countries. There were immense problems between the country managers as they we greatly irritated by the various international strategies that have to be coordinated between the countries and also the loss of their autonomy all this resulted in a huge barrier for communication for the county managers. The country managers had to focus on the consumption habits of consumers across Europe and it was not possible to create one single approach as the consumer preference and selection of food and its types varied widely. For instance if we take a German consumer they are bothered on natural products, the environmental considerations and even of the safety of food. But on the other hand French were deeply into the traditional style of taste and enjoyed its pleasure.

They also had problems of coordinating themselves as they wasted tremendous amount of time and money as various IC’s (Innovation Centers) were spending time working on the very same products. There was also intense competition between the independent local subsidiaries which had their own methods and agendas for development regarding products. Another main issue was that the top-down process of innovation much slower at producing product ideas.

There wasn’t any financial budgets made for international products and the local managers were given full risk. In the very much declining yellow fat category the local manager required the market share and profit. Also the local managers wanted independence as they were change resistant and had a competition among themselves

The underlying result after Krona being developed was very much below the bar, Krona became a huge success in Germany where it was made and developed because it was made only on the local likes and interest, but it failed miserably in the rest of the Europe. Another result in the company was a huge conflict of cultural problems and they also had to face the comments of developing products not according to the preference of consumer’s interest.

Thus, the strategic decision should be such that it’s made to cater and satisfy the local needs and tastes, doing and performing like that of Coca Cola and McDonald’s in China by means of presenting and offering the same nice product and making the consumers enjoy it tremendously, also make the top managers at Unilever such that they process and transfer their vision to the middle management and take away the fear of failing strategies. It is understood that many successful organizations are not ready for changes as it natural that changes alter and hamper their normal routines. Before making any crucial decisions it’s a must to understand the fact that proper steps and innovations must be taken to meet the national difference of people.





The executive team of MLC Corporation was examining if it should continue to expand and increase its production and distribution into Russia, in May 2008. There was an increase in the Russian economy and there were three reasons that contributed for the same. Firstly, the increase of natural gas exporting to Europe. Secondly, the increase in the energy price which led to the tremendous growth of the energy sector resulting in widening of the economy. Mark Olexi who was the CEO of MLC had basically three alternatives in front of him. The first being, to further expand the plant export and also to continue the exporting because of its success in the past many years. The second one being, to strengthen Russia’s competition position abroad by building a manufacturing and distributing center. The third option was to wait and take time for both decisions because of the prevailing uncertainties and risk factors in Russian economic and financial aspects.

The worldwide recession and the massive internal economic and financial crises were getting worse and it was doubtful if the Russian economy could withstand it or avoid it. Russia is undergoing a number of problems like a change in leadership as Vladimir Putin couldn’t run as President for another term; it was also a doubtful and concerning issue of how the foreign companies in Russia would be operating depending on the attitude of Prime Minister Putin and the next successor President Dmitry Medvedev. Another problem being the energy price shooting up. Along with these, Russia and the U.S relationships were being deteriorated by George W. Bush’s administration. Finally, the issue with regard to British and U.S financial system following the mortgage crises in 2007.

Find Out How UKEssays.com Can Help You!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our services

Mark Olexi had to decide which alternative to select to generate maximum results. He could decide on either of the following four decisions: First, export from US, sell in Russia [5] – while doing this the company could incur huge costs with regard to transportation and hence its very expensive to do so, also the unclear and complicated regulations in Russia can make it difficult for the selling to take place hence the company might suffer losses, even the political situation in the country is not good enough. On a positive note, since the production process is already established MLC would benefit from 70% of income coming from Russia. Second strategy is to produce in Russia, sell in Russia-by doing this even though there is a high risk factor we could generate larger profits, while investing in Russia it is possible to concentrate on the excess demand for the moment or even try a partial investment in Russia to see the success and progress of it. MLC could also make tie ups with the government and enhance their relationships with the government and hence form a hybrid / joint venture. Since the oil prices would possibly rise as per the forecast in the case, the Russian government would definitely secure the currency value. The third strategy is to produce in Russia, sell elsewhere- by doing this the company would be certainly risking itself and spending time and immense money in first identifying the pros and cons of that third country to sell and studying the economic and political nature of the third country, also knowing the consumers well, even understanding the unforeseen causes or changes in the environment. The fourth strategy is to produce elsewhere (not US, Russia),sell to Russia- By doing this the company would invest in a country that is geographically close to Russia, here the company can think of investing in an emerging economy, and can save expenses to a limit as its geographically closer, even expect a somewhat same political and economic conditions as its close but will definitely mitigate the currency risk involved in investing in Russia also try to focus and then expand the client base and even keep Russia from being 80% of the revenue generator. It would be ideal for the company to produce and sell in Russia considering the points mentioned above.

In the case it is seen that more than half of the revenue generated in the company is from a single client as it is definitely not a good way to continue a firm. The company could be always on the threat of losing that client. If that happens then the company would be under series losses. The company should find a way to generate revenue from more than one client and make it dispersed as possible. [6] 

Thus, from this case it teaches the various skills necessary to analyze the economic country data and even the political situation of country and use the various methods for assessing the prevailing risk factors in order to come up with a right decision.





This case talks about an airline company in Asia- AirAsia operating as an LCC (low cost carrier) how it came up in the market fighting between the increasing and rising flight operation costs and competition in the Asia-Pacific region .

It is important to first understand what makes Asia an attractive market for LCC, its mainly because of rapidly urbanizing population who are being developed and are ready to travel and see various locations, fewer substitutes for air travel with regard to traveling long distances with low fares, low but rising incomes of the population, the deregulation taking place and even sometimes disruptive innovation [7] – “A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology.” [8] 

Tony Fernandez who was a private entrepreneur captured AirAsia airlines from the Malaysian government when it was debt ridden in the year, December 2001. After a month, Tony Fernandez re-launched AirAsia airlines as South-East Asia’s first LCC (Low Cost Carrier). He was able to generate huge success and increased the profitability tremendously and even expanded its routes.

What he did was, he kept immense low cost structure comparing to the competitors and offered the customers extremely low airfare of 40% -60 % less than competitors. He developed the ticketless travel thus being environment friendly and consuming less paper. AirAsia developed also had free seating arrangements. Customers were even attracted as frequent draws were conducted on board and this surprised the passengers. He also developed a tag line “Now Everyone Can Fly” which attracted the customers and which they considered motivating. A multilingual website was also created; this attracted leisure travelers and purchased air tickets through it which had promotions and offer for specific traveling periods. AirAsia started off with the “Easy To Book, Easy To Pay & Easy To Fly” message and developed the telephone booking centre, sales offices, travel agents and also created tie-ups with several local banks and post offices. Mr. Fernandez conquered and became the first in many new services in the operation and started a plan which was considered risky by other services; he extended the airline services which included many long- haul routes. AirAsia was even first to stat the booking with the help of cell phones using a simple SMS. This showed how innovative he was and even went down to the corporate bone. AirAsia was ranked as the best LCC in the Asia region in the year 2007. It encouraged many other LCCs in the Asia Pacific area to come up with such ideas and on the other hand threatened MAS – Malaysian Airlines a full service operator which was a major competition at home.

MAS didn’t let go the competition from AirAsia and took stronger steps than AirAsia and started a sudden price war by offering to customers a zero fare for domestic travel and also for short-haul flights. They even built up a campaign “Everyday Low Fare” which even grabbed the attention of the customers by even immense advertisement war [9] and impressing potential passengers.





This case shows how Chabros International Group a Lebanese multinational wood company confronting a huge decrease of its largest subsidiary sales after the global economic crisis in 2008. Antoine Chami who was the owner and president of Chabros International Group when reviewed the company’s financial statements for the end of year 2009 saw that there was a thirty percent drop in the sales from Dubai. There was a growing lumber sales demand and Antoine Chami had invested $ 11 million to acquire and expand one of the saw mills in Serbia to meet this demand. This happened in 2007 a year before the global economic crises took place. There was high capacity for the production of lumber but with regard to selling, had low profitability.

To overcome this problem Chami could either shut certain parts of the Serbia mill or boost Chabros International Group’s sales to use up all the capacity available of the sawmill. If that happens, should it continue to increase sales where it was already operating like that of UAE, Saudi Arabia, Qatar, Oman, Egypt or should it try to expand to a new places like Algeria, Bahrain, Iran, Iraq, Jordan, Kuwait, Libya, Syria, Tunisia. He also would have doubts on Morocco, among other places, if it is the best country to expand for this activity? Also if it is the right time to start on such an expansion process





This is a case that deals with finding out the various key drivers of investing in the Middle East especially in Riyadh and Dubai of Saudi Arabia and United Arab Emirates respectively by foreign rich countries like The United states of America, Japan and several European multinational and financial services and service providers. A considerable sample of foreign companies is interviewed to find out the main aspects in their decision process and what made them select the mode of operation and details about their business model.

The case is in three sections, the first is about laws, regulations and requirements have changed considerably and that it has become more adapting to foreign investment in past years, this is performed with the help of several business environmental characteristic index and changes over time. The second part studies the exchange arrangements and framework for capital and financial transactions. The third section studies the various experiences of many multinational companies that have invested in the financial services sector of the Middle East.


Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: