Contents
I. COMPANY BACKGROUND INFORMATION
Our company Electrical Repair Incorporated has been operating in the domestic arena for 10 years. Electrical Repair Incorporated is a moving company in the way that our headquarters are in Los Angeles, California however our employees travel to different places domestically repairing power lines, power poles and cables in times of natural disasters. Natural disasters range from storms, hurricanes, typhoons to terrorism attacks.
II. INFORMATION ON PRODUCT OR SERVICE
Electrical Repair Incorporated goes around to different cities and states in their time of need putting up electrical power lines, cables, and poles. Our company works as west as California helping out with the San Andreas earthquakes, as north as New York with the 9/11 attacks, and as south as Florida with the hurricanes.
III. STRATEGIC PLANNING PROCESS
A. EXTERNAL ENVIRONMENT ANALYSIS
1. Physical Forces
A. Location
Data: The Dominican Republic is an excellent perspective location for foreign business in terms of its trade agreements. The country benefits from the Central American Free Trade Agreement (CAFTAN). This trade agreement minimizes trade barriers between the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The combined yearly total goods traded among all seven countries are approximately $32 billion. The trade total between the U.S. and the Dominican Republic alone already equals close to $9 billion a year (“Washington File”, 2004). In addition, the country has trade agreements with the World Trade Organization (WTO), the Association of Caribbean States and several other direct free trade agreements with other Caribbean nations (“Sice”, 2004).
B. Topography
Data: The Dominican Republic is a land of varied landscapes comprised of rain forests, valleys, and desert regions amongst others. The area of the country is approximately 48,442 square kilometers with 1600 kilometers of coastline and 300 kilometers of beaches. Two large mountain ranges divide the country into the northern, central, and southwestern regions. The country’s major river is the Yaque del Norte River. Lake Enriquillo, its largest body of water is located in the southwestern region. Pico Duarte, the country’s tallest mountain peak reaches a height of 3,087 meters (“Encarta”, 2004).
C. Climate
Data: The Dominican Republic has a year round tropical maritime climate. The average daily high temperature is 87F and the low is 73F. The country has little seasonal temperature variation. Instead, the major influence of the seasons is seen in the amount of rainfall. The northern coast’s rainy season lasts from November through January. In the rest of the country, it runs from May through November. The dry months run from November through April. The country is susceptible to tropical cyclones such as tropical storms, hurricanes and tropical depressions. These storms occur an average of once every two years. Most of these storms strike the southern part of the country between June and October (“Library”, 2004). Most recently, tropical storm Jeanne battered the island on September 18, 2004 (“Jeanne”, 2004).
D. Natural Resources
Data: The main resources of the Dominican Republic are agricultural. The soil in the valleys is fertile and conducive to farming. Many of the mountain slopes are covered with forests. The country also has valuable deposits of bauxite, nickel, gold, and silver. People in the urbanized areas of the island are able to easily access clean, safe water but rural inhabitants have far less access (“Theodora”, 2004).
Impact of Physical Forces
A. Marketing: Despite the outdoor nature of our product, the physical environment of the Dominican Republic should have little effect on the marketing of our company. The country needs power regardless of its landscape and physical attributes. The marketing of our product leans more towards the price point we can reach, the quality of our work and the experience that we have in the electrical repair area.
B. Finance/Accounting: Sever storms that have the potential to wreak major damage on the country’s electrical system are relatively frequent in comparison to other regions of the world. These storms can occur several times a year. From a financial standpoint, this fact is good for business because it means that we will have frequent work in the country. In addition, the accounting period and practices may have to be adjusted for the irregularities involved with waiting for storms.
C. Human Resources: The tropical climate and year round pleasant weather is the portion of the physical environment that will have the greatest impact on our human resources. The Dominican Republic’s tropical climate is generally attractive to Americans. In addition, we will be supplying the greater majority of our management employees from our American division. Therefore, the tropical climate’s appeal will aid us in recruiting employees to make the move with the company.
D. Operations: The Dominican Republic is an island nation. This is the factor of the physical environment that will have the greatest impact on our operations. Bringing our equipment into the country will have a high cost because we will have to endure the burden of traveling over water. In addition, an operational benefit of the country is that we can benefit from the trade agreements that are in place for acquiring supplies. These two factors may cancel each other out to some degree if we focus on maximizing the benefits of the country’s trade agreements to minimize costs.
2. Financial Forces
A. Exchange Rate
Data: In 2000, the amount of the United States dollar equaled 16 pesos. In 2002, the United States dollar got stronger and rose to 19 Dominican pesos.
B. Currency Exchange Controls
Data: The private market where most economic sectors are free to buy or sell foreign currency through commercial banks and exchange agents authorized by the superintendence of banks.
C. Balance of Payments
Data: The unequal growth of the Dominican economy poses additional challenges to the national economic administration. Although tourism earnings and family foreign currency transfers have reduced the impact of the trade balance deficit, while increasing flows of foreign capital have financed the current account deficit, the reduction of these deficits remains one of the main economic challenges of the authorities. In the year 2001, the balance of payments showed an overall positive result of US$513.2 million, an improvement of US$561.2 million when compared to the US$48.0 million deficit of the year 2000. This was mainly due to the reduction in the value of imports that surpassed the decrease in exports, as well as the increase of foreign direct investment and the earnings obtained from the successful placement of sovereign bonds. This positive result of the balance of payments helped to strengthen net and gross international reserves, which increased by US$522.6 million and US$520.3 million, respectively. The deficit of the current account was reduced from 5.2% of GDP in 2000 to 4.0% of GDP in 2001, an improvement of 18.3%. Likewise, the deficit of the trade balance was reduced by 7.8%, above all because of the lesser demand of imported goods resulting from the lower growth of the economy. As to the service account, this had been registering increasing positive results since the 1980’s; it decreased by 8.1%, due to a reduction of 6.0% in tourism earnings.
D. Tariffs
Data: The Customs Code, contained in Law 14-93 of August 28, 1993, harmonized customs tariffs, adopting the internationally recognized Harmonized System of Codification and Designation of Goods. The wide variety of categories and rates that previously existed was in this way eliminated, and only six tariffs were
established. These amendments simplified considerably the procedure for the calculation and collection of custom duties. However, these amendments were still far behind
the requirements of the GATT and this situation, together with the fact that custom authorities use very discretional valuation methods, resulted in the country
having the highest custom duties of the region. That is the reason why a customs duties reform was passed by way of Law 146-00 of December 27, 2000, which sets new duty rates of 0.3%, 8%, 14% and 20%, thus reducing the top 35% existing before.
Furthermore, duty exemptions for strategic economic sectors have been maintained and reinforced. On the other hand, from July 2001, Article VII of the GATT as method of valuation of merchandises entered into effect, as provided in Law 146-00 (as amended by Law 12-01 of 17 January 2001). The WTO has authorized the Dominican Republic to exempt 24 items from being subject to the GATT valuation method for a transition period of two years. These include milk, milled rice, clinker, used tires, air conditioners, fridges,
laundry machines, ceramic, used vehicles, tractors, etc. Custom duties are calculated and paid in Dominican pesos.
The conversion into pesos of the value of the goods is made according to the official exchange rate applicable at the time of payment. In addition to custom duties, the importer has to pay (i) the selective consumption tax charged on certain products, which ranges from 10% to 80%, calculated on the CIF price of the good plus custom duties, and (ii) the tax on the transfer of industrialized goods and services (ITBIS), which accounts for 12% of the CIF price of the product plus duties and (i).
Apart from free zones, there are very little exoneration to the payment of import taxes. These are limited to some basic products, agricultural products like insecticides and herbicides, articles to be used by international organizations or the diplomat articles to be used for religious worship and samples for exhibition at international fairs.
E. Taxation:
Data: Law 11-92 of May 31, 1992 contains the Tax Code. This Code has four sections: (1) General Principles, Proceedings and Penalties, (2) Income Tax, (3) Tax on Transfer of Industrialized Goods and Services (ITBIS), and (4) Selective Consumption Tax.
Advanced payments: Companies shall make a 1.5% advanced payment on the gross income tax owed for the current year, payable monthly on the basis of gross monthly income. Agricultural and livestock companies are exempted from these payments, as well as companies with average annual earnings of less than two million pesos. Companies that the previous year had an effective tax rate higher than 1.5% of gross income shall pay every month one twelfth of taxes paid for that period. When the tax liquidated for the respective period does not exceed the 1.5% paid in advance, such payments shall become final. When companies have made payments lower than 1.5% of gross income, they shall pay at the appropriate time the remaining amounts, and when advance payments result higher than gross income and higher than liquidated tax, the difference will be a credit for the company that may be set off with the income tax and advances to be paid during the next three fiscal years.
Income Tax: Dominican citizens and residents must pay taxes
on the income they generate in the country and on income originating abroad. Foreigners must only pay taxes on income of Dominican origin, and after the third year of residence, also on income of foreign source. Any person or entity that pays taxable income
has the duty to withhold the respective tax amount and pay it to the administration. These withholding agents are liable to the tax office for the payment of the corresponding taxes.
Tax rate for companies: The income tax rate for legal persons is currently
25% on the taxable income of each fiscal year. This tax must be withheld at a corporate level from the dividends paid by the company. The remaining balance is not
subject to any other tax, whether it is paid to persons or companies.
Tax rate for individuals: Individuals benefit from an exemption for income
of up to RD$125,256 per year. Above this amount the tax rate increases in proportion to the income, as follows: 15% for income from RD$125,256 to RD$208,760, 20%
for income from RD$208,76001 to RD$313,140, and 25% for income exceeding RD$313,140 per year. The employer must withhold this tax from the salary paid to
the employee. These amounts are subject to annual inflation adjustments based on the Consumer Price Index of the Central Bank.
Income from business activities: A 10% tax rate applies to income obtained in the course of business activities, such as fees, commissions, etc., which has to be withheld by the person or company making the payment. A higher rate of 20% applies to income obtained from the lease of property, 15% to income obtained from lottery games,
1.5% to payments made by State agencies for independent services, and 10% to any other income.
Tax on the Transfer of Industrialized
Goods and Services (ITBIS): ITBIS applies to (i) the transfer of industrialized
goods, calculated on the net transfer price plus accessory services, (ii) the import of industrialized goods, calculated on the CIF value of the goods plus custom duties, and (iii) the provision and lease of services, calculated on the value of service excluding
mandatory tips. The tax reform increased the ITBIS rate from 8% to 12%. Advertising services are taxed with a lower rate of 6%. A wide range of agricultural and livestock products have been exempted from the payment of ITBIS, such as living animals, meat, fishes for reproduction, milk products, plants to cultivate, vegetables and fruits for
public consumption, coffee, corns, milled products, sugar, cacao,fuel and energy, books and magazines, as well as personal computers and accessories are some things too.
Services excluded are education, culture, health, financial (excluding insurance), pension plans, ground transportation, electricity, water and garbage collection, rent of houses, and personal care.
Selective Consumption Tax: This tax applies to the transfer of certain goods
manufactured in the country and to the import of certain products and to the provision of certain services. Examples of these goods and services are alcohol and tobacco derivatives, vehicles, jewelry, certain home appliances, hotel rooms, etc. The tax rate ranges from 5% to 80%. This tax is payable monthly.
F. Inflation Rate
Data: The inflation rate reached its highest level (14.3%) in the year 1994. After a number of measures adopted by the Monetary Board of the Central Bank, inflation was gradually reduced, reaching 9.2% in 1995, only 3.8% in 1996 and 8.3% in 1997. The average Inflation rate has been maintained at one-digit levels, with an
average of 6.5% for the period 1996-2000. Inflation for the year 2001 was 4.38%, the lowest in the last five years.
3. Economic Forces
A. GNP- GNP
Data: is a countries gross national product. It is the total goods plus the services produced by a country. Dominican Republics GNP is 20.6 billion compared to the United States which is 10 trillion.
B. GDP- GDP
Data: is a countries gross domestic product. It is the total goods plus the services produced within a country. Dominican Republics GDP is 52.71 billion compared to the United States which is 10.99 trillion.
C. GDP/GNP Per Capita
Data: Dominican Republics GDP per capita is 6,300 compared to United States which is 36,731. Dominican Republics GNP per capita is 2,400 compared to 30,240.
D. Private Consumption
Data: Private Consumption is the disposable income which is the income subtracted by their personal tax. Dominican Republics private consumption is 77.7 percent of their GDP.
E. Income Distribution
Data: In the Dominican Republic the top 10% earn 37.9% of the national income while 25% are below the poverty line and the lowest 10% earn only 2.1% of the national income. 16.5% of the people are unemployed.
Impact of Economic Forces
A. The Human Resources Management: would be effected by the economic external forces because 80% of our workers will be from the Dominican Republic people, and seeing that their is such a disparity in the people who either earn below the poverty line and the fact that their GDP per capita is only 6,300 and we will be offering a salary based on our United States employees we don’t see where there will be a problem with finding employees who will want to work for our business.
B. Marketing: The Marketing department will not be effected by the economic external forces in the sense that we will be contracting directly by the government. The marketing department will come into affect with our business when we start hiring employees and we have to have find employees that are qualified and market out the positions we will have available.
C. Operations: The Operations department will be effected by the economic external forces because they have a relatively low GNP compared to their GDP showing that they don’t produce a lot of their own products rather exporting in goods. So instead of getting our materials from the Dominican Republic we are going to ship our materials over ourselves.
D. Accounting: The Accounting department will be effected by the economic external forces because our salaries will be our United States based salaries for the workers that are Dominican Republic instead of taking advantage of the fact that we can hire our Dominican Republic workers for a lot less than what United States employees make.
4. Socio-cultural Forces
A. Culture
Data: The definition of culture is “a learned pattern of behavior”. The Dominican Republic culture is very friendly, helpful, cheerful, high-spirited and non-aggressive. The DR is considered as a poor country, but this depends on your values. In their view it is a rich country in terms of concern for others.
B. Aesthetics
Data: The Dominican culture is a lot similar to the American culture. They admire celebrities, athletes, movie stars, etc They are especially proud of the former Miss Dominican Republic, Amelia Vega, who became Miss Universe in 2003.
C. Attitudes & Beliefs
Data: In the Dominican Republic there is something called The Manana’ Syndrome. Manana means tomorrow in Spanish. They believe manana is a great day for doing things which cannot be done today. Also manana could mean never. And if tomorrow comes and the same thing happens again then it will happen eventually. If you were told never it would displease you, so in the DR they simply just say “tomorrow”.
D. Religion
Data: The main religion in the Dominican Republic is Roman Catholic; followed by a small population of Protestants.
E. Technology
Data: In the Dominican Republic technology is at a minimum, majority of the work is manual labor. Most of the work has to do with agriculture.
F. Education
Data: The education system in the Dominican Republic differs from the United States, not every one was fortunate to attend school. The drop out rate was very high in rural communities. Textbooks had to be purchased by students except for the very poor. This factor discouraged enrollment substantially. Majority of the Universities were in major cities, and most of the students who attended came from a wealthy family in Dominican standards. Given these facts the literacy rate is still 75%.
G. Language
Data: The national language in the Dominican Republic is “Espanola”, or Spanish.
H. Non Verbal Gestures
Data: In the Dominican Republic the non-verbal gestures are the same as they are here in the United States.
Impact on Internal Forces
A. Human Resource Management: The main subtopics of socio-cultural that have an impact on HRM are religion, language, and education. When hiring employees from the Dominican Republic we have to take in factor their religion. On religious holidays we would have to pay the workers over time, or give them the day off. Language will is a factor because we will have to hire translators and we will need special training for the workers from the Dominican Republic and also for the workers we are bringing with us from the United States. Seventy Five percent of Dominicans can read and write from the age 15 and up.
This will insure us workers that will be able to read, write, and understand basic instructions.
B. Operations Management: Technology plays an important role with this for the simple fact that in the Dominican Republic the workers are used to manual labor. They are not use to using machinery. We will have to take this in factor if special machinery is needed while doing a job. We can either train the Dominicans or hire certified operators.
5. Political Forces
A. Type of political ideology
Data: The government of the Dominican Republic is a democracy. Democracy is defined as a form of government in which the supreme power is retained by the people, but which is usually exercised indirectly through a system of representation and delegated authority periodically renewed. Change of power occurs every 4 years when the president is elected (“Encarta”, 2004).
B. Factors that impact national stability
Data: The greatest threat to the national stability of the Dominican Republic is corruption in the government. This problem is mainly due to the heavy drug trafficking that occurs in the country. The Dominican Republic is involved with heavy cocaine transportation. Drug money laundering and payoffs of government officials are prevalent. In addition, illegal migration and alien smuggling is an issue that couples with the drug issue. The Dominican, Haitian border is a hotspot for smuggling (“Threats”, 2004). Despite these issues, the country is stable relative to its neighbors and poses only a mild threat of terrorism. The CIA is currently working in close conjunction with the Dominican Republic’s government in attempt to curb these national stability issues.
Impact of Political Force
A. Marketing: Our marketing attempts will be focused at gaining a government contract. The Dominican government is riddled with corruption. Therefore, the motives behind the granting of these contracts could be questionable. We will have to be aware of this fact in our approach. We must stay abreast of the problem in an attempt to stay as competitive as possible.
B. Finance/Accounting: The accounting of our company will be affected by the corruption in the government. In an attempt to avoid scandal, we must ensure that our accounting practices are fair and in accordance with established standards. Their government officials are constantly looking for corruption and we do not want to be involved with these problems in any way.
C. Human Resources: The Dominican Republic’s political forces should only have a minimal effect on our human resources. Their system of government is democratic so our American constituents should not be deterred from that fact.
D. Operations: The trade agreements that are in place are an operational benefit of the political environment of the Dominican Republic. We can benefit from these agreements by using suppliers without worrying about tariffs or additional costs associated with trade barriers.
6. Legal Force
A. Flow of Trade
Data: Law 146-00 established a selective tax to vehicles, tourist vehicles and any other vehicles used for human transport (apart from public transport).
Trade Agreements: FTAA (Federal Trade Agreement of the Americas)
Treaties: The Dominican Republic has several international treaties with the United States.
B. Flow of Labor
Data: At least 80% of the workers of a company should be Dominican citizens. Supervising officers should preferably be Dominicans, but there are no restrictions at manager level. When a Dominican citizen substitutes a foreigner in an employment position the Dominican employee will be entitled to the same salary, rights and conditions as the foreign employee.
C. Flow of Goods
Data: Goods will be transferred from the United States to the Dominican Republic by water.
Intellectual Property: Protected works are indeed protected by Law 65-00.
Impact on Legal Forces:
A. Accounting: Because our venture to the Dominican Republic is a separate division in our organizational design it is going to incur more taxes on our income statements. It is not just total taxes in the United States anymore, but those plus our new venture internationally. Our taxes will be greater because we will be driving vehicles in the Dominican Republic and abiding by their tax laws.
B. Marketing: Our Company is going to market ourselves with a different marketing scheme for the Dominican Republic. Because of the new vehicle car tax, we will be accruing more taxes the longer we stay in that foreign country. Furthermore, we will have the new marketing motto, “Task, once a task has begun never leave it until it’s done, be the labor great or small, do it well or not all.” Our emphasis from the motto is “once begun, never leave until done. Our marketing will be different because we will be switching to a 24 hour working day. In the United States work is usually on call by disaster or 9-5pm. Because of the car tax we want to finish quick so it’s one year of taxes compared to 2 or 3 from the 9-5pm job day. As soon as one gets off shift another one comes on.
C. Operations: There are trade agreements like the Federal Trade Agreement of the Americas that allow us to go to the Dominican Republic and import various assets of the company with the duties and tariffs being free of charge until September 30th, 2008 on certain items. There are treaties set up so we can do business, however in the case that there isn’t we could go reciprocity, the mutual or cooperative interchange of favors or privileges of trade between nations. Reciprocity is only what Electrical Repair Incorporated would do if there were not any international treaties already in existence. There government by law respects all trademarks, patents, and copyrights. This is important so that when we take our cables and poles and other resources to the country we fill confident in that nobody will steal our ideas and try to profit off of them elsewhere.
Human Resource Management: Our staffing for the Dominican Republic will be Host Nation. By law our company must hire 80% in the international venture. That means there will not be any migrating from United States to the Dominican Republic. Only our top managers will be moved to the Dominican Republic. We will have to train the Dominicans which will be a cost in not just the area of electrical repair but in a decent amount of English. A positive attribute is that they do have knowledge of the country of the Dominican Republic and there is no a relocation cost.
Competitive Force
When it comes to the competitive forces that our business will be facing, seeing that we are dealing directly with the government of the Dominican Republic we will not have any competition. The only competition that our company will be undertaking is any other businesses that will be trying to put in a bid for the electrical repair contracts to the government.
B. Internal Environment Analysis
1. Organizational Design
The organizational design of our company is going to be tightly coupled with all of our departments interconnected. We are going to have a separate International Division instead of added it on to one of the other departments. We feel the International division should be separate because doing business outside of our country is a new venture, therefore we should start a completely new and separate division. By doing this we would not complicate any of our other divisions by connecting the International division to it.
2. Organizational Control
As a company, we are experienced in our field but inexperienced in operating within the Dominican Republic. Expanding our operations into this country will be a new and unfamiliar endeavor. With this fact in mind, we must have organizational controls in place so that we can counteract this issue. We plan to send over some of our more experienced and talented managers. This strategy should counteract our lack of experience in the country and effectively minimize the damage caused by unexpected occurrences by having our best staff in place to respond to the issues.
3. Human Resource Management
A. Strategic Human Resource Management
Data: Conventional in standards when dealing with the onsite employees (the ones physically working on the power lines, cables, poles, and towers).Strategic in standards in when dealing with the top managers and upper-level management.
B. Regional & Cultural Differences:
Data: There will be a wage gap issue with other companies in the Dominican Republic, however not with ours.
Data: There are no differences from the Dominican Republic and the United States.
C. Staffing
Data: We have to employ 80% of our workforce from the host country of the Dominican Republic.
D. Compensation Plan
Data: Electrical Repair Incorporated will be sending top managers from United States to the Dominican Republic with base salary, company housing, company cars, a bonus for going overseas, health insurance, and life insurance.
Lower Level Employees: Onsite employees who do the majority of the physical work will have health insurance.
Impact on Human Resource Management
A. Accounting: Because we will have to train the employees in English and electrical repair our costs will soar. The training cost will reflect in accounting in that our income statements will immensely be different from the year before. During time of disclosure come fiscal year shareholders and clients might be displeased.
B. Marketing: The more Dominicans see other Dominicans come to our job because it pays well and because we need to hire such a great amount will be marketing in its own right. If one sees a whole lot of commotion and talk in an area of interest others are always interesting to see what is going on behind it. Because of such a considerable wage gap other Dominicans working at other companies will feel the need to come to our company and other companies will suffer with high turnover while our company will be marketing indirectly with a wage competitive to the one in United States just converted to Dominican Pesos.
C. Operations: It was operations idea to come up with the format that top managers will be strategically employed. Electrical Repair Incorporated wants a competitive advantage when dealing top management. Lower Level onsite employees can still be unilaterally employed. Electrical Repair Incorporated needs that its top managers know different areas of work and have the knowledge to work together interrelatedly “tightly loosed.” Electrical Repair Incorporated will be sending their employees with a company house already furnished in the Dominican Republic. Instead of having a moving expense for each of the top managers it was better to have on place picked out already furnished. Along with a company house there will be a company car because this will facilitate there travel within the foreign country and take their mind off car expenses, taxes, and car problems in general. This relief will help them focus on getting the Dominican Republic in to the shape they need to be in and coming back to the United States. All top managers will receive a bonus because they are going passed what is expected from the company on an ambition to further the success and life of the company. Life insurance and health insurance will be vital because going into another country any type of disease, virus, or illness, or injury for that matter can come over them while working across the water.
C. Mission Statement
Our mission is to provide the county of Dominican Republic with their electrical repairs now and for many years to come. We will be providing top quality service to whatever job we are contracting including repairing every broken power line and other electrical repair that we can to the best of our ability. We hope that we can be as beneficial to the country of Dominican Republic as they are to us by providing top quality jobs to the people of Dominican Republic at good salaries. We are a business who abides by the ethical standards in business as well as life. We are not a business who will put up with or justify any acts that can be viewed as unethical, damaging, or hurtful. We will uphold all of are contracts safely and environmentally and economically sound.
D. Company’s Objectives
o To provide top quality electrical repair consultancy services which maximize clients’ results
o To conduct our business according to the highest level of ethics
o To do all in our power to pack the customer pound full of value, quality and satisfaction
o To maintain a management culture that is action oriented, always flexible and never bureaucratic
o To expect from the service we render a fair remuneration and not all the profit that market place will bear
o To continue to train ourselves and our associates so that the service we give will be more and more intellectually performed
o To be the most efficient in everything that we do
o Our clients success is our genuine concern
E. Company’s Quantifiable Goals
The amount of revenue we obtain will depend on how severely a particular storm damages the island and the amount the government approves for electrical repair of that storm. We will send out a team to do a feasibility survey and proceed with submitting a bid to the government if the project appears to meet our earning standards. The minimum cost of a project we will entertain will be $10 million. This earning plateau will justify allotting our resources considering that we are already heavily involved in other domestic projects.
F. Company’s Strategy
1. Be prepared to commit.
It’s not enough for two companies to pose together for the duration of a press conference. They need to forge a strategy for building mutual value. “Both partners need to be successful. Otherwise, when times get tough, somebody’s going to be tempted to make gains at the other side’s expense.
2. Communicate one message.
Partners must establish protocols for internal communication, consultation, and information dissemination. Everybody needs to understand who’s making which decision. If coalition partners get different messages from different team members, they’ll question the other side’s motives and commitment to goals.
3. To end well, start smart.
Begin the relationship with a structured launch process. Figure out all the challenges that will make it difficult to work together: How are we going to manage conflict? How are we going to handle surprises? How are we going to deal with breakdowns in trust? Also, determine how those messages will be communicated to the rest of the organization.
6. Keep your friends close — and your enemies closer.
In business — as on the international stage — the most challenging alliances are those in which companies, or countries, are partners in one area and competitors in another.
We’re partners in the coalition against terrorism, we’re competitors in some economic arenas, and we’re adversaries in others. Making that whole thing work is a huge challenge. Both sides need to understand that a strong relationship doesn’t mean you always agree with each other.
G. Company’s Tactical Plan
Our tactical plan for our business in the Dominican Republic in the near future is to be the lone electrical repair business contracted out by the government in the Dominican Republic. We want this first venture out into the international business to be as successful as our domestic business is here in the United States. We plan on this branch of our business being be a multi-million dollar business in the Dominican Republic like we are here in the United States. We plan on meeting the Dominican Republic law that all international businesses must have 80% of their employees be from the Dominican Republic within our first week in the country, so we can be ready and working as soon as possible.
After a few years of perfecting our international business in the Dominican Republic we plan on expanding to neighboring countries if it’s economically suitable for our business.
IV. ENTRY STRATEGY
In any venture, risk is inevitable. For Dominican Republic companies, success in the global playing field is contingent on several factors: usage of aggregated intelligence, focus on market demands and characteristics, and mitigation of business risks.
While it takes an appetite for risk to even consider venturing abroad, “best practices” in market research and business modeling can mitigate against risks.
A market entry strategy is important because it provides a strategic roadmap. It organizes our thought process and serves as a communications plan for other companies, our management, and our investors. Developing a market entry strategy also helps our company to understand the costs and benefits of each possible approach to the market, and provides signals for our company to exit the market in the event that things don’t go according to plan.
V. OTHER ISSUES
All issues dealing with our new venture and the Dominica Republic have been entertained through the content of the booklet.
VI. BIBLIOGRAPHY
1. Encarta (n.d.) Retrieved November 15, 2004 from
http://216.239.39.104/search?q=cache:abzV3_ADkm4J:encarta.msn.com/encyclopedia_761563569/Dominican_Republic.html+dominican+republic+natural+resources&hl=en&start=9
2. Jeanne (n.d.) Retrieved December 2, 2004 from
http://www.cnn.com/2004/WEATHER/09/18/jeanne.ap/
3. Library (n.d.) Retrieved October 20, 2004 from
http://lcweb2.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+do0031)
4. Sice (n.d.) Retrieved October 10, 2004 from
http://www.sice.oas.org/Trade/domrep_e.ASP
5. Theodora (n.d.) Retrieved December 5, 2004 from
http://www.theodora.com/wfb2003/dominican_republic/dominican_republic_geography.html
6. Threats (n.d.) Retrieved October 14, 2004 from
http://www.state.gov/p/wha/rls/rm/14327.htm
