Saputo Venture
Selling products or services in another country can introduce a company to huge markets and increase their gains. Besides, it reduces the risks of a company operating only on one market and extends the life cycle of a product. In this case, Saputo is looking for a new market into Philippines through Foreign Direct Investment. This involves direct ownership of facilities in Philippines. As such, Saputo will do a transfer of resources including technology, capital as well as personnel. I believe the market entry Saputo should use should be joint venture. This is because this market option will not involve the use of huge resources and capital hence the company will pick easily with an already existing company (Killing, 2017). Besides, Saputo will be able to utilize the available labor instead of spending more time to hire more specialist in the market. Since a joint venture may at times be marred by disagreements, it is important that Saputo capitalizes on the advantages that come with the partner company to at least have a foundation in the market. If things go awry, it will be easy for Saputo to stands on its own.
The most appropriate company that Saputo should do a joint venture with should be a company that conducts the same business with them. It will ease procurement cost as well as the initial capital Saputo should have used. Some of the main reasons why the company should be chosen include the existence of business, existence of an agreement, ability to share profits, have a good relationship with the relevant authorities as well as the company should be registered with the government of Philippines. When picking a business partner, Saputo should also look for one with varied strengths. For instance, Saputo can be good in sales while the partner company is good at executing actions at the operational level. This shows varied strengths that can be useful for both companies. Should one of you decide to leave to avoid things like arguments, the partner Saputo chooses should be ready to honor contracts as well as valuation procedures.
One of the main reasons why Malaysia would be a good investment option is because of the available tax breaks and incentives that are being offered to some key players in the market due to leveraging on internet of things and artificial intelligence (Harrison, Scheela, Lai & Vivekarajah, 2018). Also, the country implements transformation programs so effectively and ensures sustainability in the global market competitive agility. Besides, Malaysia has embraced going green and preserving the environment thus establishing a company in the country will ensure that the best environment practices are put in place. Compared to Australia, Malaysia has a vibrant environment for business. This is due to its robust economy and an excellent banking center. Recently, the Malaysian economy has had an upward trend and is expected to continue shifting upwards. As such, it economy looks so strong and it is an ideal place to invest for Saputo.
I believe that Saputo should consult a commercial lender to finance their foreign business. This is because commercial banks are less likely to invest their money in new ventures but easy for already existing ventures (Arroio, 2017). However, Saputo should also observe the normal lending regulations in the various commercial banks. This is because some governments prevent banks from investing in risky business ventures with investors’ money. However, Saputo is an already established company and will be entering a new foreign market. As such, it cannot be hard for commercial lenders to help them with financing. Besides, since it will be a joint venture, it will be easy for Saputo to pick up and pay their debt on time.
References
Arroio, A. C. M. (2017). Governance of Science, Technology and Innovation Programmes for Development Is Global Financing Getting it Right?. Institutions and Economies, 45-64.
Harrison, R., Scheela, W., Lai, P. C., & Vivekarajah, S. (2018). Beyond institutional voids and the middle-income trap: The emerging business angel market in Malaysia. Asia Pacific Journal of Management, 35(4), 965-991.
Killing, J. P. (2017). How to make a global joint venture work. In International Business (pp. 321-328). Routledge.