The Globe: The Promise and Peril of Russia's Resurgent State Executive Summary
The Globe: The Promise and Peril of Russia’s Resurgent State
Executive Summary
The case highlights the complexity raised for potential companies to invest in Russian market due to resurgent of state. A lesson learnt from three illustrated companies is the ignorance of state interest, failure to understand political ideology and governmental intervention could shrink the business strategy. The emerging threat raised from change in political ideology has created challenge of preparing an effective business strategy to enter into the Russian market. The expansion plan of company in Russian market should include align with right partners, good government relation through lobby and understanding national interest for preparing business strategy. For the successful implementation of business strategy, company should have clear understanding of local environment, cultural sensitivity, economic challenges, etc.
Strategic Issues Involved
Russia, one of the emerging giant markets, is influenced by political dynamics and nation’s ideology. The factors such as governmental intervention, volatile economic growth, changes in nation’s interest, shift in political ideology from capitalist to centralization, etc. create complexity for multinational companies in making investment decisions. For the potential investors, the strategic issue involved “Is Russian market feasible for investment; if yes, how to craft successful business strategies to cope up with its complexity?”
Strategies to Deal with Those Issues
Based on the identified issues, the following strategic alternatives are identified: * Lobby with the Government
Russian Government plays significant role through its intervention on trade policy that affects business operation. The company needs to understand the political dynamics and its intervention. They can lobby with Russian Government for investment friendly environment asking for development of infrastructure to modernize its economy and society. *
Executive Summary
The case highlights the complexity raised for potential companies to invest in Russian market due to resurgent of state. A lesson learnt from three illustrated companies is the ignorance of state interest, failure to understand political ideology and governmental intervention could shrink the business strategy. The emerging threat raised from change in political ideology has created challenge of preparing an effective business strategy to enter into the Russian market. The expansion plan of company in Russian market should include align with right partners, good government relation through lobby and understanding national interest for preparing business strategy. For the successful implementation of business strategy, company should have clear understanding of local environment, cultural sensitivity, economic challenges, etc.
Strategic Issues Involved
Russia, one of the emerging giant markets, is influenced by political dynamics and nation’s ideology. The factors such as governmental intervention, volatile economic growth, changes in nation’s interest, shift in political ideology from capitalist to centralization, etc. create complexity for multinational companies in making investment decisions. For the potential investors, the strategic issue involved “Is Russian market feasible for investment; if yes, how to craft successful business strategies to cope up with its complexity?”
Strategies to Deal with Those Issues
Based on the identified issues, the following strategic alternatives are identified: * Lobby with the Government
Russian Government plays significant role through its intervention on trade policy that affects business operation. The company needs to understand the political dynamics and its intervention. They can lobby with Russian Government for investment friendly environment asking for development of infrastructure to modernize its economy and society. *
References: Book Daniels, John. Radebaugh, Lee. Sullivan, Daniel, Salwan, Prasant. (2011). International Business: Environments and Operations. Pearson. Website Retrieved on December 4, 2012, from https://publications.theseus.fi/bitstream/handle/index.html Retrieved on December 3,2012, from http://topics.nytimes.com/top/news/international/countriesandterritories/russia/index.html