International Business

1. My question would be, how would you facilitate gathering the supplies to build the batteries? How would you also facilitate training employees with multiple languages within a specific area?

2. Expanding FedEx Ground’s operations into a developing economy in Africa presents unique challenges and opportunities across the Cultural, Administrative, Geographic, and Economic (CAGE) distance framework, as outlined by Carpenter, M. et al. (2018) in “International Business”

• Cultural Distance: One significant element under this attribute would be language differences. In many African countries, multiple languages are spoken, including local dialects and colonial languages such as French or English. For FedEx Ground, effective communication with customers and local employees may require translations or hiring staff fluent in these languages to ensure smooth operations.
• Administrative Distance: Regulatory environment differences pose a challenge under administrative distance. Many African countries have varying customs regulations, tariffs, and bureaucratic processes that can significantly affect logistics and operation costs. FedEx Ground would need to thoroughly understand these regulations and possibly adapt its business model to comply with local laws and customs procedures.
• Geographic Distance: The logistical challenge of physical infrastructure, such as the quality of roads and the availability of airports or ports, highlights the geographic distance. In some developing economies in Africa, the lack of developed transportation infrastructure could impact the efficiency of FedEx Ground’s package delivery services, necessitating alternative strategies or partnerships with local carriers.
• Economic Distance: Differences in consumer income levels and economic stability are critical under economic distance. Given the varying economic conditions across African nations, FedEx Ground might find disparities in market demand for its services. Tailoring pricing strategies and services to align with the purchasing power and specific needs of consumers in the target country would be essential for market penetration.

By carefully analyzing and strategizing around these elements of the CAGE distance framework, FedEx Ground can better prepare for a successful expansion into a developing economy in Africa.

To effectively manage and overcome these distance challenges, FedEx Ground may need to implement several adjustments:

1. Local Partnerships: Engaging with local logistics and delivery companies can mitigate the challenges posed by administrative and geographic distances. These partnerships can offer invaluable insights into the local regulatory environment and provide existing infrastructure for distribution.
2. Flexible Pricing Models: To address economic distance, adopting flexible pricing models that reflect the purchasing power and preferences of consumers in different African markets is crucial. This might include tiered service options or localized pricing strategies.
3. Customized Services: Tailoring services to meet the unique needs of each market can improve competitiveness. This could involve developing specific delivery solutions for rural areas or offering value-added services that resonate with local consumers.
4. Technology and Innovation: Investing in technology to improve operational efficiency and customer experience can help bridge the gap. Technological solutions like advanced tracking systems, mobile applications for easier parcel management, and drone delivery in hard-to-reach areas might prove beneficial.
5. Capacity Building and Training: To address the administrative and geographic challenges, FedEx Ground could invest in training programs for local employees and partners. This approach ensures that the workforce is knowledgeable about both the company’s operational standards and local market dynamics.

By implementing these adjustments, FedEx Ground would be better positioned to overcome the distance challenges identified and successfully establish its footprint in the African logistics market.

3.1) What is the business? This doesn’t need to be a company name but rather a description of the specific line of business to be undertaken in this other country.

My most recent company was an Ice cream distribution company where we had a partnership with a large-scale consumer goods company and a few other companies to supply and distribute ice cream products to accounts and clients such as gas stations, convenience stores ice cream shops, and trucks, entertainment centers, and more. Our partnership with the consumer goods companies allowed us to install upright or chest freezers at no further cost for these accounts to store and sell products as well. If we were going to expand as another distribution center into one of the developing economies in an African country, there would be various factors and elements to consider before moving forward.

2) Identify and explain at least one element for each of the 4 distance attributes of the CAGE framework that could affect the success of this business. Be as specific as possible. 3) What types of adjustments might the business need to make to overcome these distance issues?

Despite that entering a new market in a developing economy as an ice cream distribution center may or may not be the most practical, by using the CAGE framework we can help strategize when entering. For the first element, culturally, we would have to consider taste preferences. We would have to factor in a variety of different selections that we order from our partners to stock our inventory as certain flavors and style preferences may vary drastically. We would also have to factor in religion and any other eating or dietary habits. On the administration end, it would be essential to have permission for trade agreements to be able to import and distribute with our partners. Currently, we operate by delivering our products by truck drivers or we do allow pick-up orders as well, expanding into another country we would have to heavily consider geographically what is obtainable along with their infrastructure for transportation and distribution. Economically, we would have to estimate the size of the ice cream market in these developing target countries and the growth potential. It is vital to consider how we would target our consumers, obtain new accounts, and how these accounts would sell to their customers. Being a distribution center, this is not a type of organization we could realistically and purposefully expand. We would have to expand to another distribution center allow our partners to oversee this as we are a smaller-scale DSD distributor, or dedicate a new department focused on the international growth of our company. If this were then to proceed, collaborating with local partners, investing in infrastructure, and adapting to the new packaging and marketing approaches would be key beginning points to mitigate the issue.

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