Professor instruction:
For this project the focus is on creating the idea for your own MNE. Create an idea for your own
MNE to conduct international business. Your idea should be simplified to the degree that you
could possibly implement it someday. However, your idea should also be sufficiently creative to
be successful if done properly. The idea for the company must not have been used by prior
UWW students in the previous semesters. Your idea should focus on one product, one
country, and one foreign currency, since many MNEs are focused in this manner when they
are first created. So that you can recognize the issues regarding exchange rate risk that are
discussed throughout this course, you should assume that you will receive foreign currency when
selling your product. Your idea should be for a small MNE instead of a large MNE because even
most large MNE began as small firms.
The following questions will help you define your MNE idea:
For this draft proposal, each team MUST address the following questions:
1. What is the product that you plan to sell?
2. What foreign country do you plan to target?
3. How will you sell the product in that country? (i.e. through a distributor? by mail?)
4. Is there any evidence that consumers in that country would buy this type of product?
5. Do you need to purchase supplies or to hire labor?
6. Will any expenses you incur from producing the product be in dollars or some other
currency?
Notes:
Most of the question have been answered by other team member as shown below. All what you have to
is the following things only:
Answer question 5 & 6 only.
( half page maximum ).
Read questions 1 to 4 to help you answer question 5 & 6.
Question 1 What is the product that you plan to sell? Our MNE will assemble, market, and sell care packages for college students. Buyers will be able to choose from a number of different themed packages, each containing a stated mix of candy, snacks, drink mixes, and funny or useful trinkets. Each package will be available in two different sizes and will contain a personalized note from the sender (if they choose). Sample theme options include “Exam Survival Kit,” “Happy Birthday,” “Starving Student,” and “Thinking of You.” We will not manufacture any of the individual contents other than the personalized note inside each one. Instead, we will purchase the food and trinkets in bulk and assemble them in the US. Question 2 What foreign country do you plan to target? Canada would be a great choice for this product, because Canada has the highest percentage of college graduates in the world at 55.8% of the population of the country (the population of the United States of America with a college education is 30%). Also Canada is the world's 10th largest economy (based on US dollars at current market exchange rates) and has a per capita income of $31,639 which means the parents of college aged children should have money to buy their children the care package that we offer. Canada is also a strong economy because over the year, since January 2012, the Canadian Dollar ($C) has only fluctuated by 7 cents to the US Dollar, between 1 Canadian Dollar equals 0.96 US Dollars and 1 Canadian Dollar equals 1.03 US Dollars, which will give us stability in the foreign exchange market Question 3
How will you sell the product in that country?The care packages will be sold via the internet. Our MNE will operate a website that showcases the different package options and takes customer orders. The website will also allow buyers to enter their personalized message. The marketing for our product will be targeted at the parents and relatives of Canadian college students. The orders will be shipped directly to the students from the United States via USPS International Shipping (First-Class Mail International). None of the items included in the packages will require an export license. They will be shipped in small cardboard boxes. Question 4 Is there any evidence that consumers in that country would buy this type of product? Canada has a population of 34,931,000 citizens, which means that 19,491,500 have a college education and the population in Canada is expected to grow around 1% between now and 2050. This would put the population in 2050 at about 42.5 million and the amount of college graduates at, if the percentage of people with a degree doesn't increase which it is expected to do, 23,715,000 a 21.67% increase in college graduates. At the moment the highest amount of money a person would pay for college in Canada is around 6640 US Dollars, which leaves plenty of room for parents to buy our care package for their students based on the per capita income of Canadian citizens. Also this idea is already in effect in the United States with MyDormFood.Com and seem to be doing pretty well in the Southern United States. Also Amazon.com, who we can claim our business is emulated after, has a big presence in Canada and keeps making more money with last years net sales around 48,077,000,000. With the success of these two companies both in and out of Canada I believe that it would be a good region to open our business. Question 5 Do you need to purchase supplies or to hire labor? Question 6 Will any expenses you incur from producing the product be in dollars or some other currency?