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firm Australia business Philippine. Some risks considered Philippine;, business environment Philippine specific firm. It . A marketing assignment format, focus specific firm. Topic: The firm work a business analyst strongly interested expanding current manufacturing sales ( domestic export) activity markets.
Globalization is an obvious trend that is catching on all over the world. Australia has also not been left behind in this. This has led to some Australian firms turning to multinational companies by opening up branches and offices in other foreign countries. They are doing this in order to increase their global sales volumes and thus be able to generate more revenue which in turn translates to a high return on investment (ROI) for the investorsSuryadinata, 2006.
The Australian firm under analysis is Miller Inc. which is a pharmaceutical corporation providing pharmaceutical products to over 54 countries around the world including New Zealand, Egypt, India, Malaysia, China, UK, USA, Canada, Brazil, Chile and South Africa. The company is looking to expand their business venture to the Philippines. As a business analyst in Miller Inc., a risk management plan is being done to analyze the foreign market situation presented by the Philippines so as to gauge the potential that is provided by this business venture Nolan, 1996.
The risk analysis will look at the political and cultural systems in the Philippines, ethical practices, legal systems, stability, economic prospects, foreign direct investments and other aspects of doing business in Philippines
(Nickles, 2002, Publications and Usa, 2007a, Publications and Usa, 2007c)
. This risk assessment will help Miller Inc. To know the prospects of the venture in Philippines and to rank and prioritize these risks in order to device the right strategic plan for the venture.
Profile of the Philippines
The Philippines is a country in Southeast Asia which is bordered by Taiwan to the North across the Luzon Strait, Vietnam to the west across the South China Sea, the island of Borneo to the southwest across the Sulu Sea, Celebes Sea to the south, and the Philippine Sea to the east. The country is the 12th most populous in the world with a population of slightly less than 94 million people and the gross national income is about U.S.$2,000. The country has a healthy workforce of about 38.9 million people. The country also has a high literacy rate with the functional literacy rate being 86.4% and the basic literacy rate being 93.4% for those aged between 10 and 64 years Llc, 2010(, McManus and Chua, 1990)
The country has strong international relations with other countries that are majorly based on trade. There are over 11 million Filipinos who are living outside the country. The country is a founding member of the United Nations (UN) and is also actively involved in the UN with it also being active in the Human Rights Council as well as peacekeeping missions. It is also a founding member of the ASEAN (Association of Southeast Asian Nations) which is an organization that strengthens the relations between the member states and promotes cultural and economic growth in the SEA (Southeast Asia) region Davidson and Studies, 1997(, McManus and Chua, 1990)
According to the Doing Business 2012 survey data which is provided by the International Finance Corporation (IFC) and the World Bank, Philippines is a lower middle income country with a doing business rank of 136. This is a slight drop from the 2011 doing business rank which was 132. The doing business rank indicates how easy it is to do business in Philippines.
The Philippines is a democratic country and is a constitutional republic which has a presidential system. This means that the country is led by a president who is chosen by a simple majority in free and fair elections. The term of the president is 6 years during which he or she is required to appoint and preside over the cabinet. The president is both the head of state and the head of government. He or she is also the commander-in-chief of the armed forces of Philippines. The country has a universal suffrage which is, however, not compulsory and only for those above the age of 18 years.
The Philippines is divided into three island groups namely Mindanao, Luzon and Visayas. These are further divided into 17 regions which give 80 provinces which give 138 cities which give 1,496 municipalities that have 42,025 barangays.
The Philippines is a relatively politically stable country. Though the government still faces threats from certain terrorist group including groups which are on the U.S. Government's Foreign Terrorist Organization list, these threats are somewhat mild since no major attacks have been made. The country has also had a long fight to capture the terrorists and to date, over 200 members of these terrorist groups have been killed and many others captured.
There is also an international monitoring team which watches over the cease-fire agreement between the Philippine government and the separatist movement known as MILF (Moro Islamic Liberation Front). This agreement was made during the reign of President Beningno S. Aquino III in the year 2011.
Therefore, the political system of the Philippines only provides a medium risk since the situation is under control and the country is trying hard to ensure that there is political stability.
The legal system of the country is a combination of Anglo-American common law and continental civil law. The present constitution which governs the country was passed in the year 1987 and bears many similarities to the U.S. constitution. However, there are certain portions of the Philippine law which are endemic to the Philippines only and do not bear any similarities to American or Spanish laws.
The country has an independent judicial system with the judicial power being vested in the Supreme Court. The court is composed of a Chief Justice as the court's presiding officer. The chief justice is assisted by 14 associate justices who are Presidential appointees from recommendations placed by the Judicial and Bar Council. The Supreme Court is the highest court of the country and it also has the powers to force and effect law. There are also other lower courts that can hear cases Gonzalez and Calingo, 1998.
The Supreme Court is given law making power in the enforcement and protection of constitutional rights, practice of law, court proceedings and legal assistance especially to those who are underprivileged. Therefore, the Supreme Court is able to make rules in these areas and force and affect them into law Pinel and Madison, 2007()
The primary source of laws in the Philippines is the Congress which has powers to enact laws. Therefore, the Philippines is a civil law jurisdiction rather than a common law jurisdiction which is based on court decisions and precedents. However, there are certain aspects of civil law jurisdictions that embrace what is passed in the courts as common law.
Though the country has a high level of disorder and criminality, these can be blamed on the economic instability of the country and other societal problems that exist in the Philippines. However, this is a medium risk situation for any international firm looking to do business in the Philippines McManus and Chua, 1990()
The culture in the Philippines is basically a combination of both Eastern and Western cultures. The country has certain aspects in their culture that are found in Asian countries such as Malaysia and also has others found in Spain and America. The country has strong Hispanic cultural influence as evidenced in the prevalence of Spanish surnames and names among the Filipinos. However, it is important to note that a Spanish name does not denote Spanish ancestry. The use of Spanish names came from a decree made during the colonial times for the distribution of family names in a systematic manner and the implementation of the so called Spanish naming system in the population Suryadinata, 2006.
There are also several streets, provinces, towns and buildings that have Spanish names.
The architecture of most towns and cities in the Philippines is the Spanish architecture. Most of these buildings were destroyed during the Second World War. However, there are some which are still standing. These are majorly churches, university and government buildings.
English is the most popular language in the Philippines and it has contributed greatly to the acceptance and use of the American cultural trends such as the love of fast food, music and film for the Filipinos. There are many Fast Food outlets in the country located mostly around corners and there are also certain American fast food chains that have huge market share. However, there are also certain local fast food chains such as Jollibee and Goldilocks which also have huge market share. Filipino is also spoken vastly in the country.
As a result of the country having these similarities in culture to the American culture, Miller Inc. should find it quite easy to sail through in the country. Also, since Miller Inc. has branches and offices in…[continue]
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