1. Exporting to Foreign Country
Introduce yourself and about the company.

2. Our Strategy To create Value for stakeholders.
To become cost effective.
To differentiate product (on the basis of design, quality, after sales service).
Michael Porter developed a framework of generic strategies .The strategies are (1)Cost leadership Strategy, (2) Differentiation Strategy, and (3) focus on a particular market niche. The generic strategies provide direction for business units in designing incentive systems, control procedures, operations, and interactions with suppliers and buyers, and with making other product decisions.
The ultimate goal of pursuing any strategy is to create value for the stakeholders

3. Foreign Investment Options
Viable Options:
Exports
Joint Venture
Subsidiary
Green Field Project
Merger and Acquisitions
Franchisee
Licensee
First, Australia is located in the Pacific and Asia. It is one of the most developed countries in the world. Australia has high purchasing power and life expectancy within Australia is approximately 80 years of age which is very high ( Their elderly is expected to grow approximately 10%. This growth proves to be a large opportunity for us as our product sales with the proper marketing and target market could increase with this population.
Australia is known for following business ethics. They expect foreign countries too to follow business ethics. They have strict laws, harsh punishment and the strong cultural beliefs. This could be negative for a new entrant in the Australian market.
There are various options available to do business in Australia. Since Australia is a developed country, all the options are tried and tested and are feasible.

4. Risks with International Business
Foreign Currency Exchange Risk
Country Risk
Adjustment of WACC according to the risk
Problem in calculation of Beta
If you do business in foreign market, cash flows are earned in foreign currency. Ultimately financial statements are prepared in home currency., So, international business is always susceptible to fluctuation in foreign currency exchange rate. Also, companies should assess the business environments of the foreign country. Doing business in foreign country poses certain country risk Unstable government, poor law and order, in general bad business environment, labor law etc poses risk. However, country risk in Australia is minimal.
Exchange Controls
Some of the country risks are:
Currency Inconvertibility
Some governments will not permit conversion of the local currency into another currency
Blockage of Funds
When host governments experience a foreign exchange shortage, they may block the transfer of funds back to the parent.
Currency exposure
Company should adjust its WACC according to the risk involved in the country it is venturing in.
Beta of a foreign investment can be calculated by regressing the project’s return to a benchmark market index. In fully integrated international financial markets, both the firms and the individual investors are free to invest anywhere in the world. Investors can diversify its portfolio internationally. Here, World market index acts as benchmark index.

5. Recommendation Joint Venture Benefits Spreading costs and risks
Improved access to financial resources
Economies of scale
Access to new technologies and customers
Access to innovative managerial practices
Complimentary Business
A joint venture is a strategic alliance between two or more parties to do business together. The parties agree to create a new entity together by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise as well as risk.
Since company has no experience of exporting, it should partner with an Australian company who has experience of Australian market and is aware of laws, regulations, culture, consumer preference and other factors prevailing in Australia. This way, both companies will benefit by each other’s skill set and strength. The joint venture can be for one specific project only, or a continuing business relationship such as the Sony Ericsson joint venture based on the outcome and performance of the JV.

6. Issues with JV
Differences in language, culture and management practices?
Ownership issues
Terms and Conditions of agreement
How to transfer resources and Rights (Technology, copyright, Trademark license)
Controlling and management of the JV
There are many issues related to international business. Some specific issues to be addressed when a company enters in a JV are listed here. Company should address these issues clearly before entering the JV.

7. Limitations of Strategy
loss of control over technology, copyright, license
limited ability to realize experience curve and location economies
Less brand visibility
conflicts between partners Sharing of Returns or Ownership
Lack of Trust on Partner
Inefficiency of partner
JV is a medium risk and medium return strategy. It involves sharing of ownership and profits. The alliance partner must be carefully chosen. In fact, your JV partner should be complimentary of your strength. Sometimes, a JV may be harmful for future expansion if company has big plans for the country. If company is willing to undertake big risk, JV is not the right option.

8. Strategies to Avoid Wholly owned subsidiary High Risk High Return
A wholly owned subsidiary will involve high commitment of resources as it involves capital investment like purchasing its own assets in an international country. It involves the highest risk and in turns the chances of highest return. Since company has no experience of exporting and say any kind of international business, this strategy should be avoided till company gains sufficient experience and exposure in international business.

9. References
Gilpin, R. (1986) U.S. Power and the Multinational Corporation- The Political Economy of Foreign Direct Investment
David William Carr. Foreign Investment and Development in the Southwest Pacific
Retrieved on July 7th, 2009
Retrieved on July 7th, 2009
A private entity builds and operates a new facility for the period specified in the project contract.
It will involve high commitment of resources as it involves capital investment like purchasing its own assets in an international country. It involves the highest risk and in turns the chances of highest return.