Legal Environment Analysis

1. Describe the legal environment of the target/host/foreign country (same as the project), making specific references to

– the rule of law (to what extent is the country governed by law as opposed to arbitrary decisions of individual government officials)

and

– laws that govern foreign direct investment (for example, are there provisions to attract foreign direct investment, such as tax incentives, most-favored-nation treatment, dispute resolution fora; or provisions that restrict foreign direct investors such as high local content requirements or currency exchange restrictions).

2. Discuss challenges and opportunities for American investors posed by the legal environment.

3. Based on the challenges and opportunities you have identified through your research, formulate two recommendations, with your supporting arguments, to an American investor to successfully navigate the country’s legal environment.

 

Sample Solution

used around the world. It had been announce recently that Internet address are to allow non Latin character as addresses, this means in future, Chinese character forming the web address is highly possible [Choe, 30 Oct 2009]. While the impact of this is still uncertain, but company that market target country using non-Latin character as language like China and Japan will definitely need to adapt to this change.

4.0 Industrial Analysis

4.1 Threat of new entrants

The airline industry require a huge capital investment, with at least millions of capital required before any business process, it is estimate that the company require approximately $1 of capital to generate $1 of revenue. It would require a lot of logistic works, highly skilled personal such as pilots, aircraft technicians and specialise managerial personnel which are often limited in resources in the industry. Limited access to airport and route are also another difficulty post to new entrant [Calingo. 1997]

As the Asia Pacific region move toward free trade and deregulation of airspace, more opportunity are created. Since introduce by America Southwest Airlines in 1973, Low Cost Carrier (LCC) have gain popularity and proven to be profitable [Uherek, 2006]. Many new companies had been form to provide this service around the Asian region around 1990s, currently Asia region have over 60 of such LCC mainly offering short distance flight within same country. Some of these airlines have started to offer long haul budget airline, for example Air Asia had introduce Air Asia X in 2007 that offer flight from Malaysia to London, Australia and India [Kent, 5th Jan 2007]. Although these Low Cost Carrier (LCC) were not yet considered as a direct competition to SIA as the target market for these airlines is more for cost conscious traveller, it is possible that in not so distance future, these

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