A Business Plan Of Overseas Markets Expansion For HS

Under the background of the economic prosperity, the communication cable industryhas achieved great progress owing to the government investments on infrastructures.However, excessive investments on the communication cable industry causeoverproduction, increase the homogeneity of products manufactured by differentcompanies, and reduce the profits of the entire industry. HS Technology Co.Ltd (behereafter referred as HS), a private enterprise which has2.6billion production capacity,barely enjoys a net revenue of less than0.1billion. Therefore, HS makes the decision ofexpanding oversea markets in order to gain a better development of the company.First, the author chooses the Brazil markets as the target market for HS, and analyzesthe economy, politics, and culture of Brazil, the trade relations between China and Brazil,and the telecommunication cable markets of Brazil. Second, the SWOT Analysis has beenadapted to provide a comprehensive interpretation of Hansen. The conclusion has beenreached that active investment policy should be conducted by the company. Third,comparing different modes of oversea markets entry and combining market entry theoriesboth in economics and management, FDI (Foreign Direst Investment) is the optimalmethod for the company. HS will accommodate itself to the new Brazil market in arelatively short period of time by establishing the joint ventures with local enterprises. Asa result, a promotion chain will be established relying on the strength of the localenterprises, as well as the risks of exploring the oversea markets will be relatively reduced.The estimate investment for the joint project is11million dollars, and the static paybackperiod of investment is2.92year with a positive NPV (Net Present Value). The gross netprofit for the project for5years is approximately16million dollars.Last but not least, the author provides several strategies to tackle the main risks ofexpanding the oversea markets concluding management risks, the market risks, thefinancial risks, and the exchange rate risk.