Assignment 1: Entry into Foreign Market

Assignment 1: Entry into Foreign Market

Determine which institutional and risk factors must be considered and whether they support entry or not.

There have been several kinds of risks associated with starting business operations in Myanmar (formerly known as Burma). This is because of the political tensions that were present in the country because of the violence caused by the military ruling. Though, the military ruling is finally over, yet, there are certain kinds of other threats that cannot be ignored, along with the opportunities that have opened up. For example, by suspending a controversial dam project, the Burmese government has made a new step towards the West and its domestic opposition, the risk of creating tensions with China, its traditional ally (David, 2001). The energy giant China Power Investment Corp (CPI) was built on the Irrawaddy River in Kachin State (North), the Myitsone dam whose electricity was primarily for the Chinese.

Thein Sein, President of the new regime "civilian" Burmese announced his suspension to "respect the will of the people". Environmentalists denounced a proposed $ 3.6 billion dangerous, according to them, for biodiversity. Aung San Suu Kyi had requested reconsideration of a project that became a symbol of the struggle for greater autonomy for ethnic minority Kachin. While fighting erupted in June between the army and rebel Kachin Independence Army for (KIA), this decision allows Thein Sein to "reach out to the Kachin, full of doubt against the hypothesis of a resumption of civil war", said Renaud Egreteau, Burma specialist at the University of Hong Kong (David, 2001).

It also responds to "the excitement that Myitsone activist raises within civil society" Burma. However, listening to grievances of a population under the yoke of the military for more than half a century is a strong demand in the West (David, 2001).

United States and European Union impose sanctions for nearly fifteen years in Burma protest against violations of human rights. The overtures of Naypyidaw are still too fragile for them to be lifted immediately. But the international community has not less warmly welcomed the suspension. After disputed elections in November, the release of Ms Suu Kyi and the convening of parliament, power remains in control of the army. Gradually, Myanmar opens west. They "think they will make new friends and that sanctions will be lifted," says Gareth Price, the British institute Chatham House (David, 2001). But it will not be without pain for Beijing staunch ally for decades, a permanent member of the Security Council of the UN. Publicly, the Asian giant has shown restraint after the suspension of the dam, calling Naypyidaw to "protect the rights" of its business. But the geopolitical maps may be redistributed, said Sean Turnell, an expert on Myanmar at Macquarie University in Sydney (Dittmer, 2010).

Burmese "trying to get out of the shadow of China", he noted, while Beijing was "accustomed to obeying leadership in Burma, which allowed him access to more or less unhindered access to mineral resources and energy" (CIA, ...