Milestone One Guidelines:  Introduction and Broad Strokes of the Expansion Plan

Overview: For this first milestone, due in Module Three, you will provide an overview of the company you have selected and a brief analysis of both the domestic and the prospective foreign market you are proposing the company expand into, and you will analyze the microeconomic and macroeconomic factors and exchange rate factors that must be considered as the company seeks its expansion.

Prompt: First, review the required resources provided in the first three modules of the course. Using the Final Project Template, write a paper and submit under the Final Project Milestone One section.

The following critical elements must be addressed:

Introduction: This section of the analysis paper is an opportunity to add context about the company and country you selected to make the focus of this paper.

You may explain a specific product that is being launched or relaunched in the global market; that information would also be included in this section.

Note: Refer to the Module One Short Paper: Final Project Company Selection and Preliminary Recommendations to assist you in completing this section.

A. Justify your company selection. Describe your selected company: its country of origin (headquarters), its business, and the industry it is in. As a reminder, the company should be publicly-listed and have financial statements listed with the SEC; the company should also be multinational-that is, it does business in foreign currency and hedges its foreign currency risks.

B. Justify the country into which your company will expand. Explain why your selected company wishes to expand to this country. Keep in mind the following: try to select a country where the product is not currently sold; you can select any country as long as you can clearly justify your reasoning.

In some cases, it might be hard to find a country that the company does not have any presence (e.g., McDonald's). In this case, try to find a country without a specific product the company has on the domestic market.

Section 1: Broad Strokes of the Expansion Plan. In this section of the paper, you will explain the impact a variety of factors have on a company when expanding into global markets.

Explaining these factors will prepare you to address the risk factors they create.

A. Describe the microeconomic and macroeconomic factors in the domestic market.*

B. Describe the microeconomic and macroeconomic factors in the prospective global market.*

C. Analyze the exchange rate regime in both domestic and prospective global markets. For example, do they have a fixed exchange rate or floating rate? Is it determined based on basket of currencies, etc.?

D. Explain how changes in economic factors impact exchange rates. One example of an economic factor is inflation. If domestic inflation increases, what would happen to the exchange rates? Use your particular foreign market to demonstrate. Be sure to consider other economic factors
besides inflation in your answer.

E. Analyze the financial impact of exchange rate movements on a corporation. For example, if a U.S. multinational corporation is selling its good in a different market and the U.S. dollar strengthens, how would that impact the corporation's finances? Would there be less or more revenue?

F. Explain the main risks and benefits of the proposed expansion. In other words, how would the company benefit from going into this particular market and what risks could it face from a financial point of view?