Country Risk and Strategic Planning Analysis Paper: Target

Essay by jarretmiranCollege, UndergraduateA, February 2007

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Many U.S. company's are looking to become part of the global market by either building in foreign countries or purchasing existing companies and then changing it to the U.S. company name. To do this the company must do an analysis of the risks involved in the chosen country and develop a strategic plan that will work for everyone involved as an acquisition progresses. This paper will look at the risks and assessment of Target, Inc opening a store in Japan.

Political, Legal, and Regulatory Risks

Japan is a bureaucratic country. It has a complex network of regulations, permissions, procedures and authorities with approval procedures for many things, which don't necessarily require approval in other countries. Many of these restrictions are designed to bar new-comers entering into the country's existing industries. This will not be the case for the Target Corporation.

The political, legal, and regulatory risks of opening a Target in Japan vary.

Target's plan is to acquire an existing retail store and move it under the Target brand. Target is in no way threatening to the political climate in Japan. Legally, the risk associated with opening the store could be great. The company must make sure that it is in compliance with rules and regulations regarding the store and merchandise stocks. Target must also make sure that the retailer it is acquiring has not had any illegal irregularities in the past. Customers might always associate that company with Target and risk a loss of business.

Exchange and Repatriation of Funds Risks

Exchange rates and repatriation of funds needs to be considered with Target opening a store in Japan. By acquiring a retail store already in existence, Target could possibly inherit its distribution channels and suppliers and reduce exporting costs. Pricing will also be a factor. If the company...