International market entry and development in Russia Personal Computers

Essay by alf007University, Master'sB, July 2009

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COURSE ASSIGNMENT inInternational MarketingTopic:International market entry and development in RussiaPersonal ComputersTable of Contents1Executive summary32Russian market52.1Political / Legal risk52.2Corruption82.3Economic92.4Socio - cultural112.5Technology / Geography123Personal computers Subsector123.1Competition154Possible strategy for Market Entry and development165Bibliography201EXECUTIVE SUMMARYA country with macroeconomic stability, effective market, sound financial institutions and economically favourable political system is a good environment for multinational company (Cateora, Gilly, & Graham, 2009). Western-style companies require supportive institutional arrangements, taxation and legal frameworks, and an approving culture and ethics to do business (Jones, Fallon, & Golov, 2000).

Russia, in a contrast is a country with risky political system characterized with corruption and oligarchy. To do business in Russia the company needs to learn how to bribe Russians officials and conduct business by providing from time to time personal favours. Even though many European companies become experts in bribing Russian officials (Fey & Shekshnia, 2008) to do so is illegal and immoral. There are no rules while dealing with corruption and the rule of law does not apply.

As the company does not have any guaranty that a corrupt government official will not change his mind and ask for more, or will not provide the service, to deal with corruption is risky with no long-term development certainty. Is it really worth doing business in Russia like this or is it better to move to another market? Everything points that the opportunity is too great to miss it. The example of many European companies in Russian market shows that dealing with corruption and oligarchy is not necessarily bad if you play the game and you know the right people.

Rivalry in PC market in Russia is moderate (Datamonitor, Dec2008) and forecasted growth in PC sales make this market very attractive for the Market entry. The Russian market is big and fast growing so the benefits overweight the risk.