Week 3 New International Venture BUS638
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International Expansion: New Venture
Hailey Jackson
The University of Arizona Global Campus
BUS 638: International Business
Instructor: Moustafa Ahmed
June 26, 2023
2
Introduction
Expanding a company internationally is no small feat. There is much to consider and to expect when business plans are being arranged. In just five years, Jackson Wealth Management will be expanding to a new country; three host countries have been selected that are Luxembourg, Singapore, and Germany. In this report, a brief background of Jackson Wealth Management will be provided along with an analysis of the viability, mode of entry, and challenges that relate to each of the three host countries. Company Background Jackson Wealth Management (JWM): the new wealth management company that will be expanding by 2028. Wealth management companies offer comprehensive financial advice to clients with high net worth, reducing stress and arranging choices based on time constraints. They consider all financial factors and help organize finances, ensuring clients reach their financial goals. The company has grown since 1924 from merely 7 employees to over 5,000 now. The organizational structure is bureaucratic due to the need for consistency, organization and strict procedures that allow continuous business and growth. The bureaucratic management located in JWM follows formal rules, structures, and processes, with clear hierarchy and expectations for employees, with managers enforcing rules and maintaining order (Indeed Editorial Team, 2023). JWM expands by completing acquisitions of already established firms in other states, which is the same strategy that will be used to expand internationally. Acquisitions work well for the company because of the time and care put into each situation. As Peng (2023) states, inadequate screening and zero achievement of strategic fit are the primary pre-acquisition problems. JWM is required to complete the due diligence each time there is an acquisition.
3
Another issue that may come with acquisitions is failure to integrate, which is during the post-
acquisition. Some companies do not put an effort or thought into cultural differences and barriers
that may arise. Jackson Wealth Management requires a connection to the acquisitions, a blooming network of individuals all around the world. The company also prioritizes having a diverse and multilingual integrations department located at the headquarters to ease the transition
and make everyone feel welcomed. Host Countries Luxembourg is the first of the host countries. Luxembourg offers stability, diverse financial services, and investor protection, making it an ideal location for offshore wealth management. With no restrictions on non-resident bank accounts, Luxembourg offers exceptional investor protection and meets Jackson Wealth Management standards. Luxembourg, a landlocked nation in western Europe, boasts a stable economy and ranks as one of the wealthiest countries in the world in terms of GDP per capita. Its skilled multilingual workforce and well-developed transportation infrastructure make it easy to conduct business. Companies are required to understand the nation's laws, rules, and regulations to succeed. Luxembourg's strategic location and business-friendly regulations also make it desirable to global businesses. Some of the advantages include information and communications technology, developing biotech industry, and solid banking/financial services (CT Corporation Staff, 2020). Expanding a
business to Luxembourg is challenging, mostly due to numerous steps involved, including incorporation which takes at least 4 weeks, obtaining a business license that will take 2 weeks with added requirements, securing credit remains complicated due to limited available information, construction permits that can take up to 157 days, and property registration which
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4
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5.
2
0.2
2.
3.
5.
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0.2
3.
0.1
4
0.1
1.
4.
4.
3
Incentives
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3
5.
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