1.If you are working as a consultant for Coca-Cola, how does the dismissal of th

Question

1.If you are working as a consultant for Coca-Cola, how does the dismissal of the deal by the Chinese government affect your continued investment in the country?

2.What more could private business, like Coca-Cola, do to convince the government that new enterprise can bring positive economic development to the country?

3.Is the prospect of China’s sheer volume of potential customers too good to pass up? Or do the government and the country’s recent stock market woes indicate a signal that investment should be reconsidered?

Explanation / Answer

ANS 1=Since the Huiyuan deal has been dismissed, Coke should target its energies on widening the reach of its prevailing brands in China and on coming up with new brands, also in the juice sector. The juice market in China has enormous potential and more & more persons will consume natural juices whenever their income permits. Coke has several options left-It can carry on alone/ acquire a smaller Chinese producer/ become a minority owner of few existing juice firms.

ANS 2= For a developing country such as China, foreign investment is a primary way to drive development & pull the nation's economy toward a competitive position in the global market. However, for FDI to happen, particular conditions must be in place. FDI represents capital invested in a nation which gives production & service abilities for both native customers & world markets. It is instrumental in bringing commodities to the global marketplace, moreover foreign investment influx not only denotes investor confidence in the business & in the the geopolitical climate of the host nation, such capital also links up national economies.

ANS 3=There are several ongoing social & economic reforms in China which address matters like reducing governmental intervention, permitting markets to determine price levels, & enhanced welfare. These alterations tend to take baby steps frontwards , but in aggregate they are actually altering the Chinese investment landscape to one wherein private entrepreneurs & firms can further thrive. Overall, I understand there are macro challenges, but realize that these are usually overstated . The Chinese economic model is changing & slower growth seems to be the ‘new norm,’ but it is still growing nevertheless & a conducive environment in which innovative firms can thrive.

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