Prepare A Presentation On The Country Hong Kong - 6 Slides U

Prepare A Presentation On The Country Hong Kong 6 Slides Using The

Prepare a presentation on the country Hong Kong (6 slides), using the prompts below. For each section, address the following in your presentation. Students are to include presenter notes for each section. Cite scholarly sources to support your claims: Trade and Macro Economics Explain why an international business should be concerned about exchange rates. Explain if a strong currency necessarily good for your selected country’s economy. Why/why not? Entry Strategies Select an existing business in the United States. Take this same business into another market of the country you selected. Propose an appropriate entry strategy based on your market selection and how you might rethink your existing structure. What are the pros and cons of your proposed strategy?

Paper For Above instruction

Introduction

Hong Kong, a Special Administrative Region of China, stands as one of the world’s most significant financial hubs. Its unique geopolitical status and strategic location have made it a crucial player in global trade and finance. The purpose of this presentation is to explore Hong Kong’s economic environment, focusing on trade and macroeconomic factors, and to analyze strategic entry options for U.S. businesses looking to expand into this dynamic market.

Trade and Macro Economics in Hong Kong

Hong Kong’s economy is heavily reliant on open trade policies, with trade accounting for approximately 300% of its GDP (World Bank, 2022). Its free port status and minimal tariffs have fostered an environment conducive to international commerce. The city functions as a vital entrepôt connecting mainland China with the rest of the world, facilitating the export and import of goods and services (Huang, 2020).

A significant macroeconomic concern for international businesses operating in Hong Kong is the fluctuation of exchange rates, particularly between the Hong Kong dollar (HKD) and major currencies like the US dollar (USD). Since 1983, the HKD has been pegged to the USD at a rate of approximately 7.8 HKD per USD, providing stability to international transactions (Hong Kong Monetary Authority, 2023). Stability in exchange rates reduces transaction costs and mitigates currency risk, which is advantageous for businesses engaged in cross-border trade.

However, the question arises: is a strong currency beneficial for Hong Kong’s economy? While a strong HKD can lower the cost of imported goods and capital, it may negatively impact export competitiveness by making Hong Kong’s goods more expensive abroad. Since Hong Kong’s economy is export-oriented, especially in finance, logistics, and tourism sectors, a strong HKD could dampen growth prospects. Conversely, maintaining a stable or slightly weaker currency can boost export competitiveness, stimulate economic growth, and support employment (Yip, 2019). Therefore, a nuanced understanding of currency stability is vital for policy formulation and business strategy.

Entry Strategies for U.S. Businesses in Hong Kong

Consider a U.S.-based retail apparel company seeking to expand into Hong Kong. An appropriate entry strategy could be the establishment of a wholly owned subsidiary using a direct investment approach. This allows the company to maintain control over branding, quality, and operations, enabling adaptation to local preferences.

To implement this, the company may choose to set up a flagship store in Hong Kong’s central commercial districts, leveraging the city’s reputation as a shopping destination for luxury and international brands. Rethinking the existing U.S. business structure involves adapting product lines to local tastes, adjusting pricing strategies considering tariffs and import costs, and establishing local supply chains to reduce lead times and costs.

The advantages of a wholly owned subsidiary include full control, potential for high returns, and the ability to build a strong brand presence. However, disadvantages involve higher initial investment costs, exposure to local market risks, and the need for local market knowledge and compliance with regulations (Cao & Griffith, 2018).

Alternatively, a joint venture with a local Hong Kong company could mitigate some risks by providing local market insights and established networks. The pros include shared risks, local expertise, and faster market penetration. The cons involve shared profits, potential conflicts, and less control over operations (Li & Luo, 2020).

Conclusion

Hong Kong offers a lucrative and strategically advantageous environment for international businesses. Understanding macroeconomic factors, particularly exchange rate dynamics, is crucial for mitigating risks and optimizing operations. Carefully selecting entry strategies—be it wholly owned subsidiaries or joint ventures—depends on the company’s risk appetite, resources, and market understanding. For U.S. businesses, navigating Hong Kong’s vibrant economy requires a nuanced approach that balances control, investment, and local adaptation.

References

• Cao, X., & Griffith, D. A. (2018). International Business Strategies in Hong Kong. Journal of International Business Studies, 49(2), 227-248.
• Hong Kong Monetary Authority. (2023). Hong Kong Dollar Peg to US Dollar. Retrieved from https://www.hkma.gov.hk/eng/key-functions/monetary-stability/pegged-exchange-rate
• Huang, Y. (2020). Hong Kong’s Role in Global Supply Chains. International Journal of Logistics Management, 31(4), 741-758.
• Li, X., & Luo, Y. (2020). Partnering in Hong Kong: Entry Strategies and Challenges. Journal of Business Research, 112, 253-262.
• World Bank. (2022). Hong Kong SAR Data. Retrieved from https://data.worldbank.org/country/hong-kong-sar
• Yip, S. (2019). The Impact of Currency Fluctuations on Hong Kong’s Economy. Asian Economic Papers, 18(1), 45-67.