The paper “ Modes of Entry in the Foreign Market for the Leather Manufacturer and the Franchise Model as the Best One" is a spectacular version of a case study on business. The company which deals in leather goods is looking towards entering into the United States because of the great opportunity presented by the country. The growth in leather products and the increasing orientation of people towards these products is forcing the company to look towards expanding its reach. For this, the company is looking towards different opportunities presented by the United States after evaluating the microeconomic policies and the other factors which will ensure smooth operations in the United States.
The report thus presents the manner in which the company should look towards entering the United States so that it is able to grow its business and operation by ensuring maximum return and growth opportunity. Purpose of the report To identify the macroeconomic policies of the United States to find the opportunity it presents for leather goods To identify the entry mode which will be best suited to ensure quick growth and help to capture the United States leather market To identify different factors by conducting macroeconomic analysis and other research to garner the potential the United States presents for the leather industry. US Leather IndustryThe US leather industry is one of the biggest leather industry and the US imports the majority of leather products.
It is the largest importer and imports around 23% of the world leather products. (US Market, 2007) When we look at the consumption in terms of expenditure it stands at $27.9 billion presenting a huge opportunity for the leather manufacturers. A break up of the different products imported highlights that US imports around 28% shoes, 27% leather clothes, and 7.8% fur with leather.
This makes the per capita consumption to be $680. The growth and more trendy leather products are bound to make the rate grow further thereby making more people purchase the different products available. The US on the leather front has various friars and trade shows where different products are displayed and helps the manufacturers get a good return on their investments. With the growth and cheap products available with the booming leather industry elsewhere in the world, the United States is bound to make its presence felt in every market as it consumes a huge quantity of leather products. Macro-Economic Policies prevalent in the United StatesThe macroeconomic policies have been designed in a manner that gives utmost importance to the growth and timely check-in the policies ensures they are able to keep with the world markets.
This can be seen from the following. The government policy to decrease the case rate to 4.5% on global cues helped to ensure demand and fight the global recession.
(Neville, 2010) Looking from the financial angle the government policy to ensure guaranteed return on deposit and maintaining liquidity helped them fight the liquidity crunch. The fiscal policy was also such that it ensured that national debt reduces thereby supporting the growth and creating jobs. The fiscal policy drafted by the United States also supports growth. The recent fiscal stimulus further acted as a boost to the macroeconomic policies and enabled the government to increase consumption demand from the household. The strong banking sector reforms also ensured that the sector was profitable despite slow down worldwide.