Introduction Direct investment is considered to be an international method of trade in which a company gets an opportunity to establish a new foreign subsidiary company in a foreign country. Given the fact that KW dt Ltd has succeeded in exporting its products as a result of low manufacturing costs and increased demand for its products overseas its decision to invest in a manufacturing plant in Singapore will expand the business network (Belverd & Marian, pp. 133-156, 2007). Through this method, KW dt Ltd will gain a direct market entry into Singapore hence expanding the existing market for its digital products.
Since KW dt Ltd is considering to invest in Singapore as a way of expanding the existing market for its products overseas, it is necessary that the company considers various accounting as well as business issues before establishing its operation in Singapore. Business issues The first business issue which should be considered by KW dt Ltd is competition edge from both established digital multinational companies as well as other domestic firm’s in Singapore. Singapore is one of the countries which has a strong competition edge when it comes to digital products as compared to other countries due to its excellent reputation, good network and infrastructure as well as sophisticated banking systems.
Additionally, Singapore is believed to be one of the countries which has centralized services in terms of information technology, Finance and Logistics (Craig, pp. 34-56, 2007). The centralization of such services tends to provide multinational companies involved in Digital business with more benefits such as low operating costs. This in turn leads to high profits margins leading to consistent service levels, developed infrastructure for investors hence attracting more investors into Singapore hence attracting competition between the companies.
It is therefore important that KW dt Ltd put in place proper strategies to deal with competition from other digital companies in Singapore before establishing its operation. This may include putting in place proper pricing strategies, advertising as well as product quality (Craig, pp. 34-56, 2007). The second business issue which should be considered by KW dt Ltd is issues related to legal and political environments of both the host country which is Singapore and domestic country which in this case is Australia.
Given the fact that KW dt Ltd is established in Australia and intends to expand its operations overseas by investing in Singapore then, it implies that KW dt Ltd is bound to both the legal laws of Australia as well as Singapore (Charles, pp. 158-170, 2007). Different countries have various kinds of legal systems which imply that the legal system of Australia is totally different from that of Singapore and how it applies to businesses (Ramachandran, pp. 7-90, 2007). Corporate laws regulating foreign companies in Singapore should be given a great consideration by KW dt Ltd as these laws affect many elements of marketing strategies in terms of product restrictions, pricing, packaging, quality control as well as specifications.
Political systems of the two countries should be given a heavy emphasizes since unstable political situations tends to expose businesses to various risks including unstable foreign interest rates. KW dt Ltd therefore should put in place proper strategies to curb any changes in government regulations which may present a threat to the company operations (Yasmin, pp. 66-70, 2007).
Additionally, it is necessary that the company puts in place necessary modifications to the existing marketing strategies in response to political and government regulations.