5.7.3 Asia
Opportunities
Since there is no formal economic integration in the area (ASEAN is informal), the opportunities are still country-specific. However, the prospect of APEC or another trading bloc leading to economic integration should be sufficient encouragement for firms to establish in-country facilities wherever this is possible. Joint ventures are encouraged by the governments of China , Malaysia and Indonesia . India may also be a contender for future participation in an economic bloc: its market size suggests it is worth building into future planning now.
Threats
In the short-term (say within one to two years) Japanese entrepreneurs, who already have a stake in many, if not most, Asian countries, can be expected to resist competition from Australia and other countries. However, some Japanese firms are perceived as exploitative, so competition might be welcomed by host governments. Another threat lies in the fact that many Australian business people are also perceived by Asians as exploitative.
Triad strategies may be appropriate for doing business in the three major trading zones which currently dominate global business. However, it would be short-sighted if your MNE strategic planning did not take account of the potential for developments in economic integration in other parts of the world. These would make Ohmae's (1985) triad strategy much less important than it seems at present.
This seems an appropriate spot to read the remainder of Hill's (2005) Chapter 8 and an excellent article that helps tie this chapter together. Although the article is written from a UK membership of the EU perspective it is useful because it discusses the potential benefits and losses of regional integration by using a broader framework than just trade which includes economic, political, cultural and social aspects.
In your text
Hill 2005, Chapter 8, pp. 292-295.
Reading 5.5
Floyd, D. 1997, ' UK membership of the European Union: Establishing a framework for analysis', European Business Review , 97 (2), 63-67.
Activity 5.3
For revision purposes, prepare a table that lists the advantages and disadvantages of regional integration. The article by Floyd (1997) will provide a useful foundation on which to base the list.
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