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GBU 355
Global Dimensions of Business

Mississippi Products in the European Marketplace

Lydia Risinger
May 2, 2014

Introduction:
France is Europes second largest economy, and also one of the worlds top tourist destinations.
Rich in culture, diversity, and opportunity, France provides a great location and a promising
market in which to embark on a business venture. In comparison to the rest of the world its
political, economic, and legal structures are rated average in terms of stability. Although
France has suffered somewhat in recent years due to its economy, steps are being taken to
improve the situation. When one thinks of France it is difficult to ignore the exquisite art of
French cooking. Crepes, macaroons, Ratatouille, croissants, and other traditional French staples
all make France one of the top food capitals in the world. In a country where you can find an
article on French cooking and news about the presidential election on the same page, it is evident
that the art of cuisine is a top priority. The company that is being established will meet these
needs with a Mississippi flair. The overall goal of the company is to produce Mississippi made
food items to distribute in France. These products will include wine, jellies, and gourmet sauces.
The company name will be Soiree which means party, or gathering in French. Since the
French love to entertain, and the market is already well-suited for gourmet food products, why
not introduce a bit of southern elegance.

Overview:
Political Economy and Economic Development:
According to the CIA World Factbook, France is a republic government. It has a semipresidential system, meaning both the French president and French prime minister are active in
day-to-day affairs of the country. The current French president is President Francois Hollande,

who was elected in 2012. The current prime minister is Jean-Marc Ayrault, who was also elected
in 2012. For a nearly two years Hollande has failed to take measures to turn the struggling
economy around, thus causing the politicians popularity to plummet. According to Foreign
Policy, Hollande is the most unpopular president in modern memory (Elias Groll, 2014). His
failure to jump start the economy, and his recent affair with a French actress have poisoned the
citizens view of him and his role in France. His critics have shunned him for abandoning his
socialist principles asking, What brand of socialism does the president proclaim to practice?
(Groll, 2014) This dissatisfaction with the president has led to political unrest.
In regards to political corruption, France is fairly uncorrupt compared to most other
countries in the world. It is ranked number 22 out of 177 countries. It received a score of 71, with
100 being the cleanest and 0 being very corrupt. According to Transparency International, a main
concern in France is that elected officials are not required to disclose any potential conflict of
interest with business relationships or partnerships. Another concern is that the judiciary system
lacks independence and resources, making access to classified information nearly impossible in
investigative cases. There is also a concern for political interference within the judiciary system,
being that the president appointed the public prosecutor in France. France is also somewhat lax
when it comes to enforcing anti-bribery laws.
Although the French economy is slowly diversifying, the most recent years have caused
the economy to remain nearly stagnant. The 2014 economic freedom index found on The
Heritage Foundation website, ranked France as the 70th freest economy in the world with a
freedom score of 63.5. Its score has recently dropped by .7 of a point due to declines in
monetary, fiscal, and business freedom. According to The Heritage Foundation, over the twenty
year history of the economic freedom index, Frances economic freedom has remained stagnant.

The cause of this stagnation is the governments domination in prominent sectors of the
economy. It also doesnt help that the governments spending accounts for over half of the GDP.
To make matters worse, France has also been through two back to back recessions in recent
years. However, France is doing its best to make improvements. The economy is slowly
diversifying and the government has begun to privatize several corporations, thus increasing the
openness of the current mixed economy. The start-up business process is relatively
straightforward as well, with no minimum capital required. In a recent press conference Holland
also disclosed several policies that he intends to implement in order to imperatively restore its
economic force (Sam Ball, 2014). Hollande plans on cutting public spending, reducing the
budget deficit, creating a council to oversee public spending, and enacting a responsibility pact
that will cut tax and red tape for businesses that commit to creating jobs and boosting training.
The GNI per capita according to the World Bank has slightly decreased in recent years
and is currently 41,750 in US dollars. As of 2012 France had a GDP of $2.613 trillion and was
ranked as a high income level country. Its current GDP puts it at number five in the list of
countries with the highest GDPs worldwide. According to the CIA World Factbook its PPP is
2.238 trillion. The GINI index gives France a score of 32.7, with zero being a perfectly equally
distribution. The HDI of a country is measured according to three measures: life expectancy at
birth, educational attainment, and average incomes based on PPP estimates (Charles Hill, 2011).
Frances HDI is .884. Based on Hills scoring explanation, this puts France in the high human
development division (Hill, 2011).
Hill states that the legal system of a country is influenced by the prevailing political
system (Hill, 2011). The government of a country determines how structured and free of
corruption the legal framework for that country is. Frances legal system is fairly stable

compared to other legal systems around the world. France practices civil law, meaning that
judges must adhere to a prewritten legal code rather than rely upon precedent and interpretation.
For a business, this could be negative or positive. It provides satisfaction in knowing that ones
company will always have secure and set in stone provisions for contracts, deals, etc. On the
other hand, every case is different, especially in international business. The flexibility of
common law may offer more satisfaction in knowing that laws can be interpreted to fit the
current situation. France has had some issues in the past on the enforcement of property right
laws. However, it is taking strides to increase protection and rid its system of any corruption.
The overall attractiveness of France is fairly substantial. Although it does have its quirks
it is evident that steps are being taken to improve them. In comparison to most countries in the
world France is an easy market to establish a business in. The infrastructure is there, as well as a
stable government to enforce the laws pertaining to international business. The three factors of
overall attractiveness include the benefits, the costs, and the risks. (Hill, 2011) While it may be
risky and somewhat costly, the benefits of building a company here far outweigh the potential
hazards.
Culture:
French culture is known for having lots of flavor. In such a diverse country, culture varies
by region. Paris is known for its haute couture and chicness, while other regions have a different
flair. The Bretagne and Normandy regions are known for being very friendly and hospitable, and
are closely related to the culture of England. The eastern part of the country is associated more
with German culture. The south is known as the sunny, free-living region of France, perhaps for
its close proximity to the Mediterranean. Overall, the French are stereotyped as being very
pessimistic. Many foreigners feel that the French are very prideful and ethnocentric. While this

may be true in some cases, it is important to note that the French are very passionate individuals,
which is usually associated with being rude or arrogant in some scenarios. While French is the
dominant language, there are many more language groups scattered throughout, including
Flemish, German, Arabic, Italian, Basque, as well as many regional dialects and pidgins.
The majority of the French population identifies with Catholicism, with 83-88% claiming
to be Roman Catholics according to the CIA World Factbook. Protestantism is only practiced by
2% of the population. With secularism on the rise however, religion has been placed on the back
burner in France. There are a growing number of people who claim to have no religion. Although
the majority claim to be Roman Catholic, not all are practicing. Church attendance in France is
one of the lowest in the world and the position of religion in public is also very rare. A current
issue France is facing is the growing number of Muslims. France hosts the largest practicing
Muslim population in all of Europe 6 million. Muslims now outnumber the number of
practicing Roman Catholics. According to a recent survey conducted by the French Institute of
Public Opinion, 60% of French citizens believe Islam is becoming too visible and influential in
France (Soeren Kern, 2012). While there is a push for a multicultural society, France is
beginning to see resistance towards Islam by the French people.
The French are also known for being very passionate in all aspects of life. Politically, one
is not afraid to speak ones mind or passionately defend deeply engrained beliefs and values.
French culture is very secular in nature, and there is a huge importance placed on equality. The
political philosophy of France is very centered on being one, which is a reflection of its
political motto, Liberty, Equality, and Fraternity. According to OECD statistics, social mobility
in France is fairly attainable. By leveling the playing fields in a sense, everyone is given equal
opportunities to succeed. France is also known for having one of the best education systems in

the world, with very strict standards and rigorous discipline. The grading system is so rigorous in
fact, that OECD reported that 75% of French students are continually stressed about making
good grades. French school systems recently experimented with a new grading system that had
positive effects. It increased attendance, grades, and confidence in students. In such a rigid
setting, French students are adequately prepared for higher education. This strict structure allows
the students to go on to rigorous universities and eventually become very well educated, well
rounded, and driven global citizens. Because of the tax system in France, a college education is
free for French citizens. This allows a student to become further educated, which then allows for
a higher income producing career.
According to Geert Hofstedes study and website, France scores relatively high on most of
the dimensions of culture. In power distance it received a score of 61, meaning that a fair degree
of inequality is accepted. According to Hofstede, France has one to two more hierarchical levels
in a company than other European nations. For the individualism dimension France scored a high
score of 71, showing that the French are taught at a young age to only take care of oneself and
ones family. Hofstede notes that the fact that both individualism and power distance are high is a
unique phenomenon only seen in one or two other countries. France scored 42 on masculinity,
making it a slightly more feminine society. An interesting fact Hofstede points out is that
Frances working class scored masculine while its upper class scored feminine. The uncertainty
avoidance score is 75, meaning that the French favor structure and planning over surprises. For
the pragmatism dimension it received a score of 66, which Hofstede attributes to the ability of
the French to adapt traditions easily to changed conditions. For indulgence, France scored 48,
which is somewhat surprising due to the common assumption that the French place a high
priority on the quality of life. This score suggests that maybe the French arent enjoying life as

much as the world presumes. These scores are an important factor to consider when starting a
business in France. The high level of individualism is encouraging since individualism is a
determinant in economic growth. The scores in indulgence, pragmatism, and masculinity also
prove to be beneficial to the idea of starting a company. These show that the French people are
willing to adapt to situations relatively easily, have a good work ethic, and stress the importance
of equality in the workplace. The high score in uncertainty avoidance could be positive or
negative. It could prove to be positive in that the French do not mind a little structure, however,
this could dampen the creativity of the company as well as the employees willingness to take
necessary risks.
Ethics:
In France it is a general rule that employees are hired for an indefinite period of time
unless otherwise stated in the mandatory employment contract. The employment contract must
be in French even if it is not the language spoken by both the employer and the employee. In
order for an employment to be official the employer must make a pre-hiring declaration to
French authorities. If there is no pre-hiring declaration, the employer will be fined. The average
work week in France is 44 hours, and cannot legally exceed 48 hours without prior approval.
Each employee is guaranteed five weeks paid leave each year. Employees also have a generous
maternity and paternity leave. France has an interesting practice called parent child-rearing leave,
which allows the parent to take up to three years off to rear a child. Human rights protection in
France has recently declined due to Frances failure to seek necessary reforms that would
decrease ethnic profiling and identity checks. According to Human Rights Watch, migrant
Roma living in informal camps continue to be targeted for eviction and removal from France.
However France is making improvements in other areas of human rights, such as protection

against discrimination based on gender identity. The country has a substantial air quality
monitoring network as well as an indoor air quality observatory. According to the European
Environment agency, air quality in France has significantly improved over the last several years.
The global index of air pollution dropped 20% from 2000-2009. Corruption in France is
relatively low compared to the rest of the world. It is ranked number 22 out of 177 countries. It
has had several issues with corruption within the government, however officials have taken a
stand against it and are working to improve conditions.
In order to avoid ethical violations there are several precautions that should be taken when
starting up a business in a foreign country. First, there should be lots of research done on the
ethics, standards, and current labor practices in the host country. A potential employee should
then be interviewed and hired based on his or her own sense of personal ethics. Managers should
be careful about who is chosen, and should only hire those with well-grounded values and
morals. The managers should also have high moral standards in order to provide a good ethic
example for the employees. The managers and employees should then work to form an
organizational business culture built on a strong code of ethics. With deep personal ethics as well
as a stable business culture, managers and employees should be able to make ethical decisions
when problems arise. When making decisions, managers and employees should take all factors
into consideration and be sure that the outcome will be consistent with the companys code of
ethics.
Existing Trade Relationships:
France is a long-standing member of the WTO and the European Union and continues to
be a successful international trading nation. Since it is part of the EU, trade between France and
other member states is free and flourishing. According to the Embassy of France in Washington

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D.C., the United States is currently the number one investor in France, and France is the seventh
largest investor in the United States. The trading relationship between France and the United
States continues to be largely successful. In 2012 the exchange of goods between France and the
U.S. increased 12.8%. U.S. businesses in France currently employ over 440,000 people
according to the French Embassy, making France the second largest recipient of job creating
foreign direct investments from the United States. According to the United States Department of
State, commercial transactions between France and the U.S. $1 billion per day. France and the
United States currently have a bilateral tax treaty that addresses double taxation and tax evasion.
Although the United States is not a member of the European Union, the tariff rates for imported
goods is relatively low. In June 2013, talks began between the United States and the European
Commission to discuss a potential trans-Atlantic trading agreement. This agreement would be the
largest bilateral trade deal to ever be put in place. Since the tariffs for imported goods from nonmember countries are already low, the deal would mainly aim to tackle non-tariff barriers and
ultimately establish free trade between the U.S. and EU member countries (European
Commission).
With the existing trading alliances that France is a part of, starting a business in France
should be fairly straightforward. The foreign trade market is already there, making it just a matter
of getting a foot in the door so to speak. If the business were to be started in the near future, the
imported products would result in tariff fees. However, as stated before, France and other
European nations have worked diligently to decrease the tariff rates on imports from nonmember countries. Therefore, the costs are manageable and the business would still profit. If the
negotiations between the U.S. and the European Commission continue, the impact such a treaty
would have on both economies would be tremendous. Such a treaty is expected to add

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approximately .5% to the EUs annual economic output according to statistics shown by the U.S.
Department of State. Trade relations would reach an entirely new level by eliminating existing
trade barriers. For a start-up business the benefits would be exponential. Even if such a treaty
does not come about, France is still doing what it can to increase foreign trade. President
Hollande continues to lure investors in with promises of stabilizing corporate tax rules,
simplifying customs procedures for imports and exports, and introducing a tax break for foreign
start-ups.
Ease of Entry:
Since France is a part of the European Union, it must comply with the trading policies set
up by the organization. The trade market is relatively free, however the government does get
involved in some sectors. According to The Heritage Foundation, the openness of the French
market is 82.8 out of 100. The French government tends to involve itself in agricultural
industries, the film industry, and the financial sector. Trade freedom is especially limited when
trading with non-EU members. When trading with a country that is not a part of the European
Union, trade barriers and tariff rates automatically increase. Trade with countries that belong to
the European Union typically involves fewer trading barriers as well as very low 1.1% tariff rate.
Although the French government is involved in some aspects of trade, it does not have
quite as much influence on the trading of pre-manufactured goods. In 2012, both the U.S. and the
EU signed a bilateral compensation agreement that covered several agricultural products.
According to the U.S. Trade Representative website, the agreement will establish or increase
EU tariff rate quotas allocated to the U.S. for several agricultural products. One disadvantage to
the trade of food products is the Meursing Table Tariff Codes the EU imposes on processed food.
These products are subject to a specific tariff code system called the Meursing table. These

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codes are based off of the products milk protein, milk fat, starch, and sugar content. This creates
a significant administrative burden on exporters, especially those who wish to export new
products to the EU. As far as importing wine, the Meursing codes will most likely apply. This
means that in addition to the product being taxed as a non-domestic import, it will could also
accrue an even higher tariff rate depending on its sugar content. On a more positive note, in 2006
the EU signed an agreement with the U.S. on trade in wine. The agreement stated that the
European Union must allow the entry of U.S. wine products made in accordance with
winemaking standards into the EU. This means there should be very few barriers on importing
Mississippi made wine. The main priority for the company is to comply with Frances import
restrictions and regulations. Unfortunately since it is a non-EU company, there will be higher
tariffs placed on the products. In order to successfully import these products, the company must
be sure to have proper labeling, licensing, and must abide by specific wine-making regulations.
Frances foreign trade relations are built on a firm foundation that began with its
participation in the World Trade Organization. Since joining in 1995 France has continued to be a
leading example and participator in world trade. According to Economy Watch, France is the
second largest importer and exporter in Europe, right behind Germany. France has also been very
generous in helping other countries, specifically those that are underdeveloped, expand markets
and integrate into the global economy. Since 2000, France has contributed EUR 10,077,000 to
these efforts. According to a WTO article, Frances Minister for Foreign Trade, Nicole Bricq,
stated France has been continuously supporting technical assistance and WTO training
programs aimed at developing least-developed countries. These contributions are particularly
important for promoting underdeveloped countries, improving the stability in these markets, and
enhancing the lives of people in these countries. In November 2013 France donated EUR

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1,000,000 to the Doha Development Agenda Global Trust Fund. From these actions it is evident
that France is very much involved in international trade, which directly influences the success of
its economy.
Monetary Considerations:
Foreign Exchange:
Since France is a member of the European Union, it has also adopted the euro as its
currency. The euro is freely convertible, and continues to play a supporting role within the
foreign exchange market. According to the Big Mac Index, the euro is currently overvalued by
7.3 percent compared to the US dollar. In January 2014, the average cost of a Big Mac in the
euro zone was 3.66 EUR, which is roughly equal to $4.96. As of January 2014, the average price
of a Big Mac in France was $5.15 as compared to the U.S. average of $4.62, making France a
little pricier than the euro zone as a whole (Big Mac Index). This is something that would
influence and affect the company. Since the euro is currently overvalued, there could be issues
when converting dollars to euros and vice versa. Once the products are in France there should be
no problem because transactions will only involve euros. In fact, operating in the higher valued
currency may prove to be more beneficial. However, as far as getting the business started and
importing the products, the exchange rate will be a major factor.
According to the World Bank, Frances capital account has been on a steady decline since
2009 and now equals -492,724,032 in US dollars. Frances current account value as of January
2014 recorded a deficit of 3.9 billion EUR, with a 5.1 billion deficit in goods, a 1.9 billion
surplus in services, and a deficit of .8 billion in income. France recently adopted a new
international methodology that records international merchanting transactions under goods

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instead of services (World Bank). This should result in an increase in the goods balance and a
decrease in the services balance. The current actual value of money supply in France is 1620773
EUR, as of January 2014. The value has dropped fairly significantly from December 2013 where
it reached an all-time high of 1650129 EUR (World Bank). However, it is expected to rise
throughout the rest of the year. Trading Economics has predicted that it will reach 1631504.27
before the end of the year. The average money supply in France from 1980 until 2014 is
748319.44 EUR. According to Trading Economics, the actual value is the Money Supply M2,
which includes M1 as well as short-term time deposits in banks. M1 includes narrow money,
meaning coins and notes in circulation, as well as other assets that can easily be converted into
currency.
According to the Bank of France, foreign direct investment in France dropped significantly
during 2007, reached an all-time low in 2009, but has been on a steady incline ever since. In
2011, records show that FDI earnings abroad reached 64.8 billion EUR and FDI earnings in
France reached 29.5 billion EUR (Banque de France). According to the Consulate General of
France in Atlanta, France remains the third largest destination in global flows of FDI, increasing
its overall attractiveness. Its dynamic market attracts investors, and its economic growth rate
continues to fare better than its European neighbors. It is also one of the leading EU members of
jobs created by FDI. Investments slightly slumped when Hollande took office, but he continues
to lure investors in with promises of stabilizing corporate tax rules, simplifying customs
procedures for imports and exports, and introducing a tax break for foreign start-ups.
Financing the Business:
In order to get the company up and running, it seems as if retained earnings, loans, or
investors in the domestic market would be the best resources. In order to have wine to export, it

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must be produced. Production facilities would be located in Mississippi since the products are
marketed as Mississippi made. Since this type of project is somewhat uncommon to
Mississippi, investors will either jump on board or flee from the idea. Because there are not
many wineries in Mississippi, local investors may see it as an opportunity. However, investors
could have the opposite opinion and see a Mississippi winery as a risky business investment in
this particular part of the country. While it may be hard to find investors or resources in
Mississippi, there are several organizations in other states that aid U.S. wineries in the foreign
market. In the 1980s, the U.S. Congress passed the Wine Equity and Expansion Act,
recognizing trade barriers faced by U.S. wine producers in foreign markets (Laura Ness, 2007).
After Congress passed this act, numerous organizations began developing to help wineries get a
foot into the foreign market. This change caused major growth in wine exporting. From 1986 to
2006, wine exports grew from $36 million to an astounding $876 million (Ness, 2007). Most of
these organizations are based in California, but there are a few in the southern United States as
well. By becoming involved with organizations such as these, there are greater chances of
finding domestic investors willing to invest in the company in order to get production up and
running.
The cost and time of the whole production is also a major factor to consider, especially
when presenting information to potential investors. Starting a winery requires a huge amount of
capital upfront during the first two years. To become a small-medium sized winery, Soiree will
need to produce around 10,000 cases. First things first, land and vines will need to be purchased.
In order to produce enough grapes for 10,000 cases, it is necessary to have at least fifty acres of
land and an ample supply of machinery (Jerry White). According to a financial plan produced by
Cornell Horticulture Business Management and Marketing Program, approximately $750,000 is

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needed for Year 0 of production. This includes most of the startup costs, land, machinery, and
the costs of building the facilities of the winery itself. It takes approximately seven years to yield
enough grapes for 10,000 cases and approximately $2 million for the first five years of
production. Since the first few years are spent developing the companys own personal market,
production is lower than capacity, therefore making it impossible to sell all the wine the winery
could produce. This means costs per unit are very high for the first few years (Jerry White). The
Cornell Horticulture Business Management and Marketing Program suggested an alternative
business model that might make more economic sense for a small company. It would be more
cost efficient to have an existing winery make the wine and bottle it under an exclusive label for
Soiree.
Since the primary goal of Soiree is to export Mississippi made wine to France, it should
aim to tap into the global capital market in the long run. From a borrowers standpoint, Hill
points out that within the global capital market there are a larger supply of funds for borrowers to
draw on (Hill, 2012). He also points out that the global market is far more flexible than the
domestic capital market. With foreign investors, the company would have greater access to
multiple markets, which also means greater competition. With such a diverse market of investors,
the global capital market allows for major global networking that is essential for an exporting
company. The most efficient way to get a foot in the door so to speak, is through a partnership.
By partnering with retailers, or other wineries in France, the company will not only have local
connections but also brand exposure. As the brand becomes more exposed, the companys
presence in the world market also expands. The only drawback to entering into this market
would be the fluctuating exchange rate. The only currencies that would be used for business
would be the dollar and the euro, which are both fairly strong. At the moment, the dollar is

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weaker than the euro. However, with the flip of a switch in todays market, that could change.
Since the dollar is weaker, that would mean greater exporting costs. However, a weaker dollar
also means Europeans are paying less for a U.S. product than a European product. Thus, a bottle
of Mississippi made wine is essentially cheaper than a bottle of French wine. Since consumers
usually gravitate towards cheaper products, hopefully Soiree products will catch the consumers
attention.
With wine being a very key part of French culture, there are numerous organizations and
networks within France that expose wineries to potential investors. A great place to start would
be Frances Vinexpo. This exhibition began thirty years ago in Bordeaux, a region of France
known for its wine. The purpose of the exhibition is to showcase products from all around the
world to professional buyers from multiple continents. Its purpose is to also partner with wine
and spirits professionals in order to discuss and debate ideas as well as reflect on trends in order
to anticipate changing markets (Vinexpo). An opportunity such as this would expose Soiree to a
wealth of foreign investors, giving investors a chance to greatly diversify their portfolios.
According to Hill, portfolio diversification reduces risk to less than what could be achieved in a
purely domestic market (Hill, 2012). As a borrower, this allows for exposure in the French
market; a novelty for wine producers.
From the aforementioned information, it seems as if this business venture may impossible
to establish and may leave one asking, is it even worth the trouble? A wine producer from
California, David Hirsch, gives his advice by expressing that the real opportunity for an
exclusive brand is in the international marketplace. He also states that he feels Europeans in
general have more appreciation for where their food and wine come from, and are more receptive
to the terroir message (Hirsch, 2007). The terroir message means the connection to the land

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that wineries are essentially selling through wine. While this connection to the land is not that
important to Americans, it is essential to Europeans. The idea that these products were made in a
real place, by real people, with real appreciation, makes the consumers connection to the
product itself stronger. Soiree will aim to keep this idea a central theme.
Strategy:
In order to get the company up and running, it seems as if retained earnings, loans, or
investors from the domestic market would be the best resources. However, its primary goal to
export Mississippi made wine to France, therefore it should aim to expand into the global capital
market as soon as possible. From a borrowers standpoint, Hill points out that within the global
capital market there are a larger supply of funds for borrowers to draw on. (Hill, 2012) He also
points out that the global market is far more flexible than the domestic capital market. With
foreign investors, the company would have greater access to multiple markets, which also means
greater competition. With such a diverse market of investors, the global capital market allows for
major global networking that is essential for an exporting company. The only drawback to
entering into this market would be the fluctuating exchange rate. The only currencies that would
be used for business would be the dollar and the euro, which are both fairly strong. At the
moment, the dollar is weaker than the euro. However, with the flip of a switch in todays market,
that could change. Since the dollar is weaker, that would mean greater exporting costs. However,
a weaker dollar also means the Europeans are paying less for a U.S. product than a European
product. Thus, a bottle of Mississippi made wine is essentially cheaper than a bottle of French
wine. Since consumers usually gravitate towards cheaper products, hopefully Soirees will catch
the consumers attention.

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Structure:
In order for Soiree to become a successful exporting company, it has to have the appropriate
structure that will fit the companys needs as well the needs of the partners and consumers in
France. The best way for the company to initially expand abroad will be to group all international
activities into an international division. Then the products produced domestically will be
exported to the foreign subsidiaries to be sold in France. This organizational structure will be an
efficient way to keep domestic manufacturing separate from the international business side of the
company. In practice, this strategy does have its downfalls. Sometimes foreign subsidiaries are
not given as much voice in the organization as the heads of domestic functions, and there is also
an implied lack of coordination between domestic operations and foreign operations (Hill, 2012).
Since Soiree is operating on such a small scale, and will only be exporting to one country instead
of many, hopefully these problems will not arise. A smaller company makes it easier for
everyone to have a voice, and also enables domestic operations and foreign operations to keep
closer contact and reduce the possibility of miscommunication. As the company grows and
becomes more diverse it may be able to take on a more complex organizational structure.
Recommendation:
Based on the research done over the course of this semester, Soiree is able to safely enter
into the French market. France is politically sound and economically strong enough to provide a
stable environment in which the company can successfully operate. Since France is also a
member of the European Union and uses the euro as its currency, there is an added level of
stability. The euro has increased in value over the past few years and still remains strong.
Assuming that product production is already up and running in Mississippi, it is in the companys
best interest to first devise and export plan that targets the strengths, weaknesses, opportunities

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and threats that the company could potentially face when entering the foreign market. It should
also include the goals of the company, how those goals should be met, and the time it will take to
reach those objectives. The next step would be to find local business owners in a particular
region that are willing to become potential buyers of Soirees products. These foreign distributors
are a cost-effective way to get products into a foreign market, because the company will now
have both local connections and local expertise at lower costs than the average investor would
receive. The final steps would be to make a financial and logistics plan, to determine the costs
needed and the transportation required to ship the products to France. Once these plans are
created, the company is ready to export.

References

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