Influence the host countrys institutional environment

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Reference no: EM133269460

Institutional theory suggests that while institutions can influence a firm's strategic decisions and actions, the entry and strategic behavior of a firm, such as a well-resourced multinational company (MNC), into an emerging economy can shape and influence the host country's institutional environment.

The top management of Starbucks as it plans to venture into a new market in a hypothetical, newly formed country, classified as an emerging economy - the Republic of South Zetland (SZ).

Starbucks will be the first MNC to do business in SZ since SZ declared independence from a larger Asian country in 2005. SZ is an agricultural-based economy and a top producer of premium-quality coffee beans globally (accounting for 5% of world coffee production in 2021).

Question 1: Starbucks has been planning to gain more control or bargaining power over the supply chain of relevant raw materials essential to its global business operations.

Question 2: SZ is a fast-growing emerging economy dubbed by Time Magazine in 2021 as the next golden hub of agricultural and food production business opportunities in modern Asia.

Question 3: The World Bank noted that SZ, a new democratic country, is a highly adaptable country that is committed to undertaking radical social, political, and economic reforms to align itself with the leading economies in the world and actively engage with and participate in world socio-economic affairs.

Question 4: SZ is predicted to become one of the top countries in Asia in terms of ease of doing business in the next five years, according to the World Bank Ease of Doing Business Report.

Reference no: EM133269460

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