Question

In: Economics

Question 2 Manounya is a newly industrialized economy in Asia with a population of 80 million....

Question 2
Manounya is a newly industrialized economy in Asia with a population of 80
million. In the last two decades, the country has successfully transformed its
manufacturing industry from one mainly focusing on low value-adding consumer
products to a high-tech based manufacturing industry providing high-end
industrial and consumer products. The country has a large middle-class population
with an overall high level of education. Due to a very low birth rate in the last
three decades, the population starts showing a sign of aging. The Manounya
Government has successfully maintained unemployment at a low level in the last
10 years.
Using the Manounya scenario and any assumptions that are deemed necessary
and appropriate, discuss the opportunities for an Australian company specialized
in developing and manufacturing medical equipment to expand its business to
Manounya as part of its internationalization strategy and the possible risks
involved in such an endeavor.

Solutions

Expert Solution

Given the economy Manounya, there is an ageing population and though the unemployment rate is kept low , the same could not be said for future years given a low birth rate.

So the Australian firm can use this as an opportunity to expand its business in Manounya. The healthcare costs of the elderly population is much higher than the younger one. Also , assuming that the healthcare system is fairly developed, at standard costs, the Australian company can provide low cost equipments of better quality in Manounya. Once established, the opportunities for expansion would be large in Manounya, given the demographic data.

But there are risks involved as well. If the healthcare system is already well developed, it could lead to resentment among the existing healthcare professionals which could affect the quality of performance. Also if the prices of equipments and medicines are low , the government could put a ceiling in order to protect domestic producers.

Hence these are the opportunities and risks of the Australian company in


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