Question

IN YOUR OPINION, WHAT IS THE FUTURE FOR GLOBAL BUSINESS IN IRAN ? FROM AN ETHICAL STANDPOINT SHOULD WE EVEN INTERACT COMMERCIALLY WITH THAT TOTALITARIAN REGIME ?

WAL-MART IS CONSIDERING A PROSPECTIVE JOINT VENTURE WITH RAKUTEN TO COMPETE WITH AMAZON BOTH IN THE E-BOOK AND IN THE ONLINE GROCERIES CATEGORIES.(IN THE U.S. AS WELL AS IN JAPAN )

WHICH FACTORS WOULD EFFECT THE SUCCESS OF THIS VENTURE ?

Answer 1

FUTURE FOR GLOBAL BUSINESS IN IRAN

Iran despite being embroiled over its internal issues has been an investment destination for many European companies.Many players are making huge investments in a country like Iran where political instability has always been a great risk .These positive factors include possible waiving of nuclear-related sanctions by US administration which means the doors to free trade will be opened once again to a country which has been long isolated.However mere lifting of economic and trade sanctions will not booster the foreign inflow of funds,a conspicuous environment of deep trust and stability must follow.Iran with its rich Oil,natural gas and even rare minerals treasure is a storehouse of energy.With an economic growth rate of 12% , Iran remains a hot investment destination.

From an ethical viewpoint,we have to consider the following before taking a decision:

1.What is the human development impact due to improved trade and commerce with Iran

2.The Peace and stability of the region and nearby areas (Iraq,Pakistan etc.).If improved financial conditions can propel sustainable economic and fundamental growth.

3.The Iranian State's willingness to shun weapons of mass destruction and join the fight against terrorism.

If the merits outweigh then possible commercial activities can propel sincere growth and long sustained peace for Iran as well as other nations.

WAL-MART IS CONSIDERING A PROSPECTIVE JOINT VENTURE WITH RAKUTEN

Rakuten, Inc. is a Japanese electronic commerce and Internet company based in Tokyo and founded in 1997 by Hiroshi Mikitani. Its B2B2C e-commerce platform Rakuten Ichiba is the largest e-commerce site in Japan and among the world’s largest by sales.

Wal-mart being a giant retailer will directly benefit from the prospective joint venture with Rakuten.However the following factors will effect the success in this venture:

• How much level playing will be the venture? As the business interests of both the organizations are colliding and often competitive , the common goal needs to be set clearly.
• Exploring local synergies between Rakuten in Japan and Walmart in US.
• Technology roadmap- How the orders will be taken without affecting each others' business interests?
• Rakuten's e-book store has a great collection which can compete with Amazon and Walmart will be offering these services in US.The vision of revenue sharing and cost sharing between the two giants is going to drive the entire scenario.
• How Wal-mart and Rakuten will adapt to each other's cultural diversity and customs? The faster the synergies happen , success will show up.
• Possibility of Wal-Mart acquiring Rakuten or vice-versa in long term.
• The support from the employees in the transition state of both the companies.
• International trade regulations,geo-political stability and legal environment will also influence the venture.
• The primary aspect would be how both companies will be able to synergize without crossing the limits