Globalcompose.com sample research paper on energy

1. Sample Research Paper on Fictional Multinational
Enterprise: Kickert Global Energy Enterprises
globalcompose.com/business-studies/sample-research-paper-on-fictional-multinational-enterprise-kickert-global-
energy-enterprises/
1. Introduction
Alex Kickert in Chicago founded Kickert Global Energy Enterprises (KGEE) back in 1976.
He established the company with the hope of supplying high-quality oil products across the
United States. He, however, had to commence business operations within Texas before
establishing supply chains in other states including Illinois. During the initial stages of
setting up the company, business rivals believed Kickert’s business vision was not
sustainable. The business venture, however, succeeded in producing and supplying quality
oil products. Initially, Kickert had to hire five employees who were in charge of packaging,
transporting and supplying of the product. Within three years, the KGEE expanded
substantially and hired 120 employees. The decision to hire the large group of fresh talents
was prompted by the company’s rapid increase and expansion. More so, Kickert had
acquired oil extraction equipment and an oil field at that point. Thus, the company was
capable of extracting and supplying the product to a wide range of loyal customers across
the country at low operational costs.
In a recent interview with Business Weekly, Kickert discussed the factors he believed made
the company continuously succeeding, growing, and expanding internationally. He asserted
that he established the company with the vision of supplying quality oil products to the
nation. Currently, the company supplies the product internationally to several nations like
India or Philippines, not to mention African countries. It has managed to expand operations
worldwide and established branches in Asia, Europe, and Africa with the parent company
in the U.S. This report focuses on how KGEE can supply oil to Mexico, which enables the
analysis of trade issues between the U.S. and Mexico.
2. Trade Issues between the U.S. and Mexico
Through the administration of the president-elect Donald Trump the U.S. government has
initiated civil discussions with Mexico about trade imbalances and other relevant issues
(Arcega, 2017). The government believes that Mexico has taken advantage of the country
for a long time, which results in trade deficits. The measures implemented to secure the
borders between the two nations have also been insufficient. It is, however, evident that
bilateral trade in goods and services between both nations has been massive. For example,
more than five hundred billion dollars were recorded in 2015 through the bilateral trade in
goods and services between the two nations (Arcega, 2017). The United States Trade
Representative Reports affirm that total exports to Mexico amounted more than two
hundred and sixty billion dollars (Arcega, 2017). Conversely, Mexican imports to the U.S.
were slightly above three hundred billion dollars. Therefore, this affirms that the U.S. was
left with a trade deficit of at least forty-nine billion dollars (Arcega, 2017).
3. Why Mexico?
1/5

2. Being the third-largest supplier of goods imported to the U.S., Mexico is also the second-
largest export market, which supports more than one million employment opportunities in
America. NAFTA has led to the rise of the U.S.’s exports by 468%, which accounts for
nearly 16% of the country’s overall exports (Arcega, 2017). Economists, however,
acknowledge that trade between the countries is quite complicated. Regarding the KGEE, it
is striving to commence operations of supplying oil products to Mexico in large quantities.
Therefore, such a situation makes Mexico the largest market and the closest trading
partner of the company (Arcega, 2017). However, the current renegotiations on trade deals
under the new presidential administration have been adversely affecting the KGEE’s
operations and activities. For example, Mexico has created a continental supply chain with
Russia and Canada. Consequently, the KGEE has had to reduce the prices of the product
in attempts to maintain the operations aimed at establishing a supply chain of oil from the
U.S. to Mexico. Thus, the KGEE is now competing with Russian and Canadian oil refinery
companies, which are likely to disrupt the business relationship that has not yet
established.
4. Company’s Mission and Vision
The company’s vision is to supply oil while improving the standards of living within the
Texas region. This vision serves as the desire to improve economic, social, living and
health conditions. Similarly, the company’s mission is to sustain economic activities and
corporate social responsibilities, such as helping poverty-stricken communities by supplying
them with water and other basic commodities including medicine and food. Consequently, it
can motivate the community members to get educational opportunities and seek
employment to improve the current conditions within their societies.
5. The Company’s Overall Global Strategy.
KGEE has successfully implemented its strategy aimed at expanding globally by ensuring
its corporate objectives are met in a timely manner and effective human resource practices
are applied. KGEE believes it is vital for a business venture to establish clear formulation
and implementation of both long-term and short-term objectives. Thus, the KGEE’s
business objectives are nothing else but precise results that the corporation strives to attain
within a specific period.
Therefore, Kickert and the board of directors establish the company’s global objectives
annually. This approach guarantees that the KGEE takes sufficient measures to pursue its
global strategy and accomplish specific organizational goals internationally. The company
has also strived to identify investors and stakeholders that can assist the KGEE to attain
consistent growth and global expansion. Furthermore, the company is keen to ensure it
does not attain global expansion by means of compromising the ability to fulfill consumer
needs and wants.
Therefore, the roles of the employees are determined by the annual objectives the
company strives to attain (Damodaran, 2008). Thus, the KGEE ensures that its goals and
objectives are communicated clearly, which guarantees that the employees identify,
understand, and pursue the company’s state of direction to attain global success by
establishing trading relations with countries like Mexico. More so, the clearly defined
2/5

3. objectives assist employees in identifying measures needed to create synergy while
planning, coordinating, controlling, managing, and organizing functions and operations
aimed at attaining the global success of the company. KGEE has also acknowledged that it
is crucial for employers to understand the objectives of the company well and be able to
determine, evaluate, and assess the overall operations and functions of the global business
entity.
6. SWOT Analysis of the KGEE’s Decision to Move Product into Mexico
Strengths
Mexico implements measures aimed at reforming the nation’s economy, mainly in the
energy sector. Consequently, the U.S. Congress manages security between the U.S. and
Mexico borders while focusing on the ongoing bilateral efforts promoting economic
competitiveness. Congress believes the economic competitiveness will increase regulatory
cooperation and help pursue efficiency of the integration between the two nations. This
resulted in the launch of the U.S.-Mexico High-Level Economic Dialogue (HLED) back in
2013. It helps business entities to determine economic and commercial priorities. More so,
it encourages annual meetings held by leaders from the public and private sectors who
seek to benefit socioeconomically (Villarreal, 2016). KGEE, therefore, believes HLED can
align regulatory principles between the two nations to develop bilateral initiatives aimed at
improving border management. Consequently, the company can establish a profitable
trading relationship with Mexico.
Weaknesses
Since Mexico’s President took the oath of office on December 1, 2012, he has successfully
implemented some socioeconomic and sociopolitical reforms. For example, he has ensured
the private sector is open to private investment, which counters monopolistic practices that
the KGEE has been pursuing in attempts to ensure an increase in the quantities of oil
products imported to Mexico. The president also endorsed an active international trade
policy. The policy aims to increase Mexico’s trading activities with international markets
(Villarreal, 2016). This policy threatens the KGEE’s trading objectives annually. Currently,
the KGEE does not guarantee that it will attain its annual objectives aimed at establishing a
profitable relationship with Mexico by the end of 2017. This is because the new presidential
administration of the U.S. is likely to sever further the relationship between the two nations
if trade barriers are introduced.
Opportunities
Mexico is the third-largest trading partner of the U.S. and vice versa. More so, Mexico lists
the U.S. as the largest source of Direct Foreign Investment (DFI). This proves that both
nations have maintained strong economic ties over the past few decades, especially since
NAFTA was signed. While the economic effects of NAFTA have been limited in both
nations over the past decades, there is no doubt that these effects have been positive. For
example, the costs to some sectors have been adjusted in both nations enabling supply
chains between the countries to work together and create goods (Villarreal, 2016). The
3/5

4. KGEE, therefore, believes NAFTA is an opportunity for the company to commence and
expand the trade of oil products and create vertical supply relations along the border of the
two countries.
Threats
Currently, all trading activities occurring between the two nations are conducted on a duty-
and barrier-free basis under NAFTA. Negotiations are ongoing regarding Trans-Pacific
Partnership (TPP). The proposed TPP may affect the trade relations between both nations
and influence cross-border investments and trading activities. After TPP was signed as an
agreement on February 4, 2016, many economists believe it might change the rules
governing trade and investments. For example, the agreement is likely to change how
intellectual property rights are protected and the way government procurements are made
(Villarreal, 2016). The KGEE, therefore, feels that the TPP agreement is likely to exert
influence on workers’ rights and services’ trade. More so, the U.S. president-elect might
rely on the agreement to introduce trade barriers prompting the company to incur expenses
while exporting products to Mexico. Ultimately, by establishing a trading relationship with
Mexico the company faces the threat of experiencing an increase in operational costs
coupled with low returns.
7. Mode of Entry
Mexican companies actively seek for the best financing options and strive to get exclusive
agreements that allow being flexible. The KGEE has identified various entry strategies that
can compete with local companies. The company will rely on the product and service
strategy. It will, however, have to employ the United States Commercial Service (the
U.S.CS) to assess Mexico’s potential of oil products. The U.S.CS is an agency handling
exports on behalf of several local companies in the U.S. Therefore, this agency can consult
the KGEE on export strategies that will help the company to conclude lucrative business
agreements with Mexico. It will also assist in identifying potential clients and partners within
Mexico. This strategy, however, will hinder the KGEE to export its products directly into
Mexico. Thus, it has to be prepared to give the agency a greater control over its brand and
operations in Mexico.
The Eclectic Theory is based on the assumption that business ventures ought to avoid
transactions in open markets when private transactions incur lower costs (Wruck, 2008).
Through the three-tiered frameworks, the KGEE will determine if it is beneficial to pursue
the DFI in Mexico. Foremost, the company will open offices in prime locations providing a
competitive advantage. This has prompted the company to focus on opening offices in
Mexico City, Monterrey, and Guadalajara. The company is also keen to reap ownership
advantages. As a result, it has patent rights to the name of the product being introduced
into Mexico. Thus, the U.S.CS agency will not have the power of changing the brand’s
name or quality as production rights will remain with the company. Finally, the company will
benefit from the internalization advantages while relying on the U.S.CS agency to work out
different market locations across Mexico. This is because the KGEE believes it can meet
the new market’s demands by managing its production without necessarily outsourcing and
contracting local producers in Mexico.
4/5

5. 8. Other Issues
There are number functional areas that are likely to be affected after the KGEE establish a
trading relationship with Mexico. Foremost, the marketing strategy applied by the company
will have to be reviewed to ensure it captures the needs of Mexican consumers. It has to
regulate the financing activities within the company as well. The regulations are vital as
they will determine if the decision to gain entry into Mexico will be viable economically.
Thus, the company will carefully use financial resources required to gain entry.
Furthermore, the KGEE is ready to pull out if it ascertains the move is not advantageous for
the company, either in the short-term or long-term. The company’s legal and financial team
will also keenly follow TPP’s regulations as they are likely to influence workers’ rights in
Mexico. Finally, it will advise the financial team to set-up financial kit that will address
unpredicted events, such as political unrest that can arise in case the new presidential
administration in the U.S. adversely affects the trading relationship with Mexico. The kit will
also address natural disasters likely to encumber entry into Mexico.
9. Conclusion
In conclusion, there is no doubt that the KGEE should pursue efforts to gain entry into
Mexico. However, the top management of the company must be aware of the fact that the
new market may exert adverse influence upon the company’s vision, mission, and
objectives, and be ready to withdraw from the market in case that happens. For example,
the process of establishing a trading relationship with Mexico should not interfere with the
relations that the KGEE maintains with other foreign markets across Asia, Africa, and South
America. Ultimately, the KGEE should ensure the new global strategy attains socio-
economic and political advantages.
References
Arcega, M. (2017). US trade with Mexico is a complicated issue. VOA News. Retrieved
from http://www.voanews.com/a/united-state-trade-with-mexico-complicated-
issue/3695967.html
Damodaran, A. (2008). The origins of growth: Past growth, predicted growth and
fundamental growth. Stern School of Business.
Villarreal, M. A. (2016). U.S.-Mexico economic relations: Trends, issues, and implications.
Washington, DC: Congressional Research Service, Library of Congress.
Wruck, K. H. (2008). Private equity, corporate governance, and the reinvention of the
market for corporate control. Journal of Applied Corporate Finance, 20(3), 8-21.
5/5