The marketing division of Lush are currently looking at potential trade in countries outside Europe or the development of current marketing strategies in those countries where they only have one outlet.
The Directors Report from the consolidated financial statements of Lush Cosmetics Limited for a year ended 30 June 2014, confirmed that there was a profit for the financial year after taxation amounting to £12,567,000 (2013:£10,546,000). Operations in 25 countries were reported for taxation purposes, along with the joint venture in North America.
Question: You work in finance management and your day to day duties involve assessing proposed investment projects to see if they meet the company’s criteria for suitable investments. Your boss asks you to complete a brief report to be circulated to the senior management of Lush advising on the opportunities and risks of investing in CHINA, including strategies to manage any potential or identified risks.
1. Be presented in a professional manner.
2. Provide some relevant background information on China.
3. Report briefly on the key identified investment opportunities in China, considering retail outlets and/or distribution and/or manufacture.
4. Analyse the key risks associated with investing in China.
5. Identify some approaches to managing the risks associated with investing in China.
Part 4and 5 should attract the majority of your attention in writing the report and should demonstrate good understanding of the risks, theories and concepts related to FDI, through practical application in China.