Wednesday, December 23, 2015

Module Name: International Business

OPEN UNIVERSITY MALAYSIA
FACULTY OF BUSINESS AND MANAGEMENT
BBNG 3103
INTERNATIONAL BUSINESS


Name: Adam Khaleel


Lecturer: Izmeera Shiham
Learning Centre: Villa College



Trimester:  September 2012

Contents

Executive Summary

The concept of international business is very important to all the businesses especially the local businesses such as Kooddoo Fisheries Maldives Ltd. The purpose of this assignment is applying the concept of international business to Kooddoo Fisheries Maldives Ltd in order to venture into the oversea market. The first part will give a brief introduction about Kooddoo Fisheries Maldives Ltd. Secondly, the PESTEL analysis of Sri Lanka, China and Japan will be discussed. The PESTEL analysis will be used to analyze the political, economical, social, technological, environmental and legal factors of these three countries. Thirdly, the impact of the business environment in these three countries will be discussed. Fourthly, a discussion will be given on how this company could overcome the problems and threats that may face in these countries. Finally, a conclusion will be given by covering the major points in this assignment.

Introduction

The concept of international business is important to all the businesses especially to the local businesses which are going to operate in abroad. The purpose of this assignment is applying the concept of international business to Kooddoo Fisheries Maldives Ltd in order to venture into the oversea market. This assignment firstly, will give an introduction about Kooddoo Fisheries Maldives Ltd. Secondly, the PESTEL analysis of Sri Lanka, China and Japan will be discussed. Thirdly, the impact of the business environment in these three countries will be discussed. Finally, a discussion will be given on how this company could overcome the problems and threats that may face in these countries.
Kooddoo Fisheries Maldives Ltd is incorporated in June 2010 with a strong tagline of “we fish one by one” and their main operation base is in Kooddoo Fisheries Complex. They have become the main company in the skipjack tuna operations in the country. They have the capacity to buy fish from across the nation with the help of its fleet of vessels. Besides, they are engaged in the operation and management of ice plants located across the country. Also water bottling operations are done in their processing center (Kooddoo Fisheries Maldives Ltd: Home, 2012).
It is very important to have a good vision and missions for any business organization in order to be a successful business in the market. However, Kooddoo Fisheries Maldives Ltd does not have any vision or mission until now. Hence, this will be a big issue for them when they are going to operate in foreign market.
Kooddoo Processing Center has a land based freezing capacity of 450 MT/day with 2000 MT storage capacity together with their fleets of collector vessels. Meantime, they have a Katsubushi plant with a capacity of raw material usage of 8 MT/day. Furthermore, they have capacity to accommodate vessels up to 120 m. Today, they are the leading company in the collecting and processing of skipjack tuna nationwide (Kooddoo Fisheries Maldives Ltd: Home, 2012).
 
They have variety of products including canned tuna, dried products and other products. Canned tuna include Chunks in oil 185g, Chunks in Brine 185g, Flakes in Oil 185g, Flakes in Oil 185g and Mackerel in brine 200g. Dried products include Mugurimas 70g, Mugurimas 250g, Himmune Mugurimas 70g, Himmune Mugurimas 250, Valhomas 1kg and Masfothi 150g Packet. The other product includes Ratu Garedhe 380g – Bottle (Kooddoo Fisheries Maldives Ltd: Product Category, 2012).
The major export products are frozen whole-round and GG tuna together with Katsuobushi. Frozen tuna is processed by blast or brine freezing whole-round or gill & gutted tuna. The main frozen type includes Skipjack tuna and Yellow fin tuna. The major markets of frozen tuna are Thailand and Iran. These products are manufactured by Thai companies by using fish exported by Kooddoo Fisheries Maldives. Kasuobushi is smoked and dried product of tuna loins processed in a fashion to suit the tastes and style of the Japanese market and the major component of Katsuobushi is skipjack tuna (Kooddoo Fisheries Maldives Ltd: Exports, 2012). 
They have given a major importance to ensure health and hygiene standards with the factory by adhering to the principles of “Hazard Analysis and Critical Control Point” (HACCP) and “Good Manufacturing Principles”. As a result their products have enjoyed and continue to enjoy with a good reputation of Quality in all their major Markets (Kooddoo Fisheries Maldives Ltd: Product Category, 2012). 

PESTEL Analysis of Sri Lanka

Political System:
Sri Lanka is a democratic, socialist republic and a unitary state which is governed by a semi-presidential system, with a mixture of a presidential system and a parliamentary system. It constitutes a parliamentary system governed under the Constitution of Sri Lanka (PESTEL Analysis of Sri Lanka, n.d.).  
Sri Lanka has gone through a changing political scenario over the years and especially after the end of the civil war in 2009 and has gained a considerable political stability as the present government has a majority in the parliament. However there is a concern that too much power is centered among few individuals in the present governing regime and politicians have interfered with the businesses and the policy has changed either to assist or restrict business operations (PESTEL Analysis of Sri Lanka, n.d.).  
Legal System:
The Legal system of Sri Lanka is a mixture of several laws from Rome and England, Holland and South Africa, Arabia, South India and old Ceylon. Sri Lankan Legal system is influenced by English common law and Roman-Dutch. In addition, the law is influenced by the ancient local system of laws of Sri Lanka. The fundamental legal framework is all most similar to the law of England (PESTEL Analysis of Sri Lanka, n.d.).  
In recent years in Sri Lanka, there have been many significant legal changes that have affected firms' behaviour due to the introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle. In addition, the executive powers of the president have interfered with the local and international businesses. Sri Lanka has a strong labour policy which clearly stipulates the working hours, age limits, prohibition of child labour, industrial safety and the salaries are paid monthly (PESTEL Analysis of Sri Lanka, n.d.).  
In the annual Corruption Perception Index (CPI) in 2010, Sri Lanka was placed in 91st position among 178 countries. In 2011 Sri Lanka was placed at 97 among 180 countries (PESTEL Analysis of Sri Lanka, n.d.).  
Economic Factors
The economic crisis in 1997 in East Asia had a greater impact on the Sri Lanka economy as a result they had devalued the currency to match the global change (Kelegama, 2009). Sri Lanka is recognized as a fast growing middle income country and has a yearly gross domestic output of US$64 billion in 2012. It was recorded a GDP growth of 8.3% in 2011 and the per capita income has doubled since 2005.During the same period, poverty has dropped from 15.2% to 7.6%, and unemployment has dropped from 7.2% to 4.9% (PESTEL Analysis of Sri Lanka, n.d.).  
In 1977 the free market economy was introduced to the country, incorporating privatization, deregulation and the promotion of private enterprise. The nation has moved steadily towards an industrialized economy (PESTEL Analysis of Sri Lanka, n.d.).  
Sri Lanka has listed as a transitive economy, from factor-driven stage to efficiency-driven stage, ranking 52nd in the global competitiveness and 41st in goods market efficiency. Dow Jones classified Sri Lanka as an emerging market in 2010, and Citigroup classified it as a 3G country in February 2011.Sri Lanka ranks well above other South Asian countries in Human Development Index with 0.658 points (PESTEL Analysis of Sri Lanka, n.d.).  
Social Factors
Sri Lanka has a population over 20 million people. Life expectancy at birth is 75 years, and is close to the estimated lifespan in the developed countries. The literacy rate of 92.5% has helped the nation to build a skilled labour market. More than 67% of the population is in between 15 to 64 years old (PESTEL Analysis of Sri Lanka, n.d.).   
After the war, with the rapid development of private financial sector, many young people have engaged modern trends and fashion by spending large amount of money for pleasure and beauty. The growing number of TV channels and other digital mass media networks are a good sign to show such developments taking place in the changing attitudes and consciousness of people (PESTEL Analysis of Sri Lanka, n.d.).  
Technological Factors
Sri Lanka has an A and B class road network exceeding 12,000 kilometers. The railway network is operated by the state and the railway is 1,447 kilometers long. Recently they have opened Southern Motorway has link Colombo and the down south. In addition the government has taken many steps to repair and develop the countries road network after the war (PESTEL Analysis of Sri Lanka, n.d.).  
Sri Lanka has around 2 million internet users in 2011 and telecommunication is one of the fastest growing sectors in Sri Lanka. Sri Lanka's cellular subscriber base has shown an amazing 550% growth from 2005 to 2010 (PESTEL Analysis of Sri Lanka, n.d.).  
There are a total of 461 patents had been registered with the National Intellectual Property Office of Sri Lanka. The growth trend of a patent is a clear indication of the rising interest of innovators in protecting intellectual property (PESTEL Analysis of Sri Lanka, n.d.).  
Environmental Factors
Sri Lanka enjoys a tropical climate with varying temperatures according to location. Coastal or upland areas benefit from Cool Mountain or sea breezes throughout the year. Monsoon season is between May to September in the South & West and October to April in the North & East of the country. Temperatures average 27°C in Colombo and 16°C in Nuwara Eliya (PESTEL Analysis of Sri Lanka, n.d.).  
However with the increased number of development projects, there are many issues such as deforestation, pollution, filling the marshy lands etc. Sri Lanka is near to the equator and has a tropical rainy climate have influenced the life pattern of Sri Lankans greatly (PESTEL Analysis of Sri Lanka, n.d.).  
Although there are some challenges in Sri Lanka’s market, Kooddoo Fisheries Ltd can overcome most of these challenges and can set up their business easily in this market.

PESTEL Analysis of China

Political Factors
China has a Socialist system in their political system and the government has full control all the activities.  The only political party in China is Chinese Communist Party (CCP) and other eight nominally independent small parties are controlled by the CCP. There are no large political opposition groups in China. The government is moderate and stable. They have effective and non-transparent, complex and inconsistent policies, laws and regulations in the country (Valkjärvi & You, 2012).
Economic Factors
During the Asian Financial Crisis, China suffered relatively few harmful effects and almost all the other Asian currencies were devalued except Yuan. They have provided $4.5 billion to the IMF to overcome the crisis economies (Mainland China and the Asian Financial Crisis, n.d.).
China is a member of World Trade Organization (WTO) and has business freedom in the country. The economy is open and tight, some restrictions are on foreign investments (Valkjärvi & You, 2012). They have loosened trade policy in export and import. They have moderate corporate tax rate and high income tax rate in the country. The government encourages the multinational corporations and foreign direct investments. They have moderate inflation rate. They also have mixture of free market and controlled market systems. The Chinese economy is affected by challenges from the European economic crisis that could badly affect its growth rate, regional disparity, and growing environmental concerns (RAWLANI, 2011).
Social Factors
China is the world‘s most crowded country and the estimated population in July 2012 was 1,343,239,923 people. Today, the country has one child policy for each family in order to improve the education system. China has large gap between the poor and the rich people (Valkjärvi & You, 2012).  The Chinese population consists of 56 ethnic groups and the Han ethnic group is the largest. There are many unmarried children in their 20‘s and 30‘s are still living with their parents. The literacy rate in 2010 was 92.8%. The religions in China are Buddhism (50%), Taoism (30%), and Chinese folk religions & others (Muslim 1.5-2%, Christian 3-4%). The official language of China is Putonghua (Mandarin). The population of China is so great that Mandarin is spoken by over fourteen percent of the people in the world (RAWLANI, 2011).
Technological Factors
Recently, China has a rapid development in science and technology (Valkjärvi & You, 2012).  In 2011 there were 500 million internet users and in 2010 there were 15.251 million internet hosts. China Telecom alone serves 55 million broadband subscribers and Tianhe-1A is the world’s fastest supercomputer. China has deployed pebble bed nuclear reactors which is cooler and safer than conventional nuclear reactors (RAWLANI, 2011).
In 2011, China developed a prototype train capable of reaching speeds of 310 mph which was the first ultra-high-speed train developed. In September 2011, the first Chinese space station module, Tiangong-1, was successfully launched. Meantime, they made the first attempt at the robotic exploration in Mars. China conducted a successful test of an anti-satellite missile (RAWLANI, 2011).
Environmental Factors
China has a variety of forest types. Hardwoods such as teak and mahogany are cultivated as commercial crops. Bamboo is a very fast growing plant which can grow up to one meter a day. An important tree found in China is the ginkgo tree which is used in Chinese medicine. It is one of the world's earliest surviving plant species (RAWLANI, 2011).
China has a wide variety of wildlife such as tigers, snow leopards, monkeys, yaks and giant pandas. The birdlife includes peacocks, parrots, cranes and storks. Cormorants are used by some fishermen on the rivers to catch fish for them (RAWLANI, 2011).
China's natural environment has been adversely affected by deforestation for many years. China has different regulations and laws in preventing pollution in the country. There is now a program of tree planting (RAWLANI, 2011).
Legal Factors
The civil law is influenced by Soviet and continental European civil law systems. Meantime, the legislature retains power to interpret statutes (Valkjärvi & You, 2012). The criminal procedure law was revised in early 2012. The labour regulations in China affect overall employment and productivity growth in the country.  The non-salary cost of employment is high. Also, China has not submitted an International Court of Justice (ICJ) jurisdiction declaration (RAWLANI, 2011).
Although there are more challenges in China’s market, Kooddoo Fisheries Ltd can overcome some of these challenges and can operate their business in this market and can have long-term advantage in future because this is huge market.

PESTEL Analysis of Japan

Economic Factors
Japan is facing its worst economic challenge since World War II. In 2008, the country entered into recession. Huge government debt of 170% Gross Domestic Product and the aging of the population are two major long-term problems facing the country. The economic forecast predicts a slow recovery started in 2010. Japan is the third largest economy globally and has a free market economy. Japan's industrial sector is heavily dependent on imported raw materials and fuels. Japan has proposed opening the agricultural and services sectors to greater foreign competition (Izhar, et al., 2012).
East Asian currency crisis in 1997 also had affected Japan. Japanese Yen fall to 147 as mass selling began and the GDP real growth rate slowed from 5% to 1.6% as a result some companies went Bankrupt (Saldanha et al., n.d.).
A 9.0-magnitude earthquake and a tsunami devastated the northeast coast of Honshu Island on 11 March 2011, washing away buildings and infrastructure as much as 6 miles inland, killing thousands, severely damaging several nuclear power plants, displacing and leaving homeless more than 320,000 people, and leaving a million households without running water (Izhar, et al., 2012).
The labour force was 65.7 million people in 2010. The unemployment rate was 5.1% and inflation rate was -0.7% in 2010. In 2011, the GDP was 3.5% (Izhar, et al., 2012).
Political Factors
Japan has a parliamentary government with a constitutional monarchy. Japan receives a score of +0.94 for the factor of "Political Stability and Absence of Violence or Terrorism". Japan is ranked 17th on the list out of 180 for Corruption Perceptions Index. Press freedom is constitutionally guaranteed and generally respected in practice (Izhar, et al., 2012).

Japanese government communications campaigns play an important role in educating the general public about health issues. These campaigns encourage the population to take responsibility for their own health, given the aging population and the rising cost of the national medical or insurance system (Izhar, et al., 2012).
Social Factors
In 2011, the population of Japan was 126,475,664 people. The ethnic groups are Japanese 98.5%, Koreans 0.5%, Chinese 0.4% and others 0.6%. The religions are Shintoism 83.9%, Buddhism 71.4% and Christianity 2%. The literacy rate is 99% of the total population. Japanese favorite foods are Rice foods, curries, seafood, green tea and 'sweets' such as dried octopus, squid and soured plums. The music of Japan includes a variety of performers in distinct styles both traditional and modern. Japanese art covers a wide range of art styles and media including ancient pottery, sculpture in wood and bronze, ink painting on silk and paper. Japanese consumers are the health aware and are willing to take actions to maintain and improve their health (Izhar, et al., 2012).
Technological Factors
Japan is well known for its automotive and electronics industries throughout the world and Japanese electronic products account for a large share in the world market. Japan leads the world in robotics, possessing more than half of the world's industrial robots used for manufacturing. Japan is also have one of the most advanced trains. Japan has also made headway into aerospace research and space exploration. Since 1973, nuclear energy has been a national strategic priority in Japan. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else. Japan’s telecommunications sector is one of the most active markets in the world. E-commerce, a subset of the Internet, has considerably influenced Japan's business outlook and marketing (Izhar, et al., 2012).
Legal Factors
The legislative power is vested in the Diet (KOKKAI), which consists of two houses which are the House of Councilors and the House of Representatives. As a general rule, a bill becomes a law simply by passing both houses. The executive power is made up of the Cabinet which is headed by the Prime Minister. The Supreme Court and a number of inferior courts are vested with the judicial power. All judges are granted complete independence in decision making. The three major labour laws are Labour Standards Law, Trade Union Law and Labour Relations Adjustment Law (Izhar, et al., 2012).
Environmental Factors
China offers few natural resources to support the country’s vast industrial economy. About 95 percent of all environ-mental resources (metals, fuels, wood, and so forth) are used in Japan’s booming industries must be imported. Volcanic mountaintops that rise from the bottom of the Pacific Ocean form nearly all of Japan. Slightly more than80 percent of the country is composed of rugged hills and mountains. The threat of volcanic eruptions is only one of the natural hazards with which Japanese must contend; there are also earthquakes and various kinds of earth flows and slides. Japan has a wide range of climates similar to that of the eastern coast of the United States. Most of Japan located south of Tokyo enjoys a mild, humid subtropical climate similar to that of the coastal southeastern United States. No place in Japan is located more than 100 miles from the sea. Rainfall is abundant during Japan. Precipitation in Japan is affected by a system of seasonal monsoon winds (Gritzner et al., 2004).
Japan’s marine ecosystem is vital to its survival. The country has long depended on the ocean for food. The water surrounding Japan is among the world’s richest fisheries. Fish, shellfish, crustaceans, and even edible seaweed abound (Izhar, et al., 2012).
Few places can match Japan in terms of environmental hazards. The country has experienced some of nature’s most violent events, including earthquakes, volcanic eruptions, tsunamis, typhoons , earth flow or slide, and flooding. As Japan’s population grew and its economy changed from agriculture to industry, much of the country’s natural environment is affected (Izhar, et al., 2012).
Since the operating cost is very high in Japan, it would be very challenging to set up Kooddoo Fisheries Ltd in Japan. Therefore, it is more profitable to use an agent to sell their products in Japan.

Challenges in Sri Lanka business environment

In 2011 Sri Lanka was placed at 97 among 180 countries in annual Corruption Perception Index. Corruption, scandals and deceit are very common in Sri Lanka as a result the businesses has been affected by such occurrences in recent times. The ethical and financial issues are the main scandals and Sri Lanka has seen the fall of companies which failed to operate in accordance with the ethical codes (Challenges in business ethics, 2012).  Therefore, Kooddoo Fisheries Ltd might not be able to follow ethical codes when they are operating in Sri Lanka as a result this can affect their reputation.
Although there is good political stability in the present government, there is a concern that too much power is centered among few individuals in the present governing regime and politicians have interfered with the businesses and the policy has changed either to assist or restrict company operations (PESTEL Analysis of Sri Lanka, n.d.).  So, Kooddoo Fisheries Ltd may be influenced by the politicians as a result they might not be able to operate their business smoothly.
In recent years in Sri Lanka, there have been many significant legal changes that have affected firms' behaviour due to the introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle. In addition, the executive powers of the president have interfered with the local and international businesses. Sri Lanka has a strong labour policy which clearly stipulates the working hours, age limits, prohibition of child labour, industrial safety and the salaries are paid monthly (PESTEL Analysis of Sri Lanka, n.d.). Therefore, Kooddoo Fisheries Ltd needs to follow these laws to operate the business smoothly.
Deforestation, pollution, filling the marshy lands and in fact the unauthorized buildings have caused numerous environmental problems in Sri Lanka. This has affected the businesse operations in Sri Lanka. Hence, Kooddoo Fisheries Ltd will also face environmental issues when they operate in Sri Lank as a result their cost might operating cost might increase (PESTEL Analysis of Sri Lanka, n.d.).  
Sri Lanka as a nation has its own culture, operating procedures and regulations. This is a major issue for the foreign businesses like Kooddoo Fisheries Ltd when they operate in Sri Lanka business environment. They need to know more about the culture, preference and taste of the customers as a result cost might be increased in initial stage (PESTEL Analysis of Sri Lanka, n.d.).  

Challenges in China business environment

China has a centralized political system. The structure of government agencies is vertical, from the central government to provincial and local governments. It is hard for a Chinese company to understand that with regard to matters that are outside the state’s jurisdiction, the state has no authority to make binding decisions (Valkjärvi & You, 2012). Kooddoo Fisheries Ltd will have less freedom in this market as a result they might not be able to perfume well in this market.
China is, in theory and to a certain extent in reality, a Communist country. Until as recently as ten years ago, the vast majority of the country’s business enterprises were owned by the state. There was practically no line between government and business. Although China’s economy, to a large extent, has been privatized in recent years, the government and Communist Party still maintain strong control and influence over many business activities (Valkjärvi & You, 2012). Therefore, Koodoo Fisheries Ltd will be influenced by the government of China.
Cultural differences often reflect on business behaviors. In China, schools of philosophy originated in ancient times continue to have influence on the sense of morals and virtue today (Valkjärvi & You, 2012).  Kooddoo Fisheries Ltd will find it difficult to adopt according to the culture of China.
Although both Chinese legislation and the Chinese legal system have made significant progress, and continue to evolve rapidly, there is generally a large gap between theory and practice. It is difficult for foreign firms wishing to do business, as these companies may have problems in understanding where they stand. However, hiding behind Chinese subcontractors in cases of human rights abuses is no excuse, and will not enable the main contractor to escape its responsibilities (Doing Business in China: The human rights Challenge, 2009). This will affect the employees of Kooddoo Fineries Ltd in China.
Although freedom of association is recognized by the Constitution of the People’s Republic of China (hereafter named “China”), there is in practice no freedom to establish independent labour unions. Currently, the legal framework in China is not fully developed with regard to an effective collective bargaining process (Doing Business in China: The human rights Challenge, 2009). Therefore, Kooddoo Fisheries Ltd will not be able to protect all employees’ rights in China.
Although the Chinese government is currently making a concerted effort to protect the right to health and safety of Chinese workers and citizens, the working conditions of millions of people are still below normal standards. Employee dissatisfaction is often caused by the corruption pervading the process of reorganizing state-owned enterprises and the misappropriation of funds reserved for the payment of compensation in case of dismissal and other social benefits (Doing Business in China: The human rights Challenge, 2009). China has not ratified any of the conventions against forced labour issued by the International Labour Organization (Doing Business in China: The human rights Challenge, 2009). Therefore, Kooddoo Fisheries Ltd will not be able to protect all employees’ rights in China.
China's natural environment has been badly affected by human. Deforestation has gone on for many years. There is now a program of tree planting and a national conservation organization looks at the consequences for the environment of using pesticides and chemicals (Valkjärvi & You, 2012). Kooddoo Fisheries Ltd will find it difficult to operate in China’s market.

Challenges in Japan business environment

The country has experienced some of nature’s most violent events, including earthquakes, volcanic eruptions, tsunamis, typhoon earth flow or slide, and flooding. The last year’s earthquake and tsunami has the potential to impact 86,418 businesses with the majority located in the prefectures most impacted by the disaster. Conservative estimates suggest potential impact to 311,934 employees and $209 billion in sales volume. These businesses spread across 715 industries (2011 Impact Report of Japan Earthquake and Tsunami, 2011). Therefore, Kooddoo Fisheries Ltd will face more natural disasters when they operate in Japan.
The difficulty of penetrating the Japanese market depends to a great extent on the product or service involved. Key variables include the degree of local or third-country competition, the number of regulatory hurdles to be overcome, and cultural factors such as language, strict service and quality expectations, and business practices (Doing Business in Japan, 2012). Therefore, Kooddoo Fisheries Ltd will face high competition when they operate in Japan’s market.
Generally, tariffs on most imported goods into Japan are low. However, cultural, regulatory, or other non-tariff barriers continue to exist that can hinder. These can include Japanese import license requirements, restricted or prohibited imports, temporary entry of goods, certifications, standards, labeling requirements, etc (Doing Business in Japan, 2012). Therefore, it is very difficult for Kooddoo Fisheries Ltd to enter into Japan’s market.  
The companies investing in Japan will have difficulties to tackle are language, taxes and labor costs. Japan is characterized by relatively high operational costs. Japan is characterized by relatively high operational costs (Doing Business in Japan, 2012). This is also a big challenge for Kooddoo Fisheries Ltd to enter into Japan’s market.

Recommendations to overcome the difficulties in Sri Lanka

It is recommended that Cooddoo Fiseries Ltd should take the advantages of South Asia Free Trade Agreement. Under this agreement, they need to pay lower tariffs for the products imported to Sri Lanka. In addition to this, they can get other necessary assistances like license, land etc easily (Ministry of Economic Development, n.d.).   
It is very important to have good relation with the Sri Lankan government and politicians. If Kooddoo Fisheries is able to develop good relation with the Sri Lanka government, they will get more assistance and guidance to setup the business in Sri Lanka. Meantime, the influences from the government and politicians can be avoided.
Since, some parts of the country is has environmental problems, Kooddoo Fisheries Ltd can setup their business in more developed area like Colombo. There will have good infrastructure and the business will be able to operate easily.
There are more qualified and cheap labours in Sri Lanka. It is recommended to employ more employees from Sri Lanka. This will help the business to run smoothly because these employees know more information about the customers in Sri Lanka market.
Since, Sri Lanka has its own culture, operating procedures and regulations, it is important to get more information about the culture and regulations to operate successfully in this market.
Since the operating cost is low in this market compared to in Maldives, it is recommended to have good advertising and promotional techniques to get more customers in the market.  

Recommendations to overcome the difficulties in China

It is very important to have good relation with the China government. If Kooddoo Fisheries is able to develop good relation with the China government, the influences from the government can be minimized.
There are more qualified and cheap labours in China. Meantime the resources and facilities are less expensive in China. It is recommended to employ more employees from China. This will help the business to run smoothly because these employees know more information about the customers in China market.
Since China has different culture and religions, it is very important to understand these factors. Meantime, it is also important to identify their tastes and preferences in order to satisfy this huge market needs.
It is important to follow international and national human rights standards in order to avoid complicity in human rights violations. Developing codes of conduct and policies that refer explicitly to human rights is vital to integrate human rights considerations into all decision-making processes. Make sure that the codes of conduct and policies are implemented throughout company operations, and that managers and staff, as well as suppliers and sub-contractors, are specifically trained in these codes and policies. Workers should have access to documents explaining what their rights are in a language they understand (Doing Business in China: The human rights Challenge, 2009).

Recommendations to overcome the difficulties in Japan

Since the competition and operating cost is very high in Japan, Cooddoo Fisheries Ltd cannot operate in this market. Therefore, it is recommended to produce the products in Maldives or in China. This will reduce the cost per unit and profit can be maximized.  
Since Japan has different culture and religions, it is very important to understand these factors. Also, it is also important to identify their tastes and preferences in order to satisfy the customer needs in this market.
There are many restrictions like import license requirements, restricted or prohibited imports, temporary entry of goods, certifications, standards, labeling requirements, etc in Japan. Therefore it is recommended to use e-commerce or agents to sell the products in Japan. This will reduce the operating cost and can be avoided many restrictions.
On 24th September 2012 in Tokyo the Embassy of the Maldives in Japan held a Maldives Canned Tuna Promotion Night on 24th September 2012 in Tokyo. The response to the event was very encouraging. A large number of people, including officials from the canned foods industry, wholesalers and importers as well as the media and friends of the Maldives attended the event. The event was also webcast live to over 3 million viewers (Maldives Canned Tuna Promotion Night, 2012). Therefore, it is recommended to promote Kooddoo Fiseries Ltd products through these kinds of events in order to get more customers without spending more on advertising.
Lastly, it is also recommended to have a good vision and mission in order to be more successful in foreign market. A good vision could be to become the best canned tuna producer in the region. So, the employees will work hard to achieve the vision. As a result the company will be able to provide best quality products in the local as well as in foreign market.  

Conclusion

In conclusion, Kooddo Fisheries Maldives Ltd is an important business organization in Maldives in fishing industry. They are producing very good products and has good infrastructure. In addition to the production of fish products they have ice plants and have introduced mineral water in Maldives. They are successful in local market and in the foreign market of Iran and Thailand. However, they do not have a vision and mission for the organization. Therefore, they need to have a good vision and missions before stating their operations in Sri Lanka, China and Japan in order to be more successful in theses markets.
The PESTEL analysis of Sri Lanka shows the overall economic, political, social, environmental, legal and technological factor are fine to operate in this country. However, there are few challenges that need to overcome in order to run the business smoothly. The recommendations given will help to overcome these challenges.   
The PESTEL analysis of China shows that there are more challenges and difficulties compared to Sri Lanka because China is a Communist country and this will hinder the business operation in China but the recommendations given will help to minimize the impact on business in this market.  Also, there are some very good advantages like low operating cost in China which will enable to get more profit in future.
The PESTEL analysis of Japan shows the overall economic, political, social, environmental, legal and technological factor are fine to operate in this country. However, there are more impacts in this market such as operating cost is very high. Therefore, the recommendations need to be followed to avoid the higher operating cost and to get maximum profit from the market.
In a nutshell, the Kooddoo Fisheries Maldives Ltd can set up their businesses in Sri Lanka and China but not in Japan. Meantime, they need to produce goods in China or in Sri Lanka and sell the products to Japan by using an agent.

References

Challenges in business ethics. (2012). Retrieved October 07, 2012, from http://www.ft.lk/2012/08/08/challenges-in-business-ethics/
Doing Business in China: The human rights Challenge. (2009). Switzerland: Imprimerie Gasser SA Le Locle. Retrieved October 07, 2012, from http://www.amnesty.ch/de/themen/wirtschaft-menschenrechte/doing-business-in-china
Doing Business in Japan: 2012 Country Commercial Guide for U.S. Companies. (2012). Retrieved October 08, 2012, from http://www.mac.doc.gov/japan-korea/nte/2012ccg-Japan.pdf
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