New Market Expansion Term Paper Example | Topics and Well Written Essays - 2000 words

New Market Expansion - Term Paper Example The company holds approximately 40,000 acres of rare-earth elements in various parts of the U.S including Colorado and Montana. The rare-earth minerals have been an important resource used in most advanced technologies, particularly clean-energy technology such as that used in energy-efficient cars as well as hi-tech products such as mobile phones, hard disk drives, digital music devices as well as the telecommunication sector including fiber-optic technology (U.S. Rare Earths, Inc., 2013). Additionally, these minerals have been used as in water purification treatments as well as radar devices and global navigation (U.S. Rare Earths, Inc., 2013). Therefore, this industry is highly valuable in terms of the usage of these minerals, and therefore, is highly rewarding as well. As noted by researchers, China is currently the single source that is enriched with these minerals and supplies 90% of the world’s supply of rare earths (Bloomberg News, 2013). As per China’s policy, exports of rare earths have been decreased with government plans to hoard up critical minerals. The Government of China seems to be taking active interest in this booming industry with the intention of developing particular types of â€Å"permanent magnets (Zhang, 2011)†. ... On the other hand, China’s recent move to cut exports critical to Western technologies seems to signal the government’s intention to give priority to the locals. This could threaten our ability to secure contract with the Chinese firm Xinhua which has been established for over 15 years in the field. Nevertheless, this industry provides the opportunity for lucrative profits as international prices of rare earth minerals are expected to rise (Market Watch: The Wall Street Journal, 2013). These prices are expected to increase for another two years or so. This demonstrates strong economic activity boosted by technological advancements and industrial demand. Owing to the critical political significance of this sector, the Chinese government is taking active interest in this industry by dictating policies for the exploitation of these rare minerals. The mounting political significance of this sector has led the government to maintain a great deal of ‘secrecy’ reg arding recent developments in this sector and, therefore, gaining the trust of the government as well as Xinhua will be a challenge. Despite various challenges, there is strong basis for entering into the Chinese market. In light of this, a joint venture arrangement shall be held with a local Chinese Rare Earth firm Xinhua. Considering that the company is dominantly Western in nature, this expansion shall mark a dramatic cultural shift in terms of the work practices and management style. For this purpose, it is useful to analyze the Chinese culture using the â€Å"high context† and â€Å"low context† classification. High context cultures have been typically defined as those whereby individuals use non-verbal