What Are Some of the Key Organizational Issues That Occupy Arp Resources and the Attention of Arp Managers

1. What are some of the key organizational issues that occupy ARP resources and the attention of ARP managers?

This is what is keeping the managers up at night and what will occupy the most resources:

1. Management Location – Which office are we managing the new operation out of, New York, The Netherlands, or in a newly established office in the host country?
2. Outsourcing – what are the challenges associated with outsourcing services, do we outsource or not given the following challenges:

1. Coordinating Team
2. Composition
3. Logistics
4. Security
5. Contract Negotiation

1. Increased Profitability – will this expansion make for a profitable outcome?

1. JSO grossed $90million in the last 4 operations – will this new venture generate comparable revenue, or exceed?

1. Branding – will this expansion stay in line and continue to develop who we are as a company and what we do?  Will it add value to our name in a new market?  Will this new market trust and embrace our brand?
2. Time – coordinating travel and time of the executives to the host country to address the myriad of cultural and logistical issues that need their critical decision making attention.

1. Which of these issues, or other issues, are most salient to the internationalization decision that ARP currently faces?

Although all important, we feel that the following are the most critical and salient for ARP management to address to ensure the success of the endeavor:

1. Increased Profitability – The primary purpose of any business is to be profitable, therefore this issue is of the utmost importance when making the decisions surrounding the expansion to Brazil.  Are we presenting a musical presentation that people in Brazil will appreciate, respond to and therefore pay to see?  Are we putting the production on in a cost efficient manner?
2. Logistics – Moving the “stadium shows” potentially requires the need to ship 110 containers as it did in Australia, in addition to transporting 110 people and the associated sets of equipment, costumes, musical instruments, etc. This requires tremendous efforts, coordination and capital to execute.
3. Team Composition – The people chosen to execute this production will essentially be the key to the success of the entire operation.  It requires both ARP reach back capability and local talent to address so the numerous issues associated with both the scope of the production and the learning curve of embarking on a new venture in an unknown country and culture.

1. What is motivating ARP to expand globally?

The following motivations are the driving forces behind expanding into additional global markets:

1. Expand Global Reach – ARP has been successful in numerous countries, it makes good business sense to continue this successful expansion to the South American market.  Entering Brazil opens the doors for additional countries in the South American market.  Leaving South American as an untapped market is leaving money on the table.
2. Expand Global Reputation – From a business prestige perspective, it is important to continue the celebrated success and recognition of the Johann Strauss Orchestra.  
3. Expand Profitability – Additional markets provide additional avenues to increase revenue and profitability and therefore sustainability and growth of the business.
4. Expand Customer Base – The entrance into new markets provides additional untapped customer bases and can only ensure the potential for future increased earnings that Andre Rieu demands.

1. How does Brazil compare culturally to the Netherlands?  How do other countries in which ARP currently operates compare to the Netherland?

1. Established vs emerging market – The Netherlands, as part of the EU, is part of the “first world” and therefore the effect of conducting commerce is more predictable.  Even though Brazil is rapidly achieving industrialization it is still a third world countries which introduces levels of uncertainties in regard to regulation and process that can vary widely by local and region.  The failure to understand these intricacies can be costly to the uninitiated business enterprise.
2. Need to check details is increased – Doing business in Brazil requires that details at each level of bureaucracy be verified to a much higher degree than doing business in any EU country.  Once agreements in the EU are executed the expectation is that there will be an established system that is predictable at all levels.  The same may not be the same in Brazil therefore all of the things required to produce an expected business result must be scrutinized at all times.
3. Cultural and Labor Differences – Labor rates and benefit expectations in EU countries are well documented therefore ARP can predict the impact of labor costs on operations.  Since ARP has not done any business in Brazil it is still unfamiliar the complexities of Brazil’s labor laws.  ARP must not only be able to navigate the laws but also comply with them at each level or face serious consequences.
4. Political Differences & Relationship Requirements – Businesses conducting transactions in The Netherlands can expect to experience very low levels of overt corruption, which presents almost no factor in doing business there.  However, companies wishing to conduct business in Brazil can expect to encounter some level of corruption that will cause delays and added expense.  Brazil’s culture of Jeitenho bleeds into daily transactions at all levels and can present a problem for ARP because by definition it means “for my friend everything, for my enemy the law.”
5. Language Barriers – The national language of Brazil is Portuguese and ARP has no personnel that speak this language natively. 
6. Infrastructure Availability – The Netherland has state-of-the-art infrastructure at all levels from roads to the power grid.  Brazil is an emerging industrialized nation that is still growing its infrastructure.  As a result the things needed to conduct business may be inadequate and vary widely by venue, which range from fully developed urban areas in Rio and Sao Paulo to rural and unimproved rain forest areas.  

All of the other countries in which ARP conducts business each present their own unique cultural and business challenges however, a team that is willing to take the time to fully understand the intricacies of each venue can successfully conduct business in each.  ARP has navigated issues in each of the venues, from labor issues in Australia to protests in Canada.  While each venue presents its own unique challenges each has been advantageous to ARP in helping to grow its brand and popularity.