Hello everyone, welcome to Milestone 2 of Management Economics and Business Analysis Capstone. So what do we get to do in Milestone 2 of the course? Well, we get to conduct a brief macroeconomic analysis of the two countries that you've selected in the previous milestone and you're going to compare and contrast those two countries macroeconomic performance, and what will you emerge with after completing this work? You're going to get a very strong sense of how your top two candidate countries fair on those key macroeconomic variables and how risky in investment in this country maybe because after all your Board of Directors probably does want to minimize the risk of their investment. It is impossible to eliminate the risk, but it is desirable to reduce the risk as much as possible. So what macroeconomic analysis would you be working with? Here are those variables, and we're splitting those variables into two categories. One of them is the category of Dynamic Behavior, essentially three variables in this table: Gross Domestic Product or GDP per capita, Inflation, and Unemployment. You are looking at them for their performance for the past five years. Thus, we call it dynamic behavior. You are trying to figure out, what has happened to those variables? How they performed? How have they changed? Thus it's really, really important for you to utilize charts to show their behavior, and it's probably even better for you to put both countries on the same chart so that your board can see how the two countries are doing against each other. Another two variables that you require are corruption or ease of doing business, and that's the variable that you've seen already. You've used it in Milestone 1 as one of the variables in your arranging table, it's the Corruption Perception Index. The second variable again you've seen it before, it's the trade as percentage of GDP, which we use as our proxy of a country's openness to trade. For those two variables, we can utilize static analysis. You can take just the most recent year that's required and you can present those in a table contrasting the two countries. Of course, the charts and the table are not old [inaudible] are asking of you, and those variables may not be just the only variables that you'll include. You are absolutely free, and you are very welcome to include other variables that you consider to be relevant. You absolutely should include a narrative that analyzes the data that you've put together, and you should explain in this narrative any of the recent macroeconomic and political events that indicate changes in risk for the potential investment. The board doesn't like taking gamble, nobody does, any risks that you take must be calculated risks. So sources of data. You've seen those sources of data before. We really do recommend that you continue using the World Bank Open Data. It will make life easier for you, it will make life easier for your peers who are going to review your work and to provide feedback for you. Another source that we've used before is the Corruption Perceptions Index by Transparency International. It's another great source that allows you to assess the business climate in a given country. We do ask that you engage in additional research to figure out what might be, anything else in terms of quantitative data, in terms of qualitative data and narrative that you may want to include. We do ask you to document your work and to cite your sources. This is fairly important. So please utilize in-text citations and references as necessary. You don't have to use a very specific format, but you must be consistent. So if you are used to APA format, that's perfectly fine, you're welcome to use it. If you're used to a different format, that's also okay. Consistency is the key here. So the next steps. By the end of this module, you're going to collect macroeconomic data and you will have analyzed political and macroeconomic environments of those two countries, and you also will have produced a pretty good comparison of those countries macroeconomic performance and stability. This will give you a sense at this point of which of the two countries might be beginning to emerge as your champion, as your preferred choice for this foreign direct investment, but of course you will learn a lot more about those two countries in Module 3. In Module 3, you'll be moving on to analyze them microeconomic environments. That is, the supply and demand in your industry, and the implications for your profitability, pricing, and product differentiation strategies. So that's our blonde folks. Good luck in this module. It's a little bit easier than Module 1. So talk to you in the discussion forums.
