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Understanding the importance of cultural differences in business
Entering international markets
Implications of cultural differences for international businesses
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Determine what and when we need to improve:
S- Vertical integration
W- Low sales could impact available capital
O- Global expansion to Asian region
T- High end knock off brands that are made by competitors
1. Analyze how often organizations achieve high performance level. They are producing high end knock off replicas at a low cost.
2. How can that information be used to improve performances? They can expand to a global market with current products, but design them to fit the regions’ culture their deciding to market.
If they do not have enough capital to cross over into global market, they will need to look mainly at how much it will cost. How much would it be to finance operations and R & D productions? What would be the main products that could be used to enter into that market? What region would be looking at to enter into that particular market?
From our previous research the Asia region would be a better choice for expansion, due to the opening boarders to other cities. This could help with cutting back or cost because of the low labor and material cost. The only set back they will incur is Presidential changes and efforts of the U.S.
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The Asian market has had a large increase in a diverse marketing, and it is the best market for growth entry (). The internet has taken over in sales and product marketing this can get their message out faster about the new products, and new expansion. It also can help to benchmark customers’ needs and wants, and how many people have visited the website; the more traffic the better. They can also offer loyal customers a discount to promote sales in the U.S., as well as, offering web exclusive sales only. This can also help to save cost; they can also use blogs or social media to reach potential customers (Delaney,
The company first needs to collect demographic and geographic information relevant to potential store location choices in order to segment its market. It is extremely important that the marketing team gather thorough information in order to ensure they are focusing efforts in areas where the company’s products will be best received. This will help them in achieving maximum sales.
Currently majority revenue is generated by store sales but online sales from the stores’ websites are increasing. With US dollar getting weaker, international sales from these US based websites are increasing too. This creates significant positive outlook for the large incumbent players but also acts as a significant barrier of entry for new players.
The Meaning of Vertical and Horizontal Integration Horizontal integration is where an organisation owns two or more companies, on the same level of the buying chain. An example of this is the First Choice Group; they own First Choice Travel Agency and First Choice Hypermarket, both of which are on the same level of the buying chain. The advantage of horizontal integration is that it can increase the company’s market share. Another good example of this type of integration is when EasyJet purchased the airline Go from British Airways. Now EasyJet and Go both operate under the company name of EasyJet.
Businesses and organizations do what is called strategic management (Jurevicius 2013). Why? It is simple, every organization has a desire to strive and stand-out in this highly competitive industry. From a consumer’s perspective these concepts might not seem as detrimental as they do to the minds behind the systems that businesses revolves around. Nevertheless, there is a lot of tension in this fully blown out industry as companies are doing everything within their power to prosper. Several companies endure various forms of strategies that could be of possible benefit to them, however, most seem to focus their plans in on vertical and horizontal integrations. Purely because of the effectiveness that it delivers to a company’s HR system.
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
In the business world, the term that best describes a style of growth and control of management, is vertical integration. Vertically integrated companies in a value chain are connected through a common owner. Usually each member of the value chain produces a different component, and the components combine to satisfy a common need. It is contrasted with the horizontal integration. Vertical integration has also described management styles that bring large portions of the value chain under the same company , but also into one corporation (as in the 1920s when the Ford River Road Complex, began making much of its own steel rather than buying it from suppliers). (http://www.samsung.com/global/business/semiconductor/minisite/SSD/global/html/about/whitepaper09.html)
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
Product differentiation – by offering different products, services, or product features, the company can charge higher prices, or appeal to different audiences. Use of IS have enabled new products and services, that increase the levels of convenience in using existing products and services. By acquiring PayPal, eBay greatly enhanced the ease with which customers can pay for their products. Google keeps an innovative approach towards search engines, by introducing Google Maps, Google Translate and others, which improves the ease of usage. Using online live chatting systems and social networks contributes to understanding of customers. It also adds value and improves customers’ stickiness to website (Booth, Roberts, and Sikes 2011)
Google, which generates almost all of its revenue from advertising sales, have focused their attentions to these markets with unlimited potential. Google executives anticipate as its presence in foreign countries expands so will the growth of the company and eventually the bottom line. Some of the latest data on Google's financial status is that it receives a little less than two-thirds of all revenue domestically. This data is slated to change dramatically as overseas operations grow. One of the factors that have allowed Google to experience such successful growth is that the popularity of the brand was dispersed through word of mouth rather than expensive advertising dollars. With the populations in foreign markets much larger than in the Unites States it looks like a formula for success. However, what has been a formula for success in the United States does not always translate to success in other parts of the world.
Global segment include relevant new global markets, existing market that are changing, important international political events, and critical cultural and institutional characteristic of global market. When company entering the global, it automatically can increasing number of people believe or consumer in the multiple nation and this si...
... this and their marketing strategy will be key if they are to remain viable, grow and compete in the market.
Furthermore the ethical and social issues of the global market of Asia along with cultural diversity concerns will need to be addressed. In conclusion multiple logical suggestions and possible solutions will be offered to assist XYZ Construction, Inc. to be able to produce a successful global business expansion into the Asian market. Global market analysis There is abundant evidence that XYZ Company’s IPO and market diversity can be positively affected by expanding operations into the country of Asia. Barriers between developed and non-developed countries have been eliminated by the use of technology.
The international business development has heightened the importance of international market selection (IMS) of companies, especially for their exporting strategy. However, not many companies really comprehend the geographical, social, economic characteristics of foreign countries in comparison with their home countries (Cavusgil, 1985). This fact has challenged many studies to create the optimal approach for IMS. The major question is: Which foreign market should a company enter? Thus, this report focuses on providing a practical consultancy to evaluate and determine its most appropriate foreign markets.
Electronic commerce (e-commerce) over the Internet is the fastest growing method for consumers to conduct business. Less than ten years old and it already has radically altered the potential to economic activities and the social environment. There are nearly 200 million Internet users worldwide currently. Of these 200 million users, roughly 40 percent reside in the United States (Styliano, A., Robbins, S. & Jackson, P., 2003). E-commerce currently affects large sectors such as communications, banking and the retail industry. E-commerce has also had an effect on the education, health and government (Wyckoff, A., & Colecchia A., 1999). It is predicted that commerce on the Internet could total tens of billions of dollars by the turn of the century. E-commerce's most significant impact will be on sectors that transmit information (postal service, communications, radio and TV) and those that produce it (finance, entertainment, travel agents or stockbrokers) (Jones, B., n.d.). One of the most surprising but indirect impact e-commerce have had is associated with the way society has incorporated it into their everyday lives and its ability to drastically change the way businesses now interact with their employees, consumers, and business partners. Entrepreneurs are now able to start new businesses more easily, with smaller up front investment requirements, by accessing the Internet's worldwide network of customers (Jones, B., n.d.). China, with the third largest user population, is expected to gain market share-particularly in light of the prediction that it will surpass Japan and become the largest Asian Internet market during the coming year (Styliano, A., Robbins, S. & Jackson, P., 2003). E-commerce gives small businesses the competitive edge against large multinational organizations in the global market. Now that electronic commerce has become an integral part of everyday business, we now must take a look at how the emergence of e-commerce has affected the global marketplace and how has e-commerce changed the standard and quality of living. It would also be important to discuss some of the drawbacks or adverse effects that e-commerce has had on society.
In comparison to other forms of marketing, Internet Promotion presents the advantage of reduced budget and storage costs, when compared with printing brochures, producing television or radio advertisements or managing a call centre. It presents a fast and cost effective option for penetrating new markets.