Mode of entry into a foreign countryThese are the various arrangements that an entrepreneur can employ to do business across borders. The most common modes include the following: Exporting – this is the practice of producing goods locally and shipping them to overseas markets. There is the advantage of widened market and customer base for the producer. The major challenge is negotiating entry bureaucracies and probably sourcing the best destination. Licensing – this entails using the property of the licensor in the target country. These properties are usually intangible assets that are of value to a certain line of business.
Such could be production skills, trademarks and patents. Joint Venture – this entails taking up ownership of an entity in a different country. This can be by way of a partnership arrangement with a foreigner or buying shares in an existing business. Direct Investment – this entails committing resources to an investment in a country that is not one’s home country. The zeal for this arrangement is usually presence of a more appealing business environment than the home country (Jusuf & Biljana, 2011). Importance of culture in businessIt is worth noting that the modern business field is defined by multiple interactions between people of different cultural backgrounds.
This state of affairs must be seen by investors as a business opportunity rather than a hindrance. In essence it is diversity that creates the need and desire to trade. Success in the interconnected world will therefore require the participants to have the capability to compete effectively the multicultural environment. Managing diversity in developing economies can bring forth many advantages. For instance diversity brings a new touch is the staff base.
People with different cultural backgrounds are talented differently and consequently will bring varying attributes to the business. The knowledge and perspectives of these people can be used as a source of competitive strength in business (Jusuf & Biljana, 2011). People with varying cultural experiences will have the ability to respond to changing needs of customers. This as opposed to if these people were drawn from the same folk. The flexibility so achieved is a significant toll for the business to respond to the ever changing consumer needs in the market place (Granovetter, 1973). Cultural diversity enables the entity to gain acceptance from the local communities.
The enterprise finds it easier to penetrate to new consumer groups since it is backed by the staff composition of its human resource function. Furthermore different cultures present different demands for goods and services and this is a great chance for increasing sales and by extension profits. EntrepreneursQualities and Attributes of EntrepreneursConfidence – this is necessary to create the sense of self esteem and belief that goes wwith taking difficult decisions. Sense of Ownership – the person needs to take up responsibility for all actions either by him/her or his/her agent.
He/she must view all problems and successes as his/her own. Ability to communicate - the ideas of the entrepreneur may go unrewarded if they are not promptly passed on to those who should execute them. In this sense the incumbent must possess skills of making people see a situation from his/her point of view.