Effective Strategies for Managers - Coursework Example

Going Global Nam: Institutional Affiliation: Going Global With the increasing levels of globalization resulting from liberalization of markets, efficient flow of information, and integration of markets, the level of competition in the local market has increased tremendously. This has resulted from the entry of multinational companies in the local market. These firms have huge financial base to segment the market, position their products strategically in the market, and attract customer loyalty towards their products. In order for the local businesses to remain competitive, they are being forced to diversify their operations to other untapped markets in order to reduce the risks and uncertainties associated with concentrating on a single market. Furthermore, internationalization process is being forced by increased cost of production in the local markets. Therefore, businesses are establishing their subsidiaries in different parts of the world where there is cheap but qualified labor force, cheap raw materials, and the necessary infrastructures to support the operations of the companies (Lan & Unhelkar, 2005). Although many companies have been able to make immense profits, there are numerous challenges associated with going global. This paper will therefore discuss these challenges and effective strategies that managers can put in place in order to deal with them. Financial constrain is one of the major challenge that face any manager who is is planning to go global. The size of international market is very large. As a result, the company requires high amounts of funds to penetrate and reach the target market some of whom are located in different parts of the world. Moreover, establishing a business in foreign countries faces huge financial challenges. Despite the existence of the modern technology such as video conferencing which has eased the mode of communication with the subsidiaries, more resources are required in order to sustain these businesses and products especially during the growth and penetration stage. During these stages the business’ profits are taken back in order to improve various operations. Therefore, the firm requires constant support from headquarter. Consequently, before a company decides to go global, it must ensure that it has the necessary resources to support the new enterprises over a specific period of time. Taxation is another major challenge that is associated with finance. In many countries, foreign businesses and products are charged more than the local businesses and products that have been produced locally (Awe, 2009). Therefore, a business must ensure that it calculates the cost of doing business in a foreign country before embarking on the process. This is significant in avoiding losses. Another major challenge that is faced by the manager when entering the international market is cultural diversity. In the local market, the customers have a single or few cultural differences. As a result, it is easy to advertise and draft an advertising message for such a market. However, in the international market, customers have different cultural beliefs and practices which might affect the success of the product in the market (Travis, 2007). For instance, Apple Inc has been unable to segment the Chinese market fully due to the unique cultural practices and beliefs held by the local people. A business must overcome various legal challenges before going global. Despite the liberalization of markets, each country has local rules and regulations that must be followed by any interested investors. Some of these might hurt the operations of the business in the new market. For instance, some countries have set up the minimum percentage of the local population that must be employed by the business. However, in other countries, the local population might lack the necessary technical knowledge (Lundby & Jolton, 2010). In such a case, the business expansion might be greatly affected. On the other hand, some governments have put up laws to ensure that international businesses which get their profits locally must take part in corporate social responsibility. This measure has affected many businesses which are forced to set large amounts of profit in order to uplift the lives of the local population. This is at the expense of business operation. Managers should consider communication challenges that will emanate from going global. A global business must establish an effective communication strategy in order for it to succeed. In order for all the employees despite of their location to work as a team, the company must ensure that they install the current technology to improve the level of communication. Companies such as McDonalds have ensured that all subsidiaries are interlinked and they share crucial information, an aspect that has played a significant role in improving the competitive advantage of the business in different markets (Tetteh & Burn, 2001). Moreover, managers are faced with a great challenge of selecting the appropriate media in order to communicate with the target market. Currently, communication with the customer has become an important aspect that leads to the success of the business. However, the increasing demand for media services has forces the media houses to increase their costs. Nevertheless, international businesses which have a huge financial reserve are able to afford these costs. Therefore, a manager is required to plan in advance on the channels to be used to communicate with the market on the existence of the product in the market (Martin & Chaney, 2006). This is an important strategy towards segmenting the market and developing customer loyalty towards the company’s products. Managers are faced with an acute shortage of qualified personnel who can be able to run the operations of the business in the global platform. Many local companies have employees who have specialized in the local market. However, internationalization process requires subordinates who have the necessary skills and experience to handle people who emanates from different cultures, religions, genders, and races (Awe, 2009). Many businesses have failed to penetrate the international market due to failure to consider these aspects during the process. These employees need to know how to conduct effective marketing research in order to identify various components that must be integrated into the overall process. Getting people who posses these skills is a major hurdle that managers face in their attempts to expand the operations of the business in the global market. Managers need to consider the competition level before going global. International market composes of multinational businesses which have been able to open various subsidiaries in different parts of the world. As a result, they have a stable source of revenue. Their financial muscle acts as a barrier of entry for any other interested investors. Moreover, they have been able to segment the market through intensive advertising in the global media (Rickard, Baker, & Crew, 2009). They have also invested heavily in the modern technology. Therefore, they produce products at very low prices. For a business to enter this market, it must strategize on how to compete effectively with such businesses. Managers should use the strategy of merging or acquiring another business that has already penetrated the market. This will be significant in acquiring a workforce that has the necessary skills and experience in the local market. In addition, the employees can train the rest of the staff members on the best strategies required to improve the performance of the business in the market. Introducing a new brand in the global market can be a very expensive affair. As a result, acquiring an already established business and brand would be significant in saving the money that could have been used in advertising the product in the market (Awe, 2009). Moreover, the strategy would enable the business to acquire some technologies required to produce product. This would be important in lowering the cost of product, an aspect that would make it possible for the business to produce products at very low costs. Social media and internet have become one of the most effective advertising platforms in the modern society. Many people are using these tools to search for their products of choice. Therefore, the manager can use the platforms to advertise their product. This would enable them to reach a huge market which is spread all over the world (Awe, 2009). In addition, social media can be used as a research tool. This is through collecting the feedback from the customers concerning the products. As a result, the company is able to make the necessary changes. This plays a significant role in retaining the customer and making them loyal to the company’s products. In order to avoid acute shortage of employees who have the skills and experience on different cultures, the manager should consider employing local people who are well qualified. In some countries people want to be associated with a company that has a national outlook and one that participate in the growth of the local economy. Therefore, this strategy would attract the customers towards the company. Coca-Cola has been using this strategy to expand its operation in different parts of the world (Awe, 2009). This creates a perception among the local people that they own the company, an aspect that makes it easy for it to penetrate the market and create a barrier of entry. In conclusion, the success of internationalization program is dependent on the strategies undertaken by the managers. As a result, despite various challenges that are associated with entering the international market, effective planning and financing of the program leads to overall success. References Awe, S. C. (2009). Going global: An information sourcebook for small and medium-sized businesses. Santa Barbara, CA: Libraries Unlimited. Hind, P., Wilson, A., & Lenssen, G. (2009). Developing leaders for sustainable business. Corporate Governance, 9(1), 7-20. Lan, Y., & Unhelkar, B. (2005). Global enterprise transitions: Managing the process. Hershey, PA: Idea Group Pub. Lundby, K. M., & Jolton, J. (2010). Going global: Practical applications and recommendations for HR and OD professionals in the global workplace. San Francisco: Jossey-Bass. Martin, J. S., & Chaney, L. H. (2006). Global business etiquette: A guide to international communication and customs. Westport, CT: Praeger. Rickard, C., Baker, J., & Crew, Y. (2009). Going global: Managing the HR function across countries and cultures. Farnham, England: Gower. Tetteh, E., & Burn, J. (2001). Global strategies for SME‐business: applying the small framework. Logistics Information Management, 14(1), 171-180. Travis, T. G. (2007). Doing business anywhere: The essential guide to going global. Hoboken, NJ: John Wiley & Sons. Read More