When organizations in the developing markets have started showing improvement and growth, they can also get finances and skilled workforce or laborers from developed countries which helps in improvement of their brand name and the general growth and development of the company or organization. Nevertheless, these companies can overcome these disadvantages and improve their growth by considering certain essential factors for smooth operation while doing business internationally.
FACTS OF LIFE AND RATIONALE FOR THEIR SELECTION
Formation of Alliances
There are different methods used by companies to enter into international trade and can be categorized into strategic partnerships or alliances, and stand-alone entries. Whichever method a company chooses should have expected returns that are higher than the expenses that were incurred during the trade. In a strategic alliance, there is ease of market entry into foreign markets by foreign firms, where there are economic benefits to companies in terms of the scale of production of the company and scope of their marketing strategies. The use of a contract commonly known as contract manufacturing is a strategic alliance useful for breaking into the international trade market. (Debrah, Smith and Cardiff, 2012). There is also sharing of expertise and experience. A company, especially an organization that is skilled in marketing, development, and research can break into the international trade market with the strategic alliance as it is more focused on the companys core activities which limits cases of wastage of resources, it requires less capital, managerial risks are minimal, division of responsibility and labor is less complex, and exit from the strategic alliance is not a complicated process. (Amone, 2013)
The Mission of an Organization
Organizational structure and objectives are vital parts of the company as it tries to break into the international trade market. The structure and objectives of the corporation will define the entry strategy into the global market to be used as it is from the companys structure that organizational culture can be drawn. The objectives of a company act as gears that help to drive the company into going global, and the goals of an organization stimulate it to be innovative and growth-oriented, and would thus consider avenues like international trade or the global market as avenues for growth and expansion of the company, as they drive the operations of the organization. With the exponential progress of technology and communications in developing countries, the world of business is becoming increasingly connected on a global level, all stemming from the organizational structure and objectives of emerging markets which are integral to these companies in their bid to go international. The goals of a company or organization are what drives it and stimulate its innovation and passion for growth, and the international business sector offers avenues for expansion. The structure of the company will determine the companys entry strategy into the international market.
Societal Factors Within the Foreign Country
The success or failure of a business in the global trade market is mostly hinged on social factors, behavioral factors, economic factors, geographical influences and legal policies. These are the factors that determine the longevity of an organization as it endeavors to go global and break into the international market. Other factors such as legal policies through trade laws and regulations can also interfere with trade. Starting up an international brand in a foreign country is a tedious step that involves many legislative processes, some countries are rigid and therefore not ready to accept certain investors and product manufacturers to tap into and access their local market, and this limits the ability of global organizations to expand.
A company should, therefore, scrutinize and analyze the policies and legislation that govern a global business, the social and economic prowess of the prospective business base in order to prevent and avoid the risk of early closure or being shut down due to debts, high employee and consumer turnover, among others. (Amone, 2013).The global market today is very competitive, with the rise of various consumer brands that are accepted worldwide. Any organization dreams that it could be able to create productive international brands that have consumers all around the world or cross-continent consumers. For global organizations to stand, social, political, legislative, and economic or technical factors must be given the upper hand or an upper outlook.
Trade and Financial Legalities
Ethical standards are the basic requirements from every business organization in the trade market, both local and international. Every country has stipulated legislation in place that controls the business operations of every business company in the country. Business culture in the developing country or the host country determines the ethical standards of the multinational corporations within the country. The company, therefore, has to ensure the development of appropriate rules and regulations, and laws and policies to govern the operations of the company in the emerging market, thus ensuring the development of appropriate networking and research to understand the regulations within the developing host country.
The company will also have to ensure that the rules and policies set to govern the workforce are implemented, thus developing a proper understanding and relationship with the countrys government and local agencies. The company will also ensure the development and management of a quality monitoring team which will ensure that the various commodities and services being produced by the company fulfill the minimum requirements by the quality and the standards of the host nation. This will, thus, ensure that the company develops and maintains a culture that embraces high ethical standards. In the international market, Purchasing Power Parities help in estimation of the exchange rates between countries by predicting the connection between the rates of inflation of two countries and the exchange rate pattern within the same range. A company may decide that the potential profits of trading with a foreign country in the global market may be worth the potential risks if their country has a favorable trade balance and balance of payment, and the Purchasing Power Parity between their country and the intended partner country favors them.
Countries are different, and so are their level of growth and economic development. Certain countries still lag behind in growth and development due to factors such as poverty that affects the operation of the economy, whereas others have a robust economic growth. To be successful, organizations should be flexible and be ready to place more funds and investments in developing brands in these economically struggling locations. While developing a global brand, countries that are still developing or poverty-stricken countries need to be considered, and therefore, appropriate strategies applied to tap into these markets. For the developing or emerging markets, the task of harmonizing wage, cost of living and additionally considering geographical location as barriers to the organizational growth should be identified as urgent challenges to the global organization. To be successful, organizations should be flexible and ready to place more funds and investments in developing brands in such locations. (Brookes & Palmer, 2014)
Dealing With Employees
In order to create flexibility in its workforce, a global organization has to allow itself to be susceptible to change by re-organizing itself in such a manner that the employees are innovative and creative, and ready to tap into new opportunities present in the global enterprise or international market in order to lift the name of the company and make it scale higher. The competency of the workers or employees to do so can thus be challenged through employee development programs, which allow for the growth and improvement of the skill and technical ability of the employees, which in turn leads to improved functioning and improved the productivity of the company as a whole in the marketplace. In addition, organizations must merge their efficiency with their adaptability in ord...
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