Challenges and Recommendations for Business Expansion in International Market

This report discusses the challenges faced by businesses while expanding their operations internationally and provides recommendations to overcome them. The challenges include local competition, supply chain risk, tax codes and compliance issues, and language and cultural barriers. The report suggests that companies should conduct market research, build healthy relationships with local partners, formulate effective strategies for supply chain management, comply with laws and regulations, and develop multilingual websites to overcome these challenges.

Global Issues in
Business and Tourism

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Local Competition ......................................................................................................................3
Recommendation.........................................................................................................................4
Supply chain risk ........................................................................................................................4
Recommendation.........................................................................................................................5
Tax codes and compliance issues ...............................................................................................5
Recommendation ........................................................................................................................6
Language and cultural barriers .................................................................................................6
Recommendation ........................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Profit maximisation is the core aim of every business organisation and they use various tactics
and strategies in order to expand business operation. There are various opportunities when
business takes their operations internationally. They can take advantage of various opportunity
and generate more profit. It is needed to analyse market and conduct research so that business
would not face any loss while operating its functions internationally. This project report is based
on challenges that a company faces while expanding its operations operations. In addition to that,
it will also cover solution or recommendation that company can take in order to successfully
operate business.
TASK
Business expansion helps in promoting growth and there are various opportunities while
operating business internationally. Company can get a larger customer base and generate more
profit. It is needed to conduct market research in order to get deep understanding about
customer's taste and preference (Badenhorst-Weiss and Tolmay, 2021). It makes process of
internationalization more smoother. By entering in overseas business, it allows faster growth and
new audience can take advantage of their product. The process of internationalization is complex
and time consuming as it involves various documentation formalities to be done in order to get
permission of taking business internationally. Following are the challenges of taking business
internationally.
Local Competition
While entering business internationally, it is important to conduct market research in order to
analyse strengths and weaknesses of its competitors. By assessing weakness, company can
formulate effective strategies in order to beat competition. It will help company in attracting
customers by providing products and services based on their demand and preference (Zhang and
Warner, 2017). It is needed to analyse level of competition and based on that formulate plans.
Company should identify products and services offered by competitors and have to make people
influence in order to buy product. In case of non analysing local competition, entering company
may suffer loss. Local competition is cyclic and continuous and there are various competitors
which affect busienss operation adversely. Market and competition analysation involves taste
and preference of customers along with assessment of competitor's strengths and weaknesses. It

will help company in eliminating wasteful activities and to use resources optimally. By optimum
utilisation of resources, company can save cost and time and can be used in doing other business
activities. Company have to opt for better option of operating business whether it will opt
franchising or merchandising to operate its business. Local competition may affect business
operations in negative ways as they have better understanding of customers (Viriyasitavat,
Anuphaptrirong and Hoonsopon 2019).
Recommendation
It is important to build healthy withy local partners or it will adversely impact on business
operations. The relation may involve shipping and storage along with logistics which makes
business more productive. It helps business in promoting and expansion. By having local
knowledge and expertise, company can bring tons of benefit. They may help in attracting new
customer or in understanding better demand of customer.
Supply chain risk
Supply chain may be referred as the network of all individuals, resources and organisations
which is involved in creation of product. It is important to take this risk into consideration while
entering into new business market. It is needed to have balance between supply chain as it will
help in smooth functioning of business. It will help company in meeting demand of customer.
There are various departments of companies which are interconnected and makes process of
supply chain smoother (Srnicek, 2017). So it is done in order to manage supply chain which
cross national borders and can be a real challenge. Company have to opt right geographical area
in which labour is cheap and cost effective in terms of transportation. It is important to select
easiest and fastest route as it will help in saving of time and cost. In case of disturbance in supply
chain, company can suffer loss as it could not fulfil customer's demand and thus declines
performance. While entering international market, company have to be prepared for all risk
associsted with it such as delay in container and unavailability to material due to natural
calamities or any other reason. All these risk are taken into consideration while entering business
in international market. It plays a crucial role in making business successful. Company may
suffer loss in case of not managing supply chain. Company can earn higher profit by managing
supply chain along with improved customer satisfaction. It also facilitates in lowering down of
overall cost and company can take advantage of low cost by declining prices of products in order
to remain competitive in market.

Recommendation
This challenges can be overcome by formulating effective strategy for supply chain and a
business plan which will help management to work according in order to promote success
internationally. It is needed to have proper planning as it prevents company in overstocking and
understocking. Company can formulate budget too which will help in keeping its expenses in
budget and can monitor expenses. By monitoring expenses, company can take corrective
measures in order to control excess expenses.
Tax codes and compliance issues
Every company have different set of laws and regulations for operating business in their country.
It is important for entering country to understand all laws and legislations formulated by
government bodies. They have different set of tax slabs and tarrifs which creates complexities in
taking business internationally. Company have to comply with all rules and regulations in order
to make process smoother (Bashan and Armon, 2019). Before taking business to international
trade, company have to perform various document formalities so that it would not face any
barrier ahead. Due to differentiation in tax rates, it may affect company's profit. It is a major
obstacle for smaller companies as they cannot afford high tax in international market. It is
needed to understand and aware of trading standards and regulations. In case of non compliance
of rules and regulations, company may be penalised or restricts expansion in international
market. It may also create additional cost to home country. So it is important to follow all trading
protocols in an effective manner in order to make expansion process smoother. By following all
rules and regulations, company can generate more profit and avoid penalties. In some countries,
the tax slab is higher which lowers down profitability of business concern. Every country have
different set of rules and regulations and for that business have to comply with all. Company
have to follow country's financial recording structure and accounting standards to keep record of
transactions. Financial reporting structure are specific procedure for keeping and maintaining
records (Kandachar and Halme, 2017).
Recommendation
In order to overcome this barrier, company needs to understand laws and legislations for smooth
functioning of business operations. Company have to maintain financial records in accordance
with accounting standards. By this company cannot be penalise and maintain effective position
in market. It is needed to study details and to understand tariff and tax slabs so that it do not

negatively impact on business expansion. All the financial statements are formulated according
to accounting standards and must comply with laws and legislations. Company must not do
malpractices and manipulate financial statements in order to attract potential investors. Company
may be penalised in case of non compliance of rules and regulations formulated by governmental
bodies (Chen, Cheung and Tan, 2018).
Language and cultural barriers
When a business going to trade internationally , there comes a lot of challenges but language
and cultural barriers are one among them. It is necessary to have good knowledge about the
language of the country where you are going to trade because good communication skill is
required for dealing with customers nationally or internationally. Poor communication skill can
create barriers because communication is a two way process – listener & receiver. Not speaking
the same language can leads to misunderstanding , frustration, violence, hurt feelings, wasting
time, money, effort which effect the company. Verbal and non verbal communication both are
crucial in order to understand each other's languages. Non verbal communication such as
personality differences, behavioural ,body gestures , eye contact and mindset which may also the
reason of miscommunication. Eye contact is important in some culture but other culture take it as
a disrespect and rudeness. Sign and Symbol also plays an important role in some countries like
thumbs up for approval and clapping is used for congratulate. To overcome this language
differences it is essential to keep at least one person in your team who speaks local language and
translate it. Cultural barriers is common issue that will occur because every country adapt
different type of culture and differences which is new for the customers. It influences people
which are from different cultural background and understand one another. Some countries are
very punctual about time so they want faster delivery of products and expect the order in only 24
hours. According to people religious and spiritual belief can spread conflicts sometimes,it all can
carry different meanings that depends on culture to culture.There is need to understand that
working style and hours is different in every places. Company should be aware in case any
mishap arise and the rules of the company you have going to work . A proper research allows
you to prepare as well as planning in advance for their company structure,language and cultures.
Learning language online and listening words can helpful also the mobile apps such as duo
lingo, Google translator that makes learning new languages and clarifying the meanings of

different languages at time. For improving cross cultural communication active listening is very
effective.
Recommendation
To overcome these challenges, it is needed to developing a multilingual website which can be
very helpful and make sure about the market where you're going to operate, then translated the
language which will helpful to manage the communication with customers also it will become a
major attraction for international customer also. Studying about the strategies of international
expansion will helpful to understand the market. Training of employees is indeed because it is
important to give them foreign language training that will give company a competitive
advantage. Beyond this it will also beneficial for employees to give them chance to add this skill
in their personal development. Adapt to the environment and open up go to market strategy
because the company needs to acquire face the realities of the new market.
CONCLUSION
From the above project report, it was concluded that every business organisation wasnts to
maximise its business operations and for that it needs to explore new market of international. It
will help company in getting larger customer base and by formulating effective strategies it can
take advantage in terms of higher generated profits. Along with various opportunities, there are
various challenges while entering business internationally such as language and cultural barrier
and supply chain management. It is needed to take into consideration while operating entering in
international business. The supply chain of company must not be imbalance or it will negatively
impact on company's performance. Company have to overcome with this issue by formulating
business plan which will direct company towards attainment of goals internationally.

REFERENCES
Books and Journals
Badenhorst-Weiss, J.A. and Tolmay, A.S., 2021. Trust, commitment and business expansion in
automotive supply chains in a developing country: a principal-agency
perspective. International Journal of Applied Management Science, 13(1), pp.52-68.
Bashan, A. and Armon, D., 2019. Quality management challenges in a dynamic reality of
mergers, acquisitions and global expansion. International Journal of Quality &
Reliability Management.
Chen, Y., Cheung, C.M. and Tan, C.W., 2018. Omnichannel business research: Opportunities
and challenges. Decision Support Systems, 109, pp.1-4.
Kandachar, P. and Halme, M. eds., 2017. Sustainability challenges and solutions at the base of
the pyramid: Business, technology and the poor. Routledge.
Srnicek, N., 2017. The challenges of platform capitalism: Understanding the logic of a new
business model. Juncture, 23(4), pp.254-257.
Viriyasitavat, W., Anuphaptrirong, T. and Hoonsopon, D., 2019. When blockchain meets
Internet of Things: Characteristics, challenges, and business opportunities. Journal of
industrial information integration, 15, pp.21-28.
Zhang, X. and Warner, M.E., 2017. Business retention and expansion and business clusters–A
comprehensive approach to community development. Community Development, 48(2),
pp.170-186.