Global Strategic Plan

This report explores the global strategic planning process for serial entrepreneurs and investigates the reasons for entering foreign markets. It discusses entry timing, scale of entry, and various entry modes with suitable illustrations. The report also highlights the importance of sound strategic planning and the factors to consider before entering a foreign market.

Global Strategic Plan

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Serial entrepreneurship’s global strategic planning.....................................................................1
Reasons for entering foreign market............................................................................................2
Foreign market selection..............................................................................................................3
Timing of entry............................................................................................................................3
Scale of entry...............................................................................................................................4
Impact...........................................................................................................................................4
Methods of international entry mode...........................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Entrepreneurship works as an important engine for economic growth & development.
Entrepreneur is the person, who set up their own business, takes risk and creates policies and
strategies for running a successful business. Entrepreneurs may be of different types such as
technological, serial, social or ethnic entrepreneur. Out of these, serial entrepreneur is the one
who takes challenges repeatedly and overcome the same with new ideas. Lots of unique
thoughtful ideas and creation makes it possible for the entity to set up a business and then move
forward to the next one. Thus, the current research report investigates serial entrepreneur’s
global strategic policy framework and plans to carry out business functioning successfully. In the
current age, entrepreneurs focus on the expansion strategies to expand their market share across
all over the globe by entry into new geographical market segments. Thus the report investigates
the reasons for entering into foreign market, entry timing, scale of entry and various entry modes
with suitable illustrations.
MAIN BODY
Serial entrepreneurship’s global strategic planning
Now-a-days, in the turbulent market environment, entrepreneurs deal with the tough
business challenges and make suitable plans to combat various issues to ensure smooth corporate
functioning. They must have various skills such as risk-taking attitude, innovation and creativity,
initiatives, independence and others, so that, they can carry out their regular activities without
any hurdles. Opposed to the typical entrepreneur, who have an idea to establish a new company
and plays an important role in handling daily business functioning, serial entrepreneur always
come up with new & creative ideas but assign its responsibility to someone else and then move
to a new venture (Butticè, Colombo and Wright, 2017). They have ability to quickly advance
their business unit through start-up or beginning phase to sustainable growth. For instance,
Microsoft (MSFT)’s founder Bill Gates is a serial entrepreneur and one of the well-established
businesses all over the world. Now-a-days, entrepreneurs focus on the internationalization of
their business operations to maximize their scale of operations and develop brand position all
over the world. Looking to the current competitive environment in the corporate sector,
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entrepreneurial ventures are highly interested in expansion to grab larger market share and earn
more return. Expanding operations in different countries enable serial entrepreneur to reach
greater audiences, which in turn, maximize total sales and net profitability with the global
presence.
A successful expansion requires sound global policy framework. In this context, strategic
planning refers to the procedure of setting organisational goals, set priorities and creates
operational plans and policies for ensuring that work is done aligning with the business targets to
derive common goals. Sound and prudent strategic planning is of huge importance to ensure
right resource allocation, effective utilization and successful growth and sustainability (Channon
and Jalland, 2016). It also can be considered as a control mechanism which provides direction to
all the members and serves as a control mechanism for the successful strategic implementation.
Although, overseas expansion drive advantages of higher sales, exceeding return, strong market
share and strengthen competitive position, still, it seems too difficult for the enterprises in
comparison to the domestic strategic planning due to broader availability of factors in emerging
economies i.e. different legislative framework, governmental regulations, economic conditions &
political environment and others (Grant, 2016). Before entering into foreign market, it is a prior
requirement for the enterprises to consider all the factors.
Reasons for entering foreign market
There are multitudes of reasons which motivate or encourage international entrepreneurs
to expanding their business overseas that are listed below:
Larger market size: One of the important reason why serial entrepreneurs look
expansion as an opportunity is it helps them to generate larger audiences and serve them with the
high quality offerings so as to expand their market share. Now-a-days, companies like Apple Inc,
Microsoft and others are serving people all over the world so as to have wider market size across
globe.
Profit potential: The main motto of profit organization is to obtain larger return from
their operations. They consider global expansion strategy as a way to have large profit potential
by serving more audience base, which in turn, derive larger return.
Economies of scale: Serving different region helps entities to effectively utilize their
existing production capacity and provide benefits of economies of scale. It helps to reduce per
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unit cost and maximize net return (Luo and Shenkar, 2017). It helps organizations to have more
money for spending on R&D, employee training investment in new technologies and others.
Global reach: Overseas expansion assists an enterprise to assure global reach as business
will be establish in more than one country. This in turn, business venture can serve more
consumer base and build global image.
Foreign market selection
There are various factors that needs to be consider before entering into foreign market i.e.
market size, growth potential, consumer wealth, opportunities, regulatory framework, trade
barriers, risk level, competition and others. Global entrepreneurs must expand their operations in
the country where there is possibility of high growth potential with large market size & growth
rate as well. For instance, under the market growth, well-established markets like Europe, US
Japan has less or more reached a consumer saturation point in consumer electronics, automobiles
and other, therefore, such market growth rate shows a decline trend (Lafontaine and Shaw,
2016). However, emerging economies like BRICS is considered attractive from the foreign
investor’s perspective to exploit overseas growth opportunities. Moreover, market where it can
produce goods at low cost due to cheaper material & labor cost and sound infrastructure & IT
facilities can be considered as a good market choice. Like Asian market is a good choice for the
global entrepreneurs to expand their business due to low cost manufacturing facilities. Besides
this, trade barriers covering both the entry and exit must be analyzed before entering into a
foreign market. However, on the other side, on the competitive aspect, international
entrepreneurs must expand business where competition level is not very tough (Yoder, Visich
and Rustambekov, 2016).
Timing of entry
In first movers, entrepreneur is the first person who brings specific item or service in the
market and obtains competitive advantage. It enable international entrepreneur to become a first
choice for the consumers and thereby establish strong brand recognition & loyalty among
consumers before other market entrants and create switching cost. For instance, Amazon.com
developed first online bookstore however, eBay established first online auction site as a first
movers. It is highly riskier but more rewarding expansion strategy (Hilmersson and et.al., 2017).
All the new market entrants or competitors follow first mover’s strategy to build consumer
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loyalty and acquire sufficient market share, called second movers. Consumer development,
product management, procurement and customer acquisition are the benefits of late movers or
entrants into foreign market. On the other side, innovative late movers redefine and reshape the
category to enjoy number of benefits as pioneers. For instance in the smart phone industry,
Blackberry has dominant position in the middle 2000s but Apple Inc completely overthrown the
company as an innovative second-mover entrepreneur.
Scale of entry
Serial entrepreneurs requires significant amount of resources for the large scale entry in
the foreign market. For instance, Dutch ING invested billions in order to acquire US operations.
Under the global policy framework, its decisions have a long-term impact over the business
functions and limits strategic flexibility (Santana, Hoover and Vengadasubbu, 2017). Due to
large scale entry, it is quite difficult to reverse. On the other hand, in the small scale entry,
business has several benefits such as availability of time to analyze foreign market, on the
contrary side, difficult to capture market as a first mover and building market share are its
downfall sides.
Impact
Market expansion helps companies to maximize their total turnover due to serving larger
audiences in local as well as multinational marketplace. With the help of global reach, companies
can serve higher number of audiences and improve their bottom line at a greater return. Apart
from this, it helps to strengthen the competitiveness of the enterprise with the global presence &
better return (Hay and Marsh, 2016). Besides this, it also drive cost benefits to the business units
because with the exceeding level of production, companies can distribute their fixed production
cost over more number of units, which in turn, decline per unit cost and drive higher earnings.
Methods of international entry mode
There are various international entry strategies i.e. joint venture, acquisition, establishing
subsidiary, strategic alliance, Greenfield investment, licensing and direct investment that might
be adopted by the serial entrepreneur for expanding business globally. Exporting is the process
whereby serial entrepreneur can hold their existing business model and send their products &
services to the foreign market for greater reach. It is founded suitable entry mode strategy for the
small sized business because it involves low level of risk as entity does not need to establish their
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own business overseas (Cuervo-Cazurra, 2016). Moreover, it also incur less cost as entity does
not need for marketing their item and build infrastructural development in foreign market.
However, cost of transportation, governmental tariffs, competition level are the factors that limits
business exports globally.
Besides this, joint venture is a process of joining hands with the other organization to
share ownership & management. Two or more companies who share common objectives of
expansion i.e. technology sharing, product development, risk sharing and others in same foreign
market can use JV. The most important benefit is it helps to satisfy resource requirements i.e.
funds, physical & managerial resources and ensure optimal use whereas differences in
managerial styles and political instability can cause threats (Hoffman, Watson and Preble, 2016).
For instance, MSFT announced a JV agreement (C&M Informational Technologies) with China
Electronics Technology Group (CETG) to enter into Chinese market. It is because; the target of
such expansion is to serve Chinese government and CETG is a state-owned business unit that
offers IT software and hardware to Chinese military (Horwitz, 2015). Besides this, in automobile
sector, Jaguar Land Rover sealed a JV with Chery Automobile in China to expand operations
overseas.
Acquisition is a strategy in which one company can take over the other organization. It
provides full control over acquired business entity and integrates firm’s management globally. It
is founded suitable if entrepreneur has sufficient funding sources and also the size of foreign
market need extensive investment (Tsang and Yamanoi, 2016). For instance, MSFT acquired
LikedIn at £26.2 billion to provide stronger connectivity. However, on the other side, Greenfield
strategy is regarded as initiating business operations from scratch in other foreign markets.
Modernised facilities & economic development are its important benefits whereas huge time
requirement, adherence with the regulatory framework and costlier mode of expansion are its
drawbacks. For instance, in retail industry, Tesco established “Fresh & Easy” stores in US as a
green field investment strategy, still the strategy did not succeed in the market.
Strategic alliances are a voluntary agreement between two different organizations to pool
their business resources so as to accomplish a commonly shared objective (Ahi and et.al., 2017).
It is a form of partnership wherein two independent units work together for their mutual benefits.
It is perfect strategy for expanding production capacity of the organization & market share as
well. Referring IT sector, MSFT and Cognizant had expanded its strategic alliances for the cloud
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analytics (Sirosh, 2016). Besides this, strategic alliance between Royal banks of Scotland &
Tesco is an example of it whereby supermarket is delivering banking services throughout its
stores all over the market. Apart from this, contractual manufacturing is a way of outsourcing the
manufacturing functions to another organization. For instance, in China, Apple Inc’s iPad &
iPhone are produced by Foxconn and benefited the firm due to less cost of production.
CONCLUSION
From the report, it becomes clear that overseas expansion is a good opportunity for the
entrepreneurs to have larger return, better sales and other growth possibility with sound
competitiveness. On the basis of entry timing, businesses may be first movers, second movers or
late movers for the global expansion. The report also inferred that there are number of ways
through which entity can expand their business activities overseas such as acquisition,
Greenfield, strategic alliances, exporting, joint venture and others. Before venturing into new
market segment, it is essential for the enterprise to analyze the external market conditions of
foreign market and select the most appropriate international entry mode.
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REFERENCES
Books and Journals
Ahi, A. and et.al., 2017, March. International Market Entry: How Do Small and Medium-Sized
Enterprises Make Decisions?. American Marketing Association.
Butticè, V., Colombo, M.G. and Wright, M., 2017. Serial crowdfunding, social capital, and
project success. Entrepreneurship Theory and Practice. 41(2). pp.183-207.
Channon, D.F. and Jalland, M., 2016. Multinational strategic planning. Springer.
Cuervo-Cazurra, A., 2016. Multilatinas as sources of new research insights: The learning and
escape drivers of international expansion. Journal of Business Research, 69(6), pp.1963-
1972.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hay, C. and Marsh, D. eds., 2016. Demystifying globalization. Springer.
Hilmersson, M. and et.al., 2017. Time, Temporality, and Internationalization: The Relationship
Among Point in Time of, Time to, and Speed of International Expansion. American
Marketing Association.
Hoffman, R.C., Watson, S. and Preble, J.F., 2016. International Expansion of United States
Franchisors: A Status Report and Propositions for Future Research. Journal of Marketing
Channels, 23(4), pp.180-195.
Lafontaine, F. and Shaw, K., 2016. Serial entrepreneurship: Learning by doing?. Journal of
Labor Economics. 34(S2). pp.S217-S254.
Luo, Y. and Shenkar, O., 2017. The Multinational Corporation as a Multilingual Community:
Language and Organization in a Global Context. In Language in International
Business (pp. 59-92). Springer International Publishing.
Santana, J., Hoover, R. and Vengadasubbu, M., 2017. Investor commitment to serial
entrepreneurs: A multilayer network analysis. Social Networks. 48. pp.256-269.
Tsang, E.W. and Yamanoi, J., 2016. International expansion through start‐up or acquisition: A
replication. Strategic Management Journal. 37(11). pp.2291-2306.
Yoder, S., Visich, J.K. and Rustambekov, E., 2016. Lessons learned from international
expansion failures and successes. Business Horizons, 59(2), pp.233-243.
Online
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Horwitz, J., 2015. Microsoft’s new joint venture shows China’s bullying tactics work on US tech
firms. [Online]. Available through: < https://qz.com/576457/microsofts-new-joint-
venture-shows-that-chinas-bullying-tactics-work-on-us-tech-firms/>. [Accessed on 1st
July 2017].
Sirosh, J., 2016. Microsoft and Cognizant expand strategic alliances. [Online]. Available
through: < https://blogs.technet.microsoft.com/machinelearning/2016/03/24/microsoft-
and-cognizant-expand-strategic-alliance/>. [Accessed on 1st July 2017].
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