Ask a question from expert
Globalization Internalization of Business PDF
16 Pages2987 Words220 Views
Added on 2020-05-16
Globalization Internalization of Business PDF
Added on 2020-05-16
BookmarkShareRelated Documents
RUNNING HEAD: Globalization 0GLOBALIZATIONInternalization of business
Internationalizing of business 1What benefits are companies hoping to gain by internationalizing their operations?The term internationalizing denotes the way of increasing the involvement of business ininternational markets in order to be more competitive and expand their business beyond thedomestic territory. One must think globally and has the ability to understand cultures that existsin host country if it plans to serve internationally. The organization should be able to understandand appreciate norms, values, laws, regulations and cultures of other country and then developthe business strategies accordingly. There must be a new concept of innovation, quality andcommitment to corporate social responsibility to gain the best business strategies while adoptingnew cultures and new country (Cavusgil, 2014).Companies decide to internationalize their operations for several reasons and it should be able toproduce many strategies, performance goals and market participation. Even though, a companyfollows market entry in a standard form, it also aims at following development strategy too.Internalization helps a company to build a strong business in the country market with optimalrisk involved (Richard, 2013). There are many advantages when a company internationalize theiroperations. Some of them are listed below. Increase sales: when a company plans to internationalize their operations, it willautomatically increase its sales and improve its overall revenue. According to a research,it was said that about 96% of the world’s population do not live inside US and 90% ofthem do not speak English. So, it can be stated that today customers are found globallyand there must be some real potential if a company plans to expand globally. A companymust have a unique and innovative product to gain an advantage in the other country andearn business success as well. Let us take an example of a software company. Here if youplan to add on French and German language version in it as a unique feature, it willdefinitely help you to expand your market value in 200 million which is a huge amount(Chłapek, 2015). Improve profits: The price pressure in the other markets as compared to US market is lowbecause they are not as competitive as US markets. So, if it will help to generate more
Internationalizing of business 2profits in other markets due to less number of competitors. For example: The price ofJaguar car in California is less than the price of same in England (Queensland, 2017). Short term security: The fluctuations in the economy of the US and its market place willleast affect the business because when you expand your business globally, the economiccondition of the US will not affect your business. Long term security: There are huge number of competitors in foreign and domesticmarket and when it comes to the market like US, it is a mature market with plenty ofcompetitors globally. So, by increasing global marketplace, it will increase the costsavings (Anghel, 2012).Increase innovation: If a company plans to extend its customer base internationally, thenit must focus on developing a new and innovative products. Uniqueness in product willhelp the customers to get attracted towards it and motivate them to purchase the products(Chiva, 2014). Exclusivity: Advantages of gaining information about the foreign customers, marketplaces and situations which are unknown to others may be beneficial to the company.Economies of scale: One of the best way to expand business is exporting its productsaround the world. It will help companies to gain high scales of economy. A company canearn a differentiating advantage by providing innovativeness in their product andexporting it (Dente, 2013).Government incentives: The government of US provides a wealth of help when acompany manages to start exporting its business. In more than 100 cities in the US,export help centers are found who provide a resource to the company who plans to exporttheir business. A Small Business Administration i.e. SBA aims at providing ExportWorking Capital Programs which include the loans guaranteed up to $50,000 to $100,000which enables exporters to expand their business and grow successfully (Hirst, 2015).
Internationalizing of business 3Organization structure in international businessOrganization structure is nothing but the arrangement of roles and responsibilities in anorganization in a very formal and structured way. Organization structure is a very powerful toolto implement strategy. There are different types of organization structure i.e. Expo-documentsagainst acceptancert Department, International division structure, Global OrganizationalStructures and Expo- documents against acceptancert Department.Expo-documents against acceptancert Department (Type 1)Figure: Exports DepartmentExports are usually looked by a department of sales and marketing in a company at very earlystage when the export sales are very low. When the volume of the exports turnover increases, anindividual departments is set and it is set aside from domestic marketing. All the activities arecontrolled by the home based export departments. The main role of HR department is to plan andrecruit staffs for different departments like exports, training and development and compensation.Here, exports department also perform activities like recruiting foreign sales.International division structure (Type 2)
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Internationalisation Strategy for Tip Toplg...
|4
|963
|365
International Marketing Strategy Poster Reflective Statement Assignment 2022lg...
|10
|2403
|16
Managing Across Borders: ZARA's Global Expansion Strategylg...
|17
|4057
|56
International Marketing: Strategies for Expanding Business Globallylg...
|17
|5287
|86
Coca-Cola: International Business Strategy for Globalizationlg...
|15
|11526
|494
International Business Environment of Tesco : Assignmentlg...
|9
|2879
|112