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International Management Challenges | Essay

   

Added on  2022-09-22

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The international manager
International Management Challenges | Essay_1

Introduction
Globalization accelerates market liberalization, which gives economic freedom to the firms
for trading in foreign countries. As a consequence, international managers divide the market
into two segments – the domestic market and international market. The international
managers make marketing decision based on the market demand or consumers’ demand.
Trading in the domestic market is more convenient as the managers obtain the consumers'
data and comprehend their buying trends in an easier and faster way than formulating the
marketing strategies in the foreign market. The business organization must know the business
laws and entry barriers in a foreign market. International management is more complex than
dealing in the domestic market; it requires huge financial resources. The managers have to
take risks of uncertain situations and be prepared for the changes. The uncertain situations
come with some opportunities and challenges described below:
This essay analyses the international management challenges in the context of a car
manufacturing company, Ford Australia, a subsidiary of Ford Canada. The company comes
recently in the headlines of news due to its massive fall out in the international market like
Europe, China and South American market (Baruch & Reis, 2015). Ford Australia is
committed to meet the consumer needs of both the domestic and international market. This
division of Ford is engaged in the activities of producing, assembling, importing and
distributing. Ford Australia gains the opportunity of accessing new customer base and creates
its portfolio for different segments. Its portfolio contains more than one brands in the
international market like Focus, Ford Kuga SUV, Fiesta, etc. At the same time, the company
is pressurized by the new competition in the domestic market. Competitive rivalry in the
Australian car market led them to enter in price war competition with the international player
Hyundai. The existing customers in the domestic market are prone to switch to newer
technologies as they get Hyundai models in an affordable range. Forbes (2019) points out that
as the Australian buyers are financially stable; they crave for newer products than preferring
durability. The domestic competitors like Holden also take part in the price war as they offer
innovative designs at a cheap price. The increasing competition in the domestic market leads
to the challenge of the growing bargaining power of suppliers. As a result, Ford Australia’s
business sustainability is affected.
Ford Australia faces a declining marginal profit due to the price-sensitive customers' choice.
As the international and domestic market players offer similar kind of features and
International Management Challenges | Essay_2

functionalities in automobile choices, Ford adopts the strategies of discounts and premium
schemes. The buyers of the international market are divided into two major segments: one
goes for quality and others prefer financial savings. Lee (2016) described the point of view of
buyers of emerging countries like China who feel that buying a car is a one-time investment.
Consequently, they will seek for convenient financial schemes. Ford faces a hard competition
in the Chinese automotive market, which left Ford behind the competition in the largest
automotive market. Borland (2015) found that the dealers’ profitability, lack of inventory
control and lack of refreshing line-ups damage the positioning of Ford in the Chinese
automotive market. International business challenge pushes Ford to revamp its designing and
refreshes its product pipelines. On the other hand, Domestic player, Holden throws a new
challenge to Ford by targeting low-income customers by offering limited technological
features with a lower price range. As a result, the bargaining power of buyer increases and
Ford’s profit margin has been fallen. Asad (2012) says that Ford Australia comes back with
new marketing strategies to combat the situation. It transforms the brand identity in a newer
shape in retail showroom in the Australian market while closes down its manufacturing
divisions. In order to withstand the international players, Ford Australia expands its portfolio
with new offers like warranty period, free car loan, map updates and low pricing with
reduced size. The company is planning to come back in the Chinese market, as its market size
will be increased by twice the size of the US by 2020 (Belyi & Goldthau, 2015). The
international managers focus on lining up of their profitable models like pickup trucks and
sport utility automobiles in the US, introducing Rangers in Europe and Fiesta series in the
overseas countries.
The rising concern of energy conservation for future generation aims to introduce sustainable
transport, which led to the arrival of Electric vehicles in the market. This is an effective
solution for preventing air pollutants and also saving the fuels used in the vehicles. Forbes
(2019) says that 15 nations are enrolled in the mission of Electric car that will bring out 20
million electric cars in the market by 2020. Tesla has pioneered the electric car journey and
soon the traditional carmakers like Volkswagen, Toyota have joined to the electric car family.
The substitution of products gives new challenges to Ford Motors. This unplanned situation
gives them a new opportunity for a breakthrough in the electronic car market. In order to
establish its sales again in the international market, Ford invests $4.5 billion additionally for
manufacturing electronic vehicles by 2020. Forbes (2019) suggests that this emerging trend
will help Fords motor to cover up the huge loss in Lincoln cars and SUV models in North
International Management Challenges | Essay_3

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