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Business Opportunities and Threats

By Edited Feb 27, 2016 0 0

Today, managers in many industries are working hard to match the competitive advantages of their new global rivals. They are moving manufacturing offshore in search of low labor cost, rationalizing product lines to capture the global scale economies, and institution quality circles. Many forces are driving companies around the world to globalize by expanding their participation in foreign markets. Now, almost every product market in the world such as computers, fast food, nuts and bolts has foreign competitors.

From the beginning, the company must overcome entry barriers. This is important as recently organizations tend to cut back on their overseas businesses. ''Exit'' has been one popular label for this, withdrawal is another. Companies tend to shrink their activities in a foreign country, cancelling long-term contract, and reducing their crystalline networks. As they develop, through all the waves of expansion, integration and diversification, some companies lose their sense of doing business overseas (Mintzberg & Quinn, 1996).

At this moment, matters on how and what it takes to expand a business overseas have become two of the most burning issues for managers around the world. In fact, many companies will seek executives who will be able to expand the business overseas. No doubt, the company will gain revenues due to the lower cost of production when expanding into foreign market. In some ways, they have missed the most important key points, whereby managers need to know the consequences when expanding into the international market. The management team of the company must answer three key questions when venturing overseas: (1) What are the key factors for success in foreign market? (2) What specific policies should the company develop in order to meet the requirements of expending business abroad? (3) How to integrate the company management approach in a foreign country?

If the company fails to determine the key forces that drive internationalization, it would cause the company to face the top ten problems. These problems include culture, legal issues, environment, politic, economic, networking, technology, strategic, competition, and limited market size. These problems were based on real life experiences by multinational companies such as Wal-Mart, Nike, Walt-Disney, Kellogg's and many more when attempting to expand overseas.

Therefore, this presentation will illustrate some of the main problems on why companies have failed when they ventured into new territories. What are the major key weaknesses of their company's management, as well as how it affects the company? Besides that, it would also suggest some ways of overcoming the issues faced when doing business overseas. These cases could be a lesson and example for other companies who intend to go for internationalization. This could be served as a guideline for companies to learn and figure out how to do it better.

To conclude our discussion of expanding business overseas, companies must recognize that at first one cannot be sure which of several technical issues will likely to affect their business field. As mentioned earlier, all the issues may lead to losses, accident or mishaps within the organization. Therefore, a company that wishes to move from home country to foreign marketplace must absorb all potential failure cost itself. In reality, this risk may be socially or managerially intolerable, jeopardizing the company products, projects, jobs, and communities.

Among all the recommendations, the main solution to the problems of starting business abroad is to build an effective management. This management team must devote a good deal of their time to ensure the decision and strategies they choose are not in conflict with the issues. The top managers of the company must be masters of human relations, able to use persuasion, negotiation, coalition, reputation and rapport in order to have a smooth functioning operation overseas. Besides, there must be careful personal monitoring of international projects to ensure that they are completed according to specifications, on schedule and within budget (Mintzberg & Quinn, 1996).

Managers need to think carefully about how the new business fits into their company strategy and structure their technology, skills, and organizational commitments accordingly. Thus, executives need to understand and accept the tumultuous realities of global business as well as to learn from the experiences of other companies and adapt the most relevant features of these others to their own management practices and cultures. By having this top-level understanding, a commitment to solutions and a genuine portfolio strategy, companies can innovate to meet the severe demands of global competition!

Without complete knowledge of the international business and expansion into diverse and undiscovered markets, the management team can drop of positive profit seeing company into a company the will fall through the cracks as companies have done so many times in history. It is not impossible to see why these companies take so many precautions in expanding business. Although profits and expansion can be huge, the bad affects can over whelm a company of any size. The main thing we need to remember after reading this article is that no matter what situation you may come into, being prepared for a war in a time of peace is exactly what every company needs to do. This does not mean to bring out your missles at any time, this is to say that you need to prepare and take every action needed, before it is needed. You need to prepare, you need to prepare, you need to prepare. Obviously, if I write the sentence three times over… it should mean something by now.

With these business opportunities and threats, we hope that you realize the enormous benefits your company can see from proper expansion. You also need to realize the kind of potential problems that can arise when bringing such a huge undertaking. The kind of threats you will see are unlike any you would see in the United States, some countries may not allow you to even work there, some may only allow you to work with the companies they specify, and some may require they have government personal in your business! How much would that rattle your bones in the dead of winter?



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