Chapter12Assignment
p. 354 Review Questions 3 AND 9
(3) What are the four caveats exporting SMEs would be well advised to observe when crafting their export strategy? Discuss.
The term export means to ship the goods and services out of the port of a country. An export of a good occurs when there is a change of ownership from a resident to a non-resident. Methods of export include a product or good or information being mailed, hand-delivered, shipped by air, shipped by boat, or even downloaded from an internet site. When a SME considers exporting abroad, there are four caveats that they should observe while crafting their export strategy. The four caveats exporting SMEs would be well advised to observe when crafting their export strategy are: (1) the initial entry should be on a small scale to minimize risk, (2) offer a minimum number of product lines until a foothold has been established, (3) hire and involve locals within your organization at the earliest opportunity, and (4) consider the degree of difficulty in cutting through red tape when crafting the firm’s export strategy.
First, exporting SMEs would be well advised to observe the initial entry should be on a small scale to minimize risk when crafting their export strategy. The locational advantages of a particular market are a combination of market potential and investment risk. As you might expect, the lower risk of export typically results in a lower rate of return on sales than possible though other modes of international business. In other words, the usual return on export sales may not be tremendous, but neither is the risk.
Second, exporting SMEs would be well advised to observe offer a minimum number of product lines until a foothold has been established when...
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...tices, the degree of safety built into product design, donations to good causes, and the selling of addictive products (tobacco, alcohol). For example, some standard Canadian promotional techniques do not always succeed in other countries. Many Europeans believe that a product must be inherently shoddy if a company does any hard-sell marketing.
Last, a SME should be familiar with various bribe strategies that are present throughout the international business trading market. For example, in Canada and the United States, bribes are seen as being unethical and illegal. In 2006, the Gemological Institute of American fired several employees after they had accepted bribes from diamond dealers. In return for the bribes, the employees rated the dealers’ diamonds higher than they should have been. This also allowed the deals to sell the diamonds for a much higher price.
Bribery has always been a controversial issue, especially in the business world. Many argue that bribes are a necessary cost of doing business while others view them with distain, claiming that they are antiquated and create an unfair advantage. In the late 90’s, the problem reached a boiling point. Although laws such as the Foreign Corrupt Practices Act made bribery illegal in the United States, it still remained an international issue. Numerous skeptics claimed that violators of the act slipped through loopholes and that the law was not properly enforced. This law only applied to the United States, but bribery had become a worldwide concern. In 1998, the International Anti-Bribery and Fair Competition Act was enacted. The Act became law on November 10, 1998, however; it did not take effect until May 1, 1999.
With the development of international business, more and more companies get large profits in multinational cooperation, also led to a serious corruption problem at the same time. One of the most famous is the Siemens scandal. Although there are many laws to stop transnational bribery, many companies have to rely on bribes to win contracts. Some managers consider the social resources are limited and the distribution exist competition. A bribe is the easy way to obtain the resources that the companies original may not get. Furthermore, some of the company 's products have serious quality problem, the leaders of production will bribe prosecutors. Then the products into the market smoothly, however, this behavior will lead to unfair competition
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
Globalization can not only affect a company opening an office in another country but it can affect a small local business as well. As the internet brings the world closer together it becomes far more likely that a business that opened with no intention of selling internationally will have customers form different parts of the world asking for their product. For instance a steel company located in Pennsylvania may suddenly find orders coming in from South American factories. How the steel plant chooses to handle this new international customer could mean ...
Firms exist with the purpose of create and deliver economic value (Bensaco et al 2010, p. 365); therefore, business that create better economic value than its competitors will attain an advantage position in market place. Companies might try to improve its sales (profit) through domestic expansion, product diversification or by internationalisation; this report will focus on the reasons of espressamente Illy to expand internationally; additionally, its sources of competitive advantage and, the analysis of three markets in which company want to participate.
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
Exporting is the commercial activity of selling and shipping a good or goods to a foreign country. Importing is the commercial activity of buying and bringing in goods from a foreign country. The benefits of exporting and importing are good to a countries economy as it creates local jobs. The Honda plant in Alliston exports the Honda Civic (a three door hatchback and four-door sedan) as well it is the only facility in the world that builds the full-size Odyssey minivan and the Acura MDX sport utility vehicle.
From a food and beverage manager's perspective - What are the important characteristics and procedures of a food and beverage establishment in relation to its size, type, market, design, planning and organization?
These factors encourage the SME to seek a non EU market and a central location where it can gain advantage from a lot of
In this report, discussions aim to assist an Irish SME to optimise its analysis and assortment of the BRICS countries (Brazil, Russia, India, China, and South Africa) - the developing or newly industrialised nations. The term ‘company’ herein mainly refers to small and medium enterprises rather than the large international enterprises. Besides, the exporting aspect is the main concern in this context. Furthermore, the entry mode to each market is presumed to be the subsequent decision of a company after identifying the market. Thus, it would not be covered in this report.
Marketing is a very broad term, which encompasses all the activities that help businesses in identifying their customers and needs of their target market, utilising all the communication resources in order to target their target market, eventually persuading them to purchase the organisations products and services. It is much broader than the concept of selling, as selling just includes techniques of direct communication used to persuade the customers to buy the products and services of an organisation. In fact, sales are the integral part of marketing. Marketing also helps organisations to utilise all resources in an efficient way to gain customer satisfaction, which will eventually help in the growth of the company. While, on one hand, marketers tend to focus on the needs and preferences of the customers, they also need to keep a close eye on their competitors (Gillespie, 2010). Companies always look to beat down their competition with providing better products and/or services, or by providing less-expensive goods to the customers than their competitors, in order to achieve or maintain the leading position in the industry. The core focus of this paper is to identify and discuss the core aspects how managers could maintain the marketing activities of the organisation in the global context.
Globalization encourages worldwide business. Globalization is an efficient process by which all the nations of world will commonly try to set regular universal standards & regulations (both created & recommended) which will encourage business around different nations. Business around nations or elements crosswise over different fringes is called universal business.
Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.
International business contains all business transactions private and governmental, sales, investments, logistics, and transportation that happen between two or more regions, nations and countries beyond their political limits. Generally, private companies undertake such transactions for profit governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources includes capital, skills, and people. for international production of physical goods and services such as finance, banking, insurance, and construction.
I found this topic so interesting and motivating and I believe that I got some new knowledge and skills after attended this assignment topic. My experience has been successfully expanded as a result of attending classes, to include global approach to the international business. I found out that practice for international business has become little bit complicated due to influence of globalization.