Doing Business in a Foreign Country for the First Time - Coursework Example

Doing business in a foreign country for the first time This paper takes a look at the way a business enters into a foreign territory, findsout the basis of its success within the related regions and then analyzes how the same will bring about fiscal profits for the organization as a whole and the foreign business entity in meticulous. It will also underline the future recommendations as to how and what the businesses should do in the long run and what it must avoid to achieve triumph. It will end with discussion on how a business must settle scores within the company itself and how it should have a deep look down its spine so that there are no egoistic issues emanating within the organization’s domains. Thesis Statement Any business which has decided to have offshore operations for the first time is filled with risks and benefits, which must be taken care of before the company has actually shifted. Introduction It is a fact that the world of business is a difficult one. It involves a number of processes and tasks which must be handled with utmost care and attention to details. Businesses require strict vigilance and compliance with the headquarters so that proper ideological basis of the company could be transferred at the different locations1. This would mean that success can only creep in when there are concerted efforts laid down in the charter when an organization wishes to implement its philosophy in different areas and zones of the world. The varied angles which could be understood here include the cost issues, the cultural angles, the societal manifestations, the business understanding and the competitive rivalries which come about when a business enters a territory that it has never explored but is all set to discover for the initial time2. Sections Entering a New Domain When a business enters a new region or country so to speak, it is actually expanding and in the same realms taking a risk which cannot be turned back. This risk would mean that the business is ready to explore its strengths and enter into zones which could bring about drawbacks, losses and so much more in the long run scheme of things. The losses are not only in the physical sense but also from a mental perspective. What this means is that these losses can leave a scar on the organization’s ideology that it has adopted for new territories as well as the headquarters from which the operations are basically being directed from3. These understandings bring forward the need of having a sound framework in place, which would essentially outline all the negativities that arise. Entering new domains is important as any business would like to grow in an exponential way. The changing times ask for creativity and compliance with competitive activities, which always is a good sign for the customers at the end of the day. Czkinkota, Ronkainen, Sutton-Brady and Beal (2008) state that business activities do not depend only on a single factor for any given action. Usually firms rely on a mixture of factors or motivation before they go the international way. For example, proactive motivation includes profit advantage, unique products, technological advantage, tax benefit, economies of scale and exclusive information. Another example is that of reactive motivation such as competitive pressures, overproduction, declining domestic sales, excess capacity and saturated domestic markets (Czkinkota and others 2008, 244 - 255). Czkinkota and others (2008, 10) define international marketing as “the process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations”. There are many strategies for firms towards penetrating a foreign market such as indirect exporting, direct exporting, integrated distribution, licensing and franchising. Before the firm chooses one of these strategies, it should consider the size of the market, trade restrictions, cost factors and investment climate. The Cost Factor One of the most important factors is the cost aspect which discusses just about everything related with the business venturing into a foreign country. If there are problems in the wake of meeting the budgets, then it would be proper to suggest that entering a new zone for this business would not be a good idea. However if the company understands that the cost aspects could be taken care of with the passage of time, then it could mean that this organization can move ahead and explore its basis within the new country4. Then again it is dependent on the company as to how it wants to explore its truest basis and what it wants to achieve, both from a short term perspective as well as in the long term. The strategic and tactical approaches will therefore be pin-pointed as these will bring about solid results for the sake of the organization that wishes to proceed with its operations within the new territory. Costs must be handled in a proper way so that there are no hiccups in the wake of achieving success when a company wishes to expand far and wide. Costs can either be borne by the headquarters (from where the company is expanding towards the new region) or from the new location itself where it is opening up a base5. The Cultural Manifestations From a cultural perspective, doing business in a new country is filled with a number of risks. This is because every country has a different culture and it must be understood in the proper vein. Cultural changes are important to understand because these embody the basis of growth and development within the business realms. If the cultural understandings are not taken care of, there could be teething problems for the business as soon as it starts within the new region or territory. The social mannerisms of the people who either believe in the multinational businesses or not are also quintessential towards deciphering as to how success would come about in the long run6. The social pressures are always present when a company goes the foreign way, and therefore it is a good practice to ensure that these people are shown the positives rather than telling them that they would be at a loss. Some governments create problems for the foreign businesses which are coming within their own territories and they demand heavy taxes on the shoulders of the business regimes. There are legal and illegal aspects which are being imposed on the foreign business operations as and when businesses expand globally. These cultural tangents must be taken care of so that businesses could enter new zones and thus benefit not only the varied target audiences for whom the products/services are being offered but also their own ultimate end goals, which remain significant nonetheless. What to do for Long Term Success? To achieve long term success within the foreign business operations, it is of paramount importance to examine the exact basis of innovation and experimentation as to how the same would reap dividends in the coming times. Long term success is only achieved when there is proper planning on hand and when resources are employed in the most corrective fashion7. More than anything else, there must be a firm resolve to do things right and that too from a long term standpoint. There must be more attention paid towards the employees and the intermediaries so that they are completely aligned with one another and any chance of weaknesses cropping up within the business operations are at their minimal8. Strategic success is therefore dependent on a number of important factors, one of which is the cost aspect, as discussed earlier in the paper. Hiring people who are trained enough to lead and manage business operations, supervising their actions and processes and so on are some of the most significant things that must be done in order to have a long term vision of the firm that is going the global way. Business Example Here we take the example of McDonalds which has its business operations running in different nook and corners of the world. It is one of the biggest fast food chains in the world and there is reason and evidence enough to believe such a claim9. McDonalds has proven itself time and time again, and for this much has been said and written already. Now whenever McDonalds decides to expand its business operations in newer cities or countries, it follows a distinctive set of policies which help the fast food chain to accomplish its goals and objectives. Similarly, when the talk goes out loud regarding the cultural and societal aspects that McDonalds has to face in different countries of the world, there are a number of differences in essence. Each of these variations are dealt with in a unique way10. Therefore the example of McDonalds is a peculiar one as it suggests so much in a quantified way. McDonalds has always believed in conveying its unified message around the world which is a very encouraging aspect for its consumers worldwide, and there is always an element of association amongst its different characters, logo, linkages and so on. Conclusion It is true to state here that opening business entities within different regions of the world is a cumbersome process, and one that demands a great deal of care and attention. The cost aspects are important but an organization must not always think of this pointer as the most significant one, as there are a number of other factors which have to be taken care of, as discussed previously in the paper. All said and done, venturing into a new territory from the business standpoint is seen as a risky proposition and there has been enough evidence that has been demonstrated for the same premise. The organizations must know what they are doing and how they will do it so as to achieve long term and strategic success. This only will guarantee what the basic vision of the organization was before it moved ahead to proceed with its strategic intent. References Author Unknown. Costing. Found Online at: http://www.fastlinksolutions.co.uk/howtowor.htm Author Unknown. Market Segmentation. Found Online at: http://www.businessplans.org/segment.html 2010 Author Unknown. McDonalds – Just Another Company. Found Online at: http://mwr.org.uk/justanother.htm Author Unknown. The McDonalds’ Philosophy. Found Online at: http://www.leanexpertise.com/MTL/McDonalds/Basics.html Author Unknown. Estimating Startup Costs for a New Business. Found Online at: http://www.startupnation.com/articles/1248/1/startup-costs-new-business.asp Bobinski, Dan. Integrity and Long-term Success. Found Online at: http://www.hodu.com/integrity.shtml Burdett, Clint. What Drives Your Long Term Business Success? - Study Macro Trends to Find Out. Found Online at: http://ezinearticles.com/?What-Drives-Your-Long-Term-Business-Success?---Study-Macro-Trends-to-Find-Out&id=2459453 2010 Copeland, Michael & Hamner, Susanna. 20 Smart Companies to Start Now. Found Online at: http://money.cnn.com/magazines/business2/business2_archive/2006/09/01/8384349/index.htm 26 October 2006 Li, J. Managing International Business Ventures in China. Found Online at: http://books.emeraldinsight.com/display.asp?K=9780080439334 2001 Mueller, S & Thomas, Anisys. Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness. Found Online at: http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VDH-41DHXFR-3&_user=10&_coverDate=01%2F31%2F2001&_rdoc=1&_fmt=high&_orig=search&_origin=search&_sort=d&_docanchor=&view=c&_searchStrId=1478433581&_rerunOrigin=google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=dcf52bbe94e43204e1f15b3cf1ff0997&searchtype=a 13 October 2000 Read More