Domestic Business in Foreign Countries - Report Example

A Report about Global Business Expansion A report about global Business Expansion The global expansion of businesses occurs whenthe domestic markets of the business hit the revenue goals and inflow of customers where the seniors decide and plan on how they can gain more customers by investing in foreign countries. There are various international strategies that an organization should consider for a successful market overseas. An organization should coach expatriates from domestic country to go and explore the succession of the business in foreign countries. A sluggish economy can also lead for an organization to seek new market overseas abroad. A domestic organization should also consider various factors such as cultural differences and regulatory among countries and identify suitable regions for organization’s expansion (Aswathappa, 2010). The paper will discuss in details a report written by the organization’s CEO about the advantages of investing abroad and all business strategies required for fruitful market overseas. The board of directors, the executive committee and potential workers willing to be expatriates about will in regard to the report. The countries that the domestic business’s CEO has chosen to expand the business are Germany and Singapore. There are various ways that can cause a domestic business to expand into foreign countries. Domestic business can aim at increasing the products and sales in potential markets. The tactic only requires different pricing strategies, bigger region, and new marketing techniques (Aswathappa, 2010). The second tactic involves the need of introducing a new product. The tactic depend on whether the business was offering a successful service or product for a period of time and was collecting customer feedback, data and analyzing the newest product. The business may also aim to move to a new location or create a new demographic segment which requires better testing, market research, and modern marketing strategies. Creating a chain and franchising are other ways that can cause the domestic business to expand its markets into foreign countries. Creating a chain is the fifth way involving hotels or retail businesses. Joining forces or forming a strategic alliance is the sixth way where merging of two businesses expands customer base, delivers outfitted efficiencies and increases intellectual resources (Aswathappa, 2010). Moving internationally can grow the markets, improve business economic climate or rise consumer spending. However, the aim of the domestic company being discussed is to expand its business markets globally to increase products and sales of the existing retail markets and introduce a new product. The domestic company aims at expanding its market overseas into Germany because the country has a strong economy and incredible transport links. The country also has the largest population, economy and market in the EU giving it an advantage of knowing all EU strengths and weakness (Koeckeritz, 2015). Few restrictions over inventing new business in Germany make it easier for the domestic business market to go and invest there. The citizens of Germany speak fluent English making it an added advantage to the domestic business investing there. There are thousands of medium and small sized businesses in Germany, but there is still room for investing other businesses. Some of the businesses found in Germany are machinery sectors, chemical sectors, motor-vehicles sectors, metal manufacturing, foodstuffs and consumer electronics among others (Koeckeritz, 2015). Adequate information about better business and domestic organization can facilitate on forming market entry strategies. The domestic organization wants to expand its retail business involving selling foodstuffs which are successful in the home country. The expatriates chosen should, therefore, be able to understand the new customers in Germany considering their characteristics, patterns and impulses of buying. The gathered information will assist the domestic organization in building a business plan and strategies to enter into Germanys’ markets. Berlin will be the best city to invest because it has a large population of people who can provide market overseas of the retail products. Singapore is another country that the domestic organization can invest in. Singapore considers people who spit their chewing gum in towns and streets as naughty and are arrested. Therefore, the expatriates should be considerate on that issue. Singapore is the most enjoyable city full of pubs, clubs, and restaurants. It has a cultural mixture of many people from Asian countries (International Business Publications, 2012). The place is considered to be very clean, too efficient and too modern for foreign direct investors. There are various reasons why the domestic organization wants to invest in Singapore. The World Bank report shows that Singapore is the best in the ease of venturing new businesses, and its location can serve the markets of South-East Asians. The newly ventured businesses in Singapore are low taxed, and the country has favorable trading conditions. The Singapore’s government also assists entrepreneurs financially into investing new businesses in the country through Economic Development Fund. Singapore also assists entrepreneurs in marketing, give development support and provide the new investors with intellectual properties (International Business Publications, 2012). Getting an employment card in Singapore takes only fourteen days. Singapore also has most productive skilled workers in the world. Licensing or incorporating a newly invested business in Singapore is easy and cheap. Advanced engineering, creative industries, education and training, oil and gas, ICT and financial services are the main productive sectors found in Singapore. The domestic organization can, therefore, invest in oil and gas in Singapore specifically an energy industry. The domestic organization will generate new energy technologies that will keep the industry more competitive from the existing oil and gas industries. However, there are some challenges that global investors face in foreign countries. It is more challenging for a new business to setup a link with the foreign Economic Development Fund of a certain country which offers the financial support of new businesses (International Business Publications, 2012). It is also difficult for a new business start operating in a free and open trading environment without corruption and has low taxation. Repatriation experience of the employees starts at home country before they leave into foreign countries. The domestic organization will set realistic expectations about expatriates’ compensation and career advancement. The assignments of the expatriates will be developmental and not task oriented which they will be answerable after coming back. The expatriates will be formally selected according to their qualifications particularly speaking in some foreign languages. The domestic organization will give an outline to the expatriates on how and what they are expected to explore about investing in Germany and Singapore. There should be also a good mentor relationship between the expatriates and the senior executives. Within the two years of being in Germany and Singapore, there should be regular communications among the expatriates and senior executives when executives are advising the expatriates on how to conduct the assignment. Expatriates will also be provided with the time of visiting their home countries within those two years where they can also interact with their family members. It is the role of the executive committees to keep the expatriates as the forefronts of a successive foreign investment business plan. The tracking system of the expatriates will be established and encourage sharing of experiences among expatriates within those two years. Lastly, the expatriates will fill in the questionnaire about investing in both countries to record the information and data that is retrievable. The highlighted things will the requirements for the expatriates willing to go and assess about the business investment in Germany and Singapore for two years. The information and data that will be acquired by the expatriates will useful in developing business plans for the businesses to be invested in the two countries. The assignment is very simple to every employee because like in Germany most people there speak fluent English, which is a national language. Communications with Singapore’s will be very challenging but the country provide with interpreters at lower charges. The expatriates will get allowances that will not be fixed, but will depend on their demand in the foreign countries. There are some pros and cons of using expatriates in investing abroad as discussed. The expatriates acquire the business and technical skills that are locally unavailable, have the knowledge of setting up competing businesses and do not recognize their home countries more than the domestic company (Keillor & Wilkinson, 2011). Some cons include high costs of covering hardship, housing, relocation and education allowances and having expatriates who have a shortsighted focus on the new business. Business rejuvenation, greater exposure, favorable business climate and untapped markets are some merits of doing business overseas. The domestic organization will offer services and products in other at a reasonable price and with high demand that are not available in many countries making its competition very high. Secondly, the foreign country may offer favorable economic conditions like low taxation in Singapore encourages many foreign investors. Offering few environmental regulations also encourages more foreign investments. Investing in various foreign countries will bring superior brand recognition of the business globally (Keillor & Wilkinson, 2011). The organization will also attain respect from potential business partners and customers in the home country. The final advantage is business rejuvenation where it helps the businesses that engage in struggling enterprises. Many businesses depend on scarce resources in the home country, therefore, the need of finding a market overseas abroad. In conclusion, investing in foreign countries with the better economy can make profits to domestic investors which can assist them in investing in other countries. Assessing the market overseas of a new business to the foreign countries is only required where knowledgeable and skilled expatriates are required. The CEO’s and the executive committees of various domestic companies need to prepare a guide that their expatriates will use in the foreign countries where they need to invest. Two to three are the enough time that expatriates should take in assessing market overseas of a business in the foreign country. Expatriates should seek suitable locations for investments. High costs of covering hardship, housing, relocation and education allowances and having expatriates who have a shortsighted focus about the new business are the demerits that can hinder a domestic company investing into foreign countries. References Aswathappa, K. (2010). International business. New Delhi: Tata McGraw Hill Education. International Business Publications, USA. (2012). Singapore Investment and Business Guide: Strategic and Practical Information. Intl Business Pubns USA. Keillor, B. D., & Wilkinson, T. J. (2011). International business in the 21st century. Santa Barbara, Calif: Praeger. Koeckeritz, M. (2015). The preparation of German entrepreneurs for the different cultural peculiarities of negotiations with Chinese business partners: A MBA-dissertation submitted to The University of Liverpool in 2005. Norderstedt: Books on Demand. Read More