Making an Investment in a Foreign Market Name: Institution Making an Investment in a Foreign Market Introduction As globalization intensifies, the business community tends to expand its operations towards the international market. This can be as a result of intense competition in the local market, need to increase sales and profits margins, to enhance the company’s prestige, to create jobs, to increase the value of the entrepreneurs among others (Bodie, 2013). Before going global, the company’s executive has to consider factors that favour or hinder their goal towards achieving international recognition in trade. This paper reviews the topic on “Making an Investment in a Foreign Market and factors considered. BP, a …show more content…
The high population of the middle class in the country also meant that the client base was almost ascertained. I also noted that Total’s presence in the market was a rivalry threat to the company. The suppliers of the product that the company intends to produce and sell were not yet ascertained and this provided a setback. After analysing all the factors that favour the company’s investment against those that deter its choice of investing, I ascertained that the increase in revenue of the firm and reduction in the cost of operating in the foreign market was a probability thereby the value of the firm would be increased (Kotler & Kotler, 2014). Rarity. I looked at whether the firm had a valuable resource or capability that made it unique and different from its competitor - Total. BP’s strategic statement indicates that the company intends to produce energy in a more efficient ways using new technology that will not only lead to production of clean products but also meet the consumers’ demands by providing competitive prices and products that fit the consumers’ preferences. Uniqueness could be achieved through product packaging, service delivery and advertising. Through packaging, I came up with the idea that we should package our products using environmentally friendly material, durable, easy to handle and clean material that would make the client fall in love with our products and differentiate it from other products. The kinds of
In a time of global commerce, new business ventures can take on many forms. What used to be local or even national companies have become world-wide. International growth of a business can be extremely beneficial but is not without its challenges. Different countries have different peoples and different cultures - different ways of doing business altogether. If a venture is to be successful, these differences must be well understood.
There are always business risk when it comes to expanding a company, especially from an international standpoint. There are many strategic risk that needs to be evaluated in order to expand the company successfully. Examining the possible risk of foreign currency exposure, basic functions of international banking/financial market, support of long term financing of operations, and assessment of opportunities that can be implemented within the company. There are risk on three dimensions of international finance, economic trends of the country, impact of globalization and monetary system. All of these situations will be discussed in this paper.
By taking a closer look into the different types of international business, it is helpful to first define the two major categories. All types of international business are sub-categories of equity and non-equity entry modes. These are different in their commitment level of spending resources, which is extremely difficult to transfer to other business units. Therefore, to choose the correct entry modes to other countries is one of the most critical strategy decision of a multinational enterprise (Decker and Zhao, 2004, p.1). In addition, the risk as well as the control is a major difference. The equity entry modes require more investments and are therefore riskier. However, the companies using an equity entry mode have more control over the
Mens Rea, or ‘the guilty mind’, is the intention to commit a criminal offence. It needs to be proven to show the accused consciously committed, or was aware of the crime.
There are many opportunities available for companies willing to venture into new, international markets. Reaching more customers and therefore, turning a larger profit are two fairly obvious reasons for companies to consider global expansion. However, the potential benefits do no end there. Expanding to international markets can hold less obvious, yet extremely beneficial appeals such as access to new and different talent pools, grander output requires great advances in efficiency, and international expansion can, in some cases, aid in “future proofing” the company.
As the world becomes more connected through the internet, many companies expand their businesses into foreign market space. According to Michalski (2015), the success of international expansion depends on the right market entry strategy, understanding of environmental factors, enterprise capacity, marketing activities (p. 111). In order to improve tis chance of success, a company should carefully examine various aspects of the business (i.e. performance, human resources, financial resources, production resources, and logistics resources), find ways to capitalize on its strengths, and remedy its weaknesses (Michalski, 2015, p.
Mihaela Belu Andreea Raluca Cărăgin Entering new foreign markets may be achieved in a variety of ways. Each of these ways places its unique demands on the company in terms of organizational and financial resources. Most of the times, entering international markets is not a matter of choice but of necessity to remain competitive in new or established markets. Our paper is going to analyze the possibilities that a company has when entering a foreign market, decision that is very important and which involves market assessment and analysis. Key words: Uppsala Model, Birkinshaw Model, exporting, franchising, licensing, strategic alliances JEL classification code: F21, F23,
In today’s business world every business houses want to expand their business globally as they want to take the advantage of
Small businesses wishing to enter international markets have a number of strategies they can pursue, ranging from simply selling their products directly to foreign consumers to setting up operating locations in foreign countries. Each of these strategies offers their own benefits and disadvantages, and requires differing levels of preparation, and resource commitment. However, once an organization adopts the global attitude (p. 381), any of these options or combination of options provides an excellent platform for successful global business operations. There are nine commonly accepted methods to engage in global business, which include: creating a web presence, trade intermediaries, joint ventures,
The process of penetrating and then developing an international market is a difficult one, which many companies still identify as an Achilles ' heel in their global capabilities. Two aspects of the typical approach are particularly striking. First, companies often pursue this new business opportunity with a focus on minimizing risk and investmentthe complete opposite of the approach usually advocated for genuine start-up situations. Second, from a marketing perspective, many companies break the founding principle of marketingthat a firm should start by analyzing the market, and then, and only then, decide on its offer in terms of products, services, and marketing programs. In fact, it is far more
Any company who wants to expand globally and to increase their trade at international must have to face certain challenges related to certain issues such as Economic, political, cultural, and social. The main drivers for expanding the business at international level is increase in the overall growth opportunities rise in the profitability, access to material and human resources and finally innovation.
In this project, a feasibility study for an organization that aspires to enter the global market is conducted. In this paper is an overview of the organization and the objectives with which the feasibility study aims to achieve. The business environment of the country to which the corporation aspires to enter as the global market is analyzed to ascertain its suitability. In this paper also are the challenges and opportunities for the organization that are available in the global market that is analyzed. Basically, this paper analyzes the viability of the corporation entering the specified global market and thereafter a decision on whether or not to enter the global market is made based on the findings of the analysis. It is worth noting that the information for the organization used in this project is fictitious.
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.
For businesses, emerging market has developed into a very well chosen destination for a firm operating well in their operating country which is looking for expansion. Developed markets usually hint at the considerations to per capita income. Limited growth opportunity and emerging market economies usually expect an availability of a larger amount of growth opportunity. In saying that, to maximize shareholders return and business enjoy showing their strength in their own country, companies showing interest in saturated markets may consider the need to take part in the emerging market to benefit largely. However, emerging markets is based around the transition to a more market-oriented economic system. But yes, it does come at the expense of risks to hurdle over for the already successful business, particularly from a cultural and economic point of view. If the risk is not responded to well, internationalizing into emerging markets may lead to heavy financial woes. This paper will analyse two recent business cases namely economist.com Japanese Electronics Firms: Eclipsed by Apple (2014) and Michael Chen’s Alcatel economictimes.com (ET Bureau 2014), which is working on moving into an emerging/developing market and analyse their barriers from those 2 factors.
Drug smuggling is considered as one of the illegal trades responsible for creating diverse negative impacts on the society as well as the global community, hence, the concerted efforts placed by many governments targeting at curbing it. This essay aims at analyzing the prevalence of the problem of drug smuggling in various countries and to point out potential reason that escalate the menace despite existence of efforts targeted at preventing it. Furthermore, the paper targets at offering reasons that prompt an individual to engage in smuggling activities as well as the resultant consequences to the society. Finally, it will offer recommendations on the best course of action that will foster prevention of the problem of drug smuggling in the global community.