Challenges
One of the challenges that an international executive might face is aligning the operations and the products and services of the business with the cultures of different regional markets around the globe. For instance, businesses that are oriented to low-context cultures in the West are likely to face challenges aligning their operations in areas like promotions and marketing with the demands of high-context cultures that are predominant in the Eastern regions of the globe.
Another challenge is ensuring compliance with the different laws and regulations that are prevalent in different locations around the globe. Most of the applicable business laws and regulations change from one jurisdiction to another. Also, some of these laws, especially in emerging economies are developed to perpetuate the protectionist ideals of the governments aimed at protecting local industries from external competition (Sage, 2015). The sporadic nature of the changes in the laws presents a high level of uncertainty to international executives when deciding whether to venture into such markets and the best strategies that can be used to promote the business without contravening the laws.
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The third challenge is the development of a centralized communication system for a business that has employees and operations in different parts of the globe. The business is likely to apply different technological systems to facilitate the integration of its operations in each country. However, such systems could be incompatible thereby hindering the levels of efficiency in the coordination of business activities on a global scale. Also, some of the global regions, especially in the developing economies are likely to experience poor infrastructural developments in areas like communications. It makes the areas experience poor internet connectivity that hinders the facilities in such regions from remaining in continuous communication with other subsidiaries of the business in other regions.
Opportunities
One of the opportunities is the availability of a large global market for the firm to market and sell its products and services. The global market presents the firm with a high number of potential customers that can be targeted to ensure the firm expands its customer base and increases its global market share. The availability of the enlarged market offers benefits like higher sales and revenue volumes for the firm and also the possibility of exploiting the economies of scale.
Secondly, globalization also provides a business with the opportunity to explore new business models and technologies to enhance its competitiveness. The firm becomes exposed to a wide array of competitors that utilize different business formats and models to enhance their competitiveness. It becomes easier for the business to evaluate such business models and technologies and develop succinct strategies of exploiting them in different markets. For instance, businesses are adopting brick and mortar stores in some regions while in others they operate through online stores or both to enhance their competitiveness.
Thirdly, globalization exposes the firm to a bigger resource pool that can be exploited to lower the operational costs of the business. For instance, businesses can easily seek raw materials and human resources from regions where the resources are cheaper. Such capabilities enhance the competitiveness of the firm’s products in the market as lower costs of production saves finances that can be directed to other activities like research and marketing that add value to the business.
Solutions
To align the operations of the business and its products to other cultures, it is vital for the business to explore different market entry strategies to minimize any negative impacts that the culture of the new market or country has on its operations. For instance, a business can venture into the new market through a joint venture with a local entity in the new market. The strategy makes its easier for the business to adapt its operations to the local norms, beliefs and practices that enhances the acceptability of its products.
It is also necessary for the business to conduct market analyses to gather information and insights into the characteristics of the targeted market and devise strategies of aligning their products and operations to the characteristics. For instance, when venturing into regions oriented towards high-context cultures that are collectivist in nature, western businesses can brand their products with local names and images to minimize the risks of the products being considered foreign as individuals in these cultures prefer local brands.
To enhance compliance with different laws and regulations in different jurisdictions, businesses must engage local legal professionals to ensure they are updated on any substantive changes to the laws and the implications of such changes.
It is also necessary for the businesses to utilize current technologies such as developing intranet networks to facilitate easier of flow of information amongst its branches and subsidiaries located in different parts of the globe. It is also necessary for the business to contract communication service providers to get customized products to meet its communication needs.
One of the ways of exploiting the opportunity of availability of a large global market is by extension of the firm’s product line. A business should develop more products to ensure it is present in different market segments across the globe. Such presence places the firm at an advantage of benefiting from economies of scale as it is easier to experience higher profits-per customer. Also, the firm should explore different ways of presenting its products to customers. For example, it can exploit online technologies and offer its products on its website and also online payment options. The customers that place their orders can then meet the costs of shipping the products or sending them by courier. Such efforts enhance the reach of the business to different markets globally that improve its bottom lines and market visibility (Bishop, Reinke & Adams, 2013).
The opportunity of availability of different business models and technologies can be exploited through conducting market analyses and identifying the best model that suits every market. For instance, a business in the retail sector can utilize a franchise model when venturing into new markets where property leases are high. Such a model ensures the business can access the targeted market easily and be present in strategic locations.
The ease of access by the business to large pools of resources can be exploited by adopting international recruitment strategies where it can access the best talents from the market. The firm can also outsource its human resource function to reputable human resource industry players to ensure it captures the best talents. To guarantee exploitation of cheaper raw materials and low costs of labor, a business can open operational facilities in countries where such raw materials and labor are available.
The opening of the facilities promotes optimal exploitation of the comparative advantages present in that market in terms of cheaper raw materials and labor. Most of the operations that are shifted to such locations are primarily the most labor intensive activities, especially for firms that are in the manufacturing and assembly industries. It minimizes the costs of acquiring the raw materials and the labor costs that improve the firm’s bottom lines.
References
Bishop, T., Reinke, J. & Adams, T. (2013). Globalization: Trends and perspectives. Journal of International Business Research , 10(1): 34-47.
Sage, C. (2015). Globalization: Prospects and problems . New York. Pearson.
