Opportunities
Planning an international business venture is not a walk in the park for most of the strategic managers. In the modern world, there have risen chances that have eased the planning of the international business ventures. One of the opportunities is the development of the global web design (Aaron, 2001). The universal web design in the twenty-first century has been an essential development in the marketing and delivery of the products around the world. The global web designs have provided numerous opportunities for companies to let their customers know of their products and services without the latter having to travel to the physical locations of the businesses (Aaron, 2001). An upcoming international venture can take advantage of that. The distribution channels have also been modernized, and they have been dependent on the advancement of technology to facelift them (Aaron, 2001).
The other opportunity in the international business strategic planning is the index of economic freedom. Research has concluded that the economic freedom is an essential factor in the growth of a country's economy (Miller, Holmes & Feulner, 2013). Given that, many countries are in what may seem like a race to achieve economic freedom. That will open up the chances of opening up the international businesses and ease the work of the strategic managers as they look for the unexplored markets for their companies to venture into and expand the entire organization (Miller, Holmes & Feulner, 2013). Therefore, the cultures around the world that value economic freedom will provide the best grounds to establish the branches and subsidiaries of a company that is aspiring to join the international market. Economically free societies have also been reported to respond positively to the advancement of technology in different spheres of life such as money management and marketing (Miller, Holmes & Feulner, 2013).
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The diminishing of the poverty class and the emergence of the middle class. Regarding financial capability, the middle class has economic prowess compared to the poverty class. That signifies that when people transit to the middle class, they can afford some of the products and services that they previously regarded as luxuries (ILO, 2014). That is an opportunity for the businesses that want to diversify their product distribution and focus on the world rather than just their localities. Labor productivity has also risen in the countries where the majority of the people who used to be in the poor class have migrated to the middle class. Therefore, the people in such countries can work as qualified employees in the companies that may want to hire them and focus on the international market (ILO, 2014).
The substantial increase in the labor productivity and particularly in the developing countries in the world has increased the standards of living for the citizens of such nations (Perlmutter, 2017). The rise in the living standards has provided opportunities for the international businesses to market their products and distribute them in line with the technological standards. They are assured of targeting a broader market in the long run (Perlmutter, 2017). The strategic management planning for the companies may also indicate that more people can afford the product that they are advertising without financial strains. Therefore, the improvement in the standards of living of the people becomes an advantage to the companies (Boulouta & Pitelis, 2014).
The other opportunity in international strategic planning is the increase in the investments and the consumption by the various countries (Penrose, 2017). Increasingly, the governments in the different countries across the globe have worked hard to promote business activities among their citizens (Penrose, 2017). Some of the ways that they have been supporting economic development are by attracting foreign investors and entrepreneurs and coming up with friendly policies that favor venture startups and diversifications (Johanson & Mattsson, 2015). That will provide opportunities for the development of the markets where the international businesses can have their shares. The increase in the investment activities has opened up the markets by increasing the consumer consumption rates (Fernhaber, Gilbert & McDougall, 2014).
Challenges
On the other hand, the planning of an international business venture has been affected by various difficulties. One of the problems is the cultural barriers that have faced the use of technology in the global businesses. The following are the Hofstede's dimensions of culture that explain the issue of the cultural obstacles to the use of technology in the modern companies.
Power distance
Power distance refers to the extent to which the less powerful members of a society accept the unequal distribution of power in the community (Hutzschenreuter, Kleindienst & Lange, 2016). Populations in different countries across the globe have different levels of power distance, which makes it hard for the businesses to target the various members of the society with different capabilities (Hutzschenreuter, Kleindienst & Lange, 2016). The power distance levels may also affect the ability of the people to manage information negatively which may undermine the efforts that international businesses have invested and especially in web design for marketing and distribution(Hutzschenreuter, Kleindienst & Lange, 2016).
Collectivism versus individualism
Cohesion into groups is a system that is usually practiced in the collectivist societies. In the individualist societies, people have grown up with a mentality of looking after themselves and less to those around them, whether good or bad. In the embracing of change in the marketing and distribution models of the future international business, the individualistic personalities will focus on what is creative and new. Conversely, the collectivists will focus on what is a tradition. Therefore, the marketing of the technological changes to the collectivist markets may prove to be an uphill task for the strategic managers of the business.
Femininity versus masculinity
Some of the websites that have been used in the marketing and distribution of the products by the multinational companies have appealed to either the masculine or the feminine gender. As such, the strategic management of the future business has to research a lot on the web design to come up with a web design that appeals to both genders at the same time. That may prove challenging and consume a lot of time and money. The products that the business might be advertising may also be regarded as belonging to a particular gender in a given community, which may lead to unfulfilled marketing ambitions.
Uncertainty avoidance
The distinct communities in the different parts of the world may have uncertainties to a certain extent. Unlike the known and understood threats, which can be mitigated, forces such as technology in business and money management may come up with unperceived risks (Parnell, Long & Lester, 2015). Various cultures may react to that by fearing the exposure to the dangers. Such a mentality may derail the marketing efforts of the business. People from the cultures with a high uncertainty avoidance are expressive and focus on operations rather than a strategy. On the other hand, people from the cultures with low levels of uncertainty avoidance may want to focus on strategies, which are long-term than on the day-to-day operations such as in a business. The strategic management of the new company has to take care of that when wishing to employ people from such cultures (Parnell, Long & Lester, 2015).
Long versus short-term orientation
The people from cultures that focus on the long-term orientation will focus on content related to practice and practical value. On the other hand, the people from communities that focus on the short-term orientation will focus on the content that is related to truth and the certainty of beliefs. It may prove to be difficult in dealing with the two kinds of customers, employees, and shareholders of the company. That may lead to low records of the financial performance where the international business focuses either on the long-term orientation cultures or short-term orientation ones.
References
Aaron, M. (2001). Cultural Dimensions and Global Web Design: What? So What? Now What? Aaron Marcus and Associates, Inc .
Boulouta, I., & Pitelis, C. N. (2014). Who needs CSR? The impact of corporate social Responsibility on national competitiveness. Journal of business ethics , 119 (3), 349-364.
Fernhaber, S. A., Gilbert, B. A., & McDougall, P. P. (2014). International entrepreneurship and Geographic location: an empirical examination of new venture internationalization. In Location of International Business Activities (pp. 94-136). Palgrave Macmillan, London.
Hutzschenreuter, T., Kleindienst, I., & Lange, S. (2016). The concept of distance in international Business research: A review and research agenda. International Journal of Management Reviews , 18 (2), 160-179.
ILO. (2014). World of Work Report 2014: developing with jobs . International Labour Office.
Johanson, J., & Mattsson, L. G. (2015). Internationalisation in industrial systems—a network Approach. In Knowledge, networks and power (pp. 111-132). Palgrave Macmillan, London.
Miller, T., Holmes, K. R., & Feulner, E. J. (2013). Index of Economic Freedom (Washington DC: The Heritage foundation and Dow Jones and Company, lnc., 2013).
Parnell, J. A., Long, Z., & Lester, D. (2015). Competitive strategy, capabilities and uncertainty in Small and medium sized enterprises (SMEs) in China and the United States. Management Decision , 53 (2), 402-431.
Penrose, E. T. (2017). Foreign Investment and the Growth of the Firm 1. In International Business (pp. 33-48). Routledge.
Perlmutter, H. V. (2017). The tortuous evolution of the multinational corporation. In International Business (pp. 117-126). Routledge.
