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International Business

Par   •  25 Octobre 2018  •  1 744 Mots (7 Pages)  •  440 Vues

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I) The reason of going on international market :

- the saturation of market in which companies traditionally operate

- the specialization of the company on certain activities (limited number of potential buyers)

- the presence of strong competition in the country

- the scarcity of commercial outlets (search for new customers in foreign markets)

- the ambition to improve its competitive position based on direct economic parameters such as market size (volume activities) and the development of sales (turnover) is therefore an engine of internationalization of firms.

II) The management strategy :

Such strategic decisions belong to the management of the company. Thus, the internationalization of the company begin with the willingness of the management to propose its offer beyond national borders.

The international manager must analyze all factors simultaneously in order to make the right choices.

He must analyze the external environment : the consisting of competitors, governments, suppliers, substitutes, culture.

He must at the same time provide a political look of his company in order to identify its strengths and weaknesses.

The international manager must therefore determine a vision for the company for the long term, clearly define missions for the company in its own market and overseas, also the corporate culture of strength and ability to federate its team in all situations, also the compatibility between the company objectives and the resources available, the impact of the internationalization of the company on its organization system, and finally the compatibility between the supply and the demand for the company on the targeted market.

The mentality of the CEO will determine the choice of a commitment to the international.

This will be his vision, his ambition, but also his experiences in these areas that will give momentum (= élan) to the company for such an adventure (could explain why they are receiving such wages).

The manager must take account of the mission of the purpose of the company, such mission is of course based on the values of the company which are the basic principals of its culture.

- missions have to be based on the values of the company in order to have a good brand image and be coherent

- for example if the company has some ecological values, it has to act with a certain ethic

This culture represents the mentality and the way of doing the business. The mentality of the company allows (or not) to federate the team around shared values and for sure the feeling of belonging (= appartenance) and loyalty.

This is important when national teams are required to work in multicultural teams.

The managing team should raised awareness among its team that the international environment is an asset to all, and enhance the strength of the company.

The manager must therefore give a boost to the company by conducting a relevant analysis of the internal and external environment but also will have to take into account the benefits and limitations of his business.

The manager must insure that the company has sufficient organizational flexibility before going on the foreign market.

Indeed, the constraints from outside can change the habits and the company's working method. The organizational system can face negative consequences on several levels in the company (control, suppliers, psychological…).

One of the major strength of the current manager is his responsiveness and adaptability. Everything goes very fast, emerging countries such as BRICS are changing and developing very quickly. The creativity of these countries changes the dynamism of the international market which is also becoming more dynamic.

The environment can't be limited to a specific part of the globe. We must think where to supply, where should we recruit employees and where can we find customers.

To conduct researches in the world, and to manage international network, it's necessary to know the technological information data base, video conferencing etc.

We must have access to all information very quickly in order to take quick decisions.

We have to rely on the technology but also on our teams, themselves located all over the world and always on standby. Any new market information must be identified and recorded for later use.

III) Political environment :

The question of internationalization is directly linked to political stability. This is an important criterion for selecting the market in which the company wishes to establish.

If on the one hand, national authorities are never indifferent to the implementation of foreign companies, on the other hand, the political stability of a country is a condition to be taken into account for the establishment of the company.

For instance, France is interested of the implementation of others companies, like Siemens, Toyota…

Successive governments will not necessarily follow the same policy of the foreign investment approach and might have some very favorable conditions of development of the business at one time and unfavorable to others, with some impact on profitability in the long term.

Moreover, ethnicity and religion are also managed by the government.

For example, in some countries, it's mandatory to hire a certain percentage of local labor. Sometime, you will have to respect quotas, set by the government, in term of hiring people belonging to different ethnic groups, religions and sexes.

Among the risks entailed, the company could face financial, physical and psychological risks (terrorist attack, kidnapping, and any other type of aggression).

The teams and managers must demonstrate a flexibility and adaptability that prevent them from being depressed. Moreover, the risks also depend on the degree of xenophobia, prevailing in the host country.

IV) Economic environment :



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