Question

You’ve developed a very popular, up-scale but reasonably priced, clothing fashion line for young people. You produce designs in a number of countries, manufacturing in low-cost locations, and with retail outlets in major U.S. and European cities. Demand is popping and you have access to plenty of production capacity and capital.

Answer the following questions:

• How should you organize the business outside of the U.S.?
• Should you set-up reasonably independent companies, subsidiaries, in each foreign market?
• What would that do and not do for you?
• Or, do you want to impose a strict brand image, procedures, and central planning from headquarters, where your offices are?
• What are the pros and cons of this approach?

Answer 1

ANSWER 1-

  These days the word global buzzes everywhere, from the farthest reaches of China to the hopping metropolises of Kenya, but what does global really mean? Organizations and individuals can conduct international business without having a global mindset, and they might not know the difference. As an intercultural business consultant, I have observed a number of behaviors and mindsets that contribute to a truly global organization. Here are my top ten tips for doing business outside the United States. There are some tips given below -

1. Behave as a united team, not as a divided competitor
Whether or not you work for the same company, if you are doing business outside the United States, you are part of a global team. Apply best team practices, such as creating role clarity and well-defined expectations, building personal relationships, and aligning with the same goals.
Best of luck in your global business endeavors, and let’s keep adding to this list. I look forward to our continued dialogue.
2. Create specific protocols for business across borders
Working outside the United States means significant time-zone differences that can wreak havoc on business. Develop a Time Zone Protocol where all involved agree on how the time zone will be handled. For example, everyone should put their business hours and time zone in their e-mail signature for easy use

.3. Fall in love with accents
At a recent conference, a discussion came up about struggles with accents, especially in virtual communication. One of my colleagues said, “I tell my clients to fall in love with accents.” I fell in love with that statement. Everyone has an accent of some sort, and we must not give up seeking to understand each other. Take on the challenge and ask people to repeat things or slow down.

4. Ask open-ended questions rather than closed yes-or-no questions
In many cultures, a “yes” doesn’t always mean “yes.” The desire to accommodate a customer or save the face of a family member may lead to a reduced use of the word no. To avoid confusion, ask open-ended questions. For example, rather than asking “Do you have any questions?” ask “What questions do you have?”

5. Write down the name of your hotel in the local language
This tip may seem obvious, but many business travelers leave their hotels carrying a client address in the local language, but not the address of the hotel. When you leave your hotel, have the staff write down the name and address in the local language and keep it with you at all times.

6. Have fun and enjoy the rewards of culture
Create opportunities to share culture, such as festivals, international lunches, film screenings, music, or heritage events with your business associates. When you travel outside the USA, say “yes” to city tours with your clients, unusual foods, or chats with taxi drivers.

7. Use the magic phrase “I don’t know”
Imagine you are walking and see your French colleague. You smile warmly and say hello. In return you receive a short nod before your colleague looks away. You may think, “How rude!” Future interactions with the French co-worker become negative because you assume he is unfriendly. Why did your French colleague behave that way? Saying “I don’t know” allows for many possible answers; it allows you to wait, gather more information, and ask questions.

8. Avoid projected similarity
One of the most significant barriers to successful global business is our perception of other cultures. Let’s say an American gets an overseas assignment in Britain. He thinks, “I won’t get culture shock in England. They’re just like us.” He gets to England and discovers that, as George Bernard Shaw stated, “America and Britain are two nations divided by a common language.” Look for common ground, but assume differences are present.

9. Learn what locals are called
Some names for locals are easy. People from Germany are called Germans in the English language, for example. What about locals from Manila, Philippines, or Puebla, Mexico? You may not know that Manilites or Poblanos reside there. In negotiating high-stakes deals or winning new business, details like these can make a big difference. For a handy reference, check out the book Labels for Locals by Paul Dickson.

10. Polish your virtual communication skills
The majority of business conducted outside of the United States is virtual, using myriad technologies. Virtual effectiveness, however, is 10% technology and 90% relationship building. Inject warmth into your e-mails with salutations and greetings or send virtual team members a photograph of yourself. Stay abreast of new virtual communication technologies and find creative ways to connect.
ANSWER 2- For any company contemplating expanding into a new market, the advantages and disadvantages of setting up a branch or foreign subsidiary will depend on the business opportunities, as well as the cultural and regulatory climate of the specific country. There are challenges associated with overseas expansion, and while some business issues are universal, such as complying with payroll regulations, other elements are more country-specific and require research into potential solutions to prevent unexpected delays or costs.

Setting up a subsidiary in a foreign country can have many positive effects such as expanding brand recognition, opening access to new markets and using efficient production methods to control costs. Entering a new location can mean increased revenue and business expansion that would not be possible in the home country.

However, in order to initiate a worthwhile venture in each new country, a company must consider factors such as:

• Cost and time to establish a foreign subsidiary
• Corporate policy toward compensation and other HR issues
• Compliance risk for payroll, taxation and immigration rules
• Establishing secure office premises, employee residences and bank accounts
• Evaluating the growth potential against the required investment
• Permanent establishment issues resulting in taxable local revenue
• Contingency plans in the event that the new foreign office needs to be closed

There are eight reasons that could influence the establishment of a foreign branch. These reasons will be illustrated in the following paragraphs by identifying the advantages and disadvantages that could arise from establishing foreign subsidiaries in specific countries or regions.

  1. Opening Up Access to New Markets For Products and Services.

2. Expanding Brand Recognition

  3. More Cost-Effective Production and Manufacturing

4. Access to Technical Skills / Regional Knowledge

5. Customer Service Centers

6. Part of a Global Expansion Plan

7. Use of Free Trade

8. Participating in Local Economic Opportunities

What Is Involved in Closing Down a Foreign Subsidiary?

If the expansion into a new market does not meet expectations, then it may be necessary for a company to close down a foreign branch or subsidiary.  While the more obvious tasks of repatriating employees to the home country may be straightforward, there are other issues that must be attended to in the process such as:

• Obtaining funds from any capital investment requirements
• Re-negotiating office leases that may have early-termination penalties
• Payment of vendors or local suppliers for products and services received or under contract
• Final payroll administration, withholding, taxes and other contributions
• Transfer of office equipment, files and documents
• Securing electronic data and files
• Closing of bank accounts and terminating other professional services

These steps can be simplified if the payroll, tax and immigration processes were being handles by a GEO service, and then the company would only need to facilitate transfer of employees and physical assets. For this reason, many companies decide to use a GEO service for the initial entry into a country, which allows for more rapid deployment and minimizes the risk and financial exposure while testing the new market.

ANSWER 3 -

Do best things for outside country business which things good for increased our business. like - international market , demand or its supply.

Do not avoid opportunities coming from international market.

Answer 4 -

Many Best Ways to Make Strategy

1 Bolder Strategies, Slower Decisions

In many companies headquarters is deeply involved in strategy. Unit managers formulate proposals, but headquarters reserves the right to have the final say. The rationale is simple. As one senior manager commented to us, “There are two or three decisions each decade that make or break a business. Do you really want to leave the business manager alone to make them?” BP, the BOC Group, Cadbury Schweppes, Lex Service Group, STC, and United Biscuits (UB) are among the companies that do not.

2 Better Financials, Less Innovation

The “financial control” style is almost a reverse image of the strategic planning style (see the sidebar, “The Styles Matrix”). Responsibility for strategy development rests squarely on the shoulders of business unit managers. Headquarters does not formally review strategic plans. Instead, it exerts influence through short-term budgetary control. The objective is to get the business units to put forward tough but achievable profit targets that will provide both a high return on capital and year-to-year growth.

3 More Balance, Less Clarity

Companies that follow a “strategic control” style aim to capture the advantages of the other two while avoiding their weaknesses. In practice, however, the tensions involved in balancing control and decentralization make this style of management the hardest to execute because it creates ambiguity.

At best, a strategic control system accommodates both the need to build a business and the need to maximize financial performance. Responsibility for strategy rests with the business and division managers. But strategies must be approved by headquarters. For this purpose, there is an elaborate planning process. Corporate executives use the planning reviews to test logic, to pinpoint weak arguments, and to encourage businesses to raise the quality of their strategic thinking. They also judge whether or not the appropriate balance is being struck between investing to build a business and pushing for short-term financial performance, often with the use of portfolio planning systems.

Financial targets are set in a separate budgeting process. The strategic plan and the budget sometimes pull in opposite directions, and one or the other may have to give. One manager commented, “It’s normal for risky investments to drop out of the plan as it gets turned into the budget.” It is this tension between the plan and the budget that helps to maintain a balance between new development ideas and cash generation.

Once headquarters has approved a plan and a budget, it attempts to monitor businesses against strategic milestones, such as market share, as well as budgeted performance. The tension between strategic milestones and financial ratios, along with that between the planning and budgeting systems, creates uncertainty and ambiguity. Every business in the portfolio wants to be viewed as a growth prospect. Yet some must be cash cows. As a result, objectives can become confused and the planning process can be a political platform.

4 The Right Fit

As we’ve seen, there are at least three ways to divide responsibility between corporate executives and business unit managers. We believe these different styles exist because of certain tensions implicit in the role of corporate management. Virtually all executives want strong leadership from the center, coordinated strategies that build in a variety of viewpoints, careful analysis of decisions, long-term thinking, and flexibility. But they also want autonomy for unit managers, clear accountability, the freedom to respond entrepreneurially to opportunities, superior short-term results, and tight controls.

The two sets of wishes are contradictory. Central leadership, if it has any teeth, inhibits business autonomy. Coordinated strategies detract from personal accountability. Thorough reviews preclude quick entrepreneurial responses. Long-term plans compromise short-term performance. Flexibility is at odds with precise adherence to planned objectives.

Successful corporations make trade-offs between these choices and draw on the combination that best fits the businesses in their portfolios. Is it worth sacrificing tight control and individual responsibility to build up core businesses? Do the benefits of clear goals and devolved responsibility outweigh the dangers of risk aversion and short-term thinking? Can managers cope with the ambiguity needed to achieve a balanced approach across a diverse portfolio? The answers depend on the very things top management knows best—the characteristics of its businesses and the people who make them work.