Question

From the real national market, select any company of your choice in Saudi Arabia , wishing to go global. Critically analyze the chosen company based on the following questions.

Questions:

1. What variables need to be considered while developing a list of potential countries?   
2. Describe the four steps a firm should take when it is considering going global.                  
3. Discuss at least three challenges that a company may face in the early period of expansion.
4. Describe the three main categories of market entry strategies.

it should be unique answers

Answer 1

The Saudi arabian company chosen is Al- Rajhi Bank.

While developing a list of potentional contries, some of the variables to be considered are as follows-

1) Demand or need in the market- It is important that there is need and demand for that particular product or service being offered. If there are already abundant number of people selling the particular product or service then it leads to higher level of competetion and eventually prevents the business from succeeding.
2) Understanding the cultural preferences and rules & regulations of the area- It is important that cultural preferences and rules & regulation of the area are properly acknowledged, It vital to know what the people of that culture may prefer to buy and what would be liked by the society.
3) Building a local network- Entering a new market may require a company to make a number of acquisitions so they have appropriate premises to operate from, or perhaps they will be looking for partners, distributors.

Four steps a firm should take when it is considering going global.

1. Determine if going global would be right - Introducing the business to a foreign market could be risky, and not all businesses are suited to an internationally. Researching and anlysing target markets to determine whether the product or service has the potential to sell or not. Is there demand for the product? Are the new markets aware with your concept, or will it have work on educating potential clients.

2. Finding compatible business models -  Expanding to markets that are majorly compatible with your present model will facilitate your business interactions. Considering factors such as language,currency,proximity and trade barriers. If it plans on exporting, doing so is simpler in markets with conditions similar to those in our own country.

3. Finding the right translation service-  For many businesses, language barriers are  the biggest challenges when they plan on expanding to foreign markets. If they plan on expanding to one of the top 15 markets, there’s a 60 % chance that the customers will speak minimal english.

4. Developing global business plan- Every foreign market has its own different governmental, economic, and cultural environments, and the business plan won’t translate directly. For each market to expand to, the business must form a strategy that advances the business while remaining loyal to the mission and brand. Creating short-term and long-term goals and targets as well as a calculated project strategy with deadlines.

Three challenges that a company may face in the early period of expansion

1) Human Resource- it is one the biggest challenge a company may face in the early period of expansion. It is important for the company to hire the right human resource which enables it in proper functioning.

2) Unfamiliar Cultures - Unfamiliar cultures is also a barrier in early period of expansion as a business should be aware of the norms of the various culture and should not hurt sentiments of the society.

3) Tariffs and Export Fees - Most countries have some type of tariff or fee that is charged from the companies bringing goods into the country. It is important to know about these tariffs so that they could be incorporated into the financial planning element of globalisation plans.

Three main categories of market entry strategies.

1) Franchising - Franchising is a process for rapid market expansion but it is gaining attraction in other parts of the world. Franchising works well for business that have a repeatable business model (eg. food outlets like mcdonalds) that can be easily transferred into other markets.

2) Partnering - Partnering is nearly a necessity when stepping into foreign markets and in some parts of the world it is required. Partnering can take various forms from a simple co-marketing arrangement to a sophisticated strategic alliance for manufacturing.

3) Direct Exporting-  Direct exporting is selling directly into the market selected using in the first instance of your own resources. Many companies, after they have built a sales program turn to agents and distributors to represent them further in particular markets.