Question

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

• The choice of the company and the selection of countries must be based on referenced information. (Why did you select the country and the company?)

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.

Answer 1

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I am assuming my company as "XYZ Ltd" based out of the USA and want to take it global.

1. Variables need to be considered while developing a list of potential countries

A. Environment and Market Analysis – I will put together a shortlist of countries that present a potential concentration of my target market and analyze various things like Political factors, country risk, GDP growth, multiple international index, operational difficulties, market appeals, etc.

B. Analysis of the competition – I will identify my main competitor and study their economic evolution and sales over a few years, distribution channel, financial position, expansion strategy, development plans, etc.

C. Distribution channel analysis – I will track the supply chain of my product, from its origins to its final customer via international distribution, local distributor, internet, etc.

D. Demand analysis – I will be analyzing the current and potential demand of my product in its source market, as well as its profile and expected evolution.

2. Four steps I will consider while going global

A. Culture - I will first try to understand the culture of the targeted countries. It is very important to know who lives in the community and what they value. I will try to understand how to conduct business among the local markets so that I should be able to meet their desire.

B.  Legal and regulatory barriers – I will understand the local laws and regulations to make my business flexible over there. I will also seek a piece of advice from an experienced counsel to identify hazards that may act as a barrier for my business prosperity.

C. Foreign government consideration – I will consider various other aspects related to local government authority such as currency exchange rates, communication and transportation options, protection policies for businesses, immigration and employment laws, Government assistance programs for businesses, and access to affordable capital

D. Business case – I will perform a market study to understand the economic feasibility, market trends, demands, supply, financial cost patterns, and market forecasts. I will develop partnerships and liaison relationships with suppliers and assisting firms.

3. Three challenges that my company may face in the early period of expansion

A. Language and cultural barriers – Initially, I will have to be adaptive to go-to-market strategy.

B. Local competition – Relationship building with local suppliers and partners is a bit difficult at the initial level.

C. Tax codes and compliance issues – Dealing with taxes and regulatory can create headache at the initial stage

4. Three main categories of market entry strategies

A. Ownership – In this form, the company owns 100% stake and solely responsible for business success or failure

B. Licensing – It is a method in which a foreign firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark for its establishment.

C. Joint Venture – Joint Venture is defined as a type of enterprise in which two or more investors share ownership and control over property rights, operation, risk, financial loss, and benefits.

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