International Business Strategy
International Business Strategy
Introduction
Prior to expanding a business, it is vital to evaluate the different options available at the national and international levels. After such an evaluation, it is easier to ascertain the most suitable roadmap for expansion. At the international level, businesses face different types of challenges. For instance, new cultural values might serve as stumbling blocks for the new business (Jansson, 2008).Additionally, aspects such as foreign laws and trade regulations might undermine the performance of the new business at the international level. Similar challenges are also evident if the business it expanded to the national level. For instance, trade regulations might vary between different states. The national trade regulations might have different barriers that undermine business performance. This paper seeks to outline the criteria that will help in deciding whether to take the business to an international level.
Criteria
Availability of Resources
Setting up an international business requires extensive resources. This is because it represents a large scale form of investment. If sufficient resources are available, it is practical to expand the business internationally. However, the situation is different if the required resources are not readily available. For the home cleaning services, extensive resources are required in terms of equipment and well as facilities. Additionally, these must be supplemented with sufficient human resources in the new branches. Technological infrastructure is also another form of resource utility that is necessary for this business at the international level. Controlling and monitoring the business would be complex without the availability of sufficient technological resources (Cullen, 2009). A wide area network would come in handy while developing the technological framework for the business at the international level. The staff or personnel should also have the relevant skills of handling the technological framework for the business at the international level.
International Trade Regulations
The establishment of the Home Cleaning Services business at the international level must conform to the various stipulations of international trade. In the host countries, operations would not be possible without securing the local licenses for business. Revenue and tax regulations are also essential components of international trade (Keillor, 2011).Some countries have favorable tax plans for international investors. Destinations like China are relatively hostile to foreign investments. This is a pertinent criterion for international business because it affects profitability. If the business can secure licensing in a foreign country, this would form an excellent basis for international business (Mathur, 2011).
Cultural Considerations
Cultural perspectives are extremely pertinent when it comes to international market ventures. The new business would not attain the goals if it does not conform to the various cultural considerations in an international destination. For instance, it is vital to understand the different social values in specific international destinations. Religion is another significant aspect of cultural consideration at the international level. Some business tactics or approaches might not conform to the religious values at the international market (Keillor, 2011). This can easily compromise the efficiency of the business in such destinations. Some cultures have strong value for ethics. In such cultures, the business must establish adequate strategies for maintain ethical standards in all its operations. These aspects justify culture as a critical criterion for deciding whether to venture into the international market (Cullen, 2009).
Advantages of Seeking an International Market
There are numerous merits of taking the business to an international market. This type of venture will expose the business to an extensive market. The global population is barely comparable to the national demographics. This will thus provide the business with a bigger target audience for its services. For any business, a larger target audience provides excellent avenues for enhancing revenue generation. Apart from a bigger target audience, an international market will form an excellent platform for diversifying the current range of services. This is because a larger population has a greater variety of demands (Mathur, 2011).Spread of risk serves as another beneficial implication of taking the business to an international level. Different countries have different economic strengths as well as weaknesses. The business will thus have the chance to leverage on these attributes in order to boost its performance. This is different compared to a scenario in which the business expands to the national level. The national economy might go bust as a result of inflation or fluctuation in currency exchange rates. These are risky economic aspects for the business at the national level. However, such risks are minimal at the international level. By venturing into the international level, the business will also have numerous opportunities for cheaper supplies (Jansson, 2008).This is a significant aspect for enhancing the firm’s productivity. An international approach will also provide the business with an effective platform for future expansion. The options or alternatives for future expansion are minimal at the national levels (Mathur, 2011).
Shortcomings of International Business Venture
The challenge of dealing with international trade regulations is major drawback for taking the business to an international market. Different countries have different types of regulations for foreign investments. Dealing with these regulations can undermine the capacity of the business to maintain profitability. The resources required for international business ventures are extensive. These resources might not be readily available. This is a factor that serves as a shortcoming of taking the business to an international market. Competition is another crucial aspect of consideration (Cullen, 2009).At the international level, there are numerous corporate entities that are well-established in this industry. These entities have exemplary marketing tactics as well as extensive resources. Additionally, such entities have globally-recognized brands. This forms the basis of rigid competition in international markets. Attaining a substantial market share might thus be a challenge for the business at the international level. Cultural barriers are also significant stumbling blocks for the business in international markets. The American style of doing business varies from other countries. This might undermine the capacity of the business to become successful in international markets (Jansson, 2008).
Conclusion
The business will follow the international route. Through the analysis, it is evident that the business will have more benefits at the international level. Although there are several shortcomings, the business will cope with the challenges through strategic planning. The plans will devise applicable mechanisms to counter the challenges such as cultural differences and trade regulations.The international market provides the business with excellent avenues for expansion. This is an essential aspect of business growth. The international market will also expose the business to a diverse target audience for the different services. This is a pertinent perspective with regard to the enhancement of revenues. The national market has numerous barriers such as state regulations as well as federal policies. The international market will also help the business attain its vision and corporate goals.
References
Cullen, J. B. (2009). International business: Strategy and the multinational enterprise, New York, NY: Taylor & Francis
Jansson, H. (2008). International business strategy in emerging markets, Cheltenham,Edward Elgar Publishing
Keillor, B. D. & Kannan, V. R. (2011). International business in the 21st Century, SantaBarbara, CA: ABC-CLIO
Mathur, U. C. (2011). Global business strategies: Text and cases, New Delhi: International Publishing House
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