country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Firms Internationalizes And Explore New Geographies

tag 0 Download8 Pages 1,937 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Discuss about the Firms Internationalizes and Explore New Geographies.
 
 

Answer:

Introduction

This is the age of competition and customer is the king. With digital marketing and advent of e-commerce, companies are reaching to their customers across globe in no time. When consumers are going global and buying from foreign companies, it also made the firms think that why should they focus on local consumers only and why can’t they expand their customer base. All the organizations have ambitious targets continuously and often explores the unchartered territories to fulfill the targets because the growth becomes constant after few years .Also, dependency, be it on anything, is a risk and companies wants to diversify in terms of consumers, suppliers, talent and so on to mitigate their risk which is one of the reason that has given birth to Globalization (Cavusgil, Knight, Riesenberger, Rammal, & Rose, 2014). This paper will discuss about the factors that motivated the organization to expand beyond national boundaries. It starts with analyzing the most basic factors and then go on towards more complex and underlying reasons.

Curbing local competitors by taking First mover advantage

Introduction of a product in a market where there are no competitors as of now refers to the first mover advantage. Since first mover organizations provides one of its kind products and services to the people, it quickly gains traction from the people and gains the complete market share because there is no competitors. Marketing cost is also less in such countries where no competition exists. Being an early mover will help the organization even when competitor’s starts entering into the market as consumers will find it difficult to switch between products and also the people will think the first company is the most original and authentic and newer companies are just imitating the model to take advantage of greater market share. Not only this, being a first mover and quickly capture the market will also demotivate the local entrepreneurs to venture into the same field because Global companies are generally cash rich and it is difficult to compete with them unless your offerings are really innovative and provides more value (Sasi, Sperling, & Arenius, 2015). Take example of IKEA, IKEA has entered into so many countries and by taking advantage of economies of scale, its super-efficient supply chain, streamlined business processes, it is providing low cost furniture to the people. Local competitors will find it difficult to make furniture at that cost. And thus IKEA remained the leader and curb the local competition.

Not only this, There are companies like Airbnb present in US and similar model was copied in Europe by Wimdu before Airbnb enters into European markets. If Airbnb has entered into the European markets in the beginning, it could be possible that Wimdu would have never happened (Cavusgil, & Knight, 2015).

Risk diversification

This is the age of the globalization and collaboration. When companies are seeing that foreign firms are entering into their home markets and threating their existing market share, they are simply questioning status quo an analyzing their prospects of going to foreign countries in search of new markets and customers and reduce their risk by depending on a single market. For instance, there are many economies which are going through the different phases like economic slump, growth, saturated and thus it is a huge risk for an organization to depend on a particular economy (Kim, Mahoney, & Tan, 2015). Diversification is the most effective technique for mitigating risk and firms choose to go to international market for diversifying their customer base and mitigating their risk of depending on a limited market. For example, there are numerous US and UK companies that are facing pressures due to slowdown in growth and thus exploring Asian markets which are in developing stage and has tremendous potential for growth. For example, Hamleys which is a UK based toy retailer chain when sees slowdown in existing markets began to expand to India because incomes are rising in India and with better job opportunities, there is a huge demand prospects for Hamelys product in India (Sunny, & Sund, 2014). Operating in multiple markets also helps the organization to better respond to the slowdown in some particular markets because growth markets can offset the slow growth and help the organization to sustain itself in the economies which are facing slowdown or recession.

Thus, diversified markets for selling your products is one aspect of risk diversification. Other aspect is having multiple suppliers at different Geographies to mitigate the risk of supply chain disruption. In past, there are several incidences of how the single supplier dependence wreck a havoc for some of the manufacturing companies because their suppliers faced some natural disasters, legal issues and capacity issues and unable to provide the material. Thus, it is always a good practice to have suppliers at multiple locations so that natural disaster at 1 place cannot effect the whole supply chain. Having more suppliers will also increase the bargaining power of the manufacturing company over the suppliers and this is a reason why the firms looking to go global (Hadjikhani, Hadjikhani, & thilenius, 2013).

 

Saturation of domestic market/potential of newer markets and competitive pressures

In this age of aggressive targets and massive competition, companies always have a target for growth and when the local markets becomes mature, companies have no other option but to explore the unchartered territories to sustain and achieve the targets. In a local market, company can grow for few years but over a period of time, its growth will become constant and company has to look beyond national boundaries. Also, if the newer countries have huge potential for the products, then it is definitely a good opportunity for the company. Companies can also think of going global as first mover or after their local competitors who have already moved to international market. Both the approaches have their own pros and cons (Bianchi, 2014). For instance, first mover advantage will help to penetrate deep into the market and acquire maximum markets but it also carry a risk that if product is not successful, there will be a huge loss. On the other hand, if you move after your competitors, then in such cases, risk will be very less as organization can quickly judge how the consumers are responding to products of their competitors and what is the growth potential. Not only this, first movers often faces huge cost structures initially in order to understand the market, add some localizations before they gain the trust of the customers. Not being a first mover will help the company to enter into the markets without making investments to test the waters as this had already been done by the competitors.

Also, sometimes competitors who have already entered into the foreign markets and tasted success in such markets will also bring back the additional earnings and profits back into their country and increase their marketing, campaigning budget and become more aggressive. During such times, reinventing itself , Mergers and Acquisitions or copying competitors by going global are the only few options for the organizations and companies often look for expanding into foreign markets.

Consider another similar dimension where some foreign company enters into new country and pose threat to local players. In such cases, local players also explore the home market of the foreign players so that the foreign company can divert its attention in terms of money and effort in its domestic market and not just fully focuses on foreign market. Thus, this is also another important reason why the companies are looking to expand into foreign geographies (Boehe, 2016). 

Geographic/Strategic advantage

Geographical advantage is one of the most important reason of moving to global markets. Some countries especially Developed ones generally have higher cost structures, more strict and regulated labor laws which makes the cost of production quite high in such countries. With increased competition, there is hit on margins and thus organizations pursuit the path of cost cutting to sustain them and moving to foreign and cheap locations is a byproduct of cost cutting. For instance, there are numerous companies like Apple, Dell, Ford, Hitachi that have moved their manufacturing units to China and India so as to take advantage of cheap labor in these countries (Buckley, Munjal, Enderwick, & Forsans, 2016). Apart from cheap labor, access to new pool of talent is another reason. For instance, Google, Microsoft and Amazon has moved their development centers partially to India so as to take advantage of huge talent. India is known to have expertise in software development and technology and thus big organizations are moving to newer markets so as to leverage talent in such countries to boost their own capabilities and providing more value to their customers. Some organizations tends to shift their location near their suppliers so as to involve supplier in design discussions as well as to reduce the lead time of the products and reduce inventory. Thus, organizations also explore to newer markets near their supplier base.

Also, There have been many cases in the past where the organization is dependent upon a single supplier for their supply and if some calamity happens or supplier unable to supply the material, this can be a disastrous for the company. Thus, organizations tend to globalize themselves to search for the local suppliers also. Also, some organizations force their suppliers to shift to their country. Even some firms have mandate that they will purchase only from those suppliers which are present in their country and which forces supplies to globalize their operations. This way suppliers are forced to develop the competencies globally so as to serve the global manufacturing location of its customers.

Also, take another example, a multinational company will look for awarding the contract for its marketing activities to an advertising agency that have global presence so that company approach looks uniform and focused irrespective of the market and focus is not lost.

Conclusion

This case study discussed about why globalization has become indispensable for the organizations. This age of competition has forced the customer to tap unchartered territories and explore newer markets to sustain their growth. Along with it, there are some few most common reasons which sows the seeds of globalizations in the management of the company and same have been discussed in this paper.

 

References

Bianchi, C. (2014). Internationalisation of emerging market firms: an exploratory study of Chilean companies. International Journal of Emerging Markets, 9(1), 54-78.

Boehe, D. M. (2016). The internationalization of service firms from emerging economies: An internalization perspective. Long Range Planning, 49(5), 559-569.

Buckley, P. J., Munjal, S., Enderwick, P., & Forsans, N. (2016). Do foreign resources assist or impede internationalisation? Evidence from internationalisation of Indian multinational enterprises. International Business Review, 25(1), 130-140.

Cavusgil, S. T., & Knight, G. (2015). The born global firm: An entrepreneurial and capabilities perspective on early and rapid internationalization. Journal of International Business Studies, 46(1), 3-16.

Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.

Hadjikhani, A., Hadjikhani, A. I., & Thilenius, P. (2013). Internationalisation process in turbulent and stable markets: Do firms know that they do not know?. Journal for Global Business Advancement, 6(3), 182-201.

Kim, M., Mahoney, J. T., & Tan, D. (2015). Re-conceptualising exploitative and explorative FDI: a balancing-process approach to firm internationalisation. European Journal of International Management, 9(5), 537-565.

Sasi, V., Sperling, G., & Arenius, P. (2015, January). RAPID INTERNATIONALIZATION of BORN GLOBAL FIRMS-do LOCAL NETWORKS have an IMPACT. In ICSB World Conference Proceedings (p. 1). International Council for Small business (ICSB).

Sunny, K. P., & Sund, R. (2014). Productivity & Competitiveness of Indian Toy Industry: Prospects & Challenges. Productivity, 55(1), 120.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). Firms Internationalizes And Explore New Geographies. Retrieved from https://myassignmenthelp.com/free-samples/firms-internationalizes-and-explore-new-geographies.

"Firms Internationalizes And Explore New Geographies." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/firms-internationalizes-and-explore-new-geographies.

My Assignment Help (2018) Firms Internationalizes And Explore New Geographies [Online]. Available from: https://myassignmenthelp.com/free-samples/firms-internationalizes-and-explore-new-geographies
[Accessed 05 April 2020].

My Assignment Help. 'Firms Internationalizes And Explore New Geographies' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/firms-internationalizes-and-explore-new-geographies> accessed 05 April 2020.

My Assignment Help. Firms Internationalizes And Explore New Geographies [Internet]. My Assignment Help. 2018 [cited 05 April 2020]. Available from: https://myassignmenthelp.com/free-samples/firms-internationalizes-and-explore-new-geographies.


For years, MyAssignmenthelp.com has been operating as one of the cheap assignment help providers in the USA. We are one of the best college paper writing services that keep service price minimal. We do not let the affordability of our service to hamper the standard of our work. We have separate teams of experts to provide report writing help . At MyAssigenmnthelp.com, we believe in earning credibility, so students can pay for assignments only after getting satisfied solutions. Tough assignments bother you? Trust us with your project. You will not regret paying us to write assignments for you.

Latest Samples

ACC307 Accounting Theory

Download : 0 | Pages : 9
  • Course Code: ACC307
  • University: Elite Education
  • Country: Australia

Answer: Introduction A conceptual framework forms the structure of ideas and objectives that helps to create accounting rules and standards. The norms and standards that are placed in the conceptual framework describes the distinctiveness, the functions and boundaries of financial accounting and statements. This framework is also used as a basis for solving disputes in accounting.          The Statemen...

Read More arrow

BSBMKG608 Marketing For Financial Management Technique And Ratio Analysis

Download : 0 | Pages : 18
  • Course Code: BSBMKG608
  • University: Australis Institute Of Technology And Education
  • Country: Australia

Answer: Introduction This report is designed with the aim of generating secondary knowledge about different terminologies and concepts related to marketing management. A&A Coffee is the case organization that is selected in this report for ensuring practical relevance of the findings of this report. Assessment Activity 1 Question 1 Financial Management Technique Description Example Ratio Analysis Ratio a...

Read More arrow

BSBMKG608 Marketing For Financial Management Technique And Ratio Analysis

Download : 0 | Pages : 18
  • Course Code: BSBMKG608
  • University: Australis Institute Of Technology And Education
  • Country: Australia

Answer: Introduction This report is designed with the aim of generating secondary knowledge about different terminologies and concepts related to marketing management. A&A Coffee is the case organization that is selected in this report for ensuring practical relevance of the findings of this report. Assessment Activity 1 Question 1 Financial Management Technique Description Example Ratio Analysis Ratio a...

Read More arrow

LB5232 Marketing And Customer Engagement 2

Download : 0 | Pages : 15

Answer: Introduction  Overview of the Company: Syndicate is one of the recognizable medium enterprises among the scooter stores established in the market of Australia. This particular company has gained immense reputation in Australian market by impressing the scooter lovers (syndicatestore.com.au, 2018). Free style scooter culture is the primary USP of the company. After gaining image and reputation as a scooter shop, the bus...

Read More arrow Tags: Australia Brisbane Management James Cook University 

CRI10001-Criminology Theory And Practice

Download : 0 | Pages : 4

Answer: Synopsis The police were investigating a suspected murder of a woman in North Melbourne. The police were examining whether the woman was followed off a tram from the city and later attacked. The married woman, who had already been formally identified by the police was found by a passer-by early morning near Polaris shopping centre car park, just a short distance from the tram stop. Homicide detectives were treating the cases as suspic...

Read More arrow
Next
watch

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,244,026

Orders

4.9/5

Overall Rating

5,067

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

203 Order Completed

97% Response Time

Richard Alpert

PhD in Psychology

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1592 Order Completed

96% Response Time

Jane Sima

Ph.D in Psychology with Specialization in Industrial-Organizational Psychology

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

134 Order Completed

95% Response Time

Thomas Nelson

MS in Information Systems Technology with Specialization in Database Administration

New Jersey, United States

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 4/5

1309 Order Completed

100% Response Time

Gemmie Chen

MSc in Nursing

Singapore, Singapore

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Excellent head start for a larger paper that I need to do. Thank you very much for your assistance.

flag

User Id: 378357 - 04 Apr 2020

Australia

student rating student rating student rating student rating student rating

The writeup was good. i would definitely use this my assignment and recommend it to my friends

flag

User Id: 312602 - 04 Apr 2020

Australia

student rating student rating student rating student rating student rating

very good, help me get a great grade, very quick response and detailed answers! I would highly recommended to another student

flag

User Id: 379221 - 04 Apr 2020

Australia

student rating student rating student rating student rating student rating

Absolutely awesome !!! You guys are great !!! I will be using your services for the rest of my semester and will recommend to my friends!!

flag

User Id: 397789 - 04 Apr 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?