Answer to Question #227253 in Management for Imms

Question

Discuss the business factors your company would research before venturing into the global markets? Each factor should be supported by an example. 

Answer 1

The business decision is driven by numerous nuances. Consider these four factors when considering whether international growth is right for you:

 Social and Cultural Factors

The intercultural communication can determine whether the business is successful or not. If the product or service does not add value or satisfy local market requirements. Knowing how to conduct business among the "local" markets is extremely important.

Barriers to legislation and regulation

It is possible to operate on foreign markets if the company is flexible enough to function in accordance with local legislation and regulations. When reviewing legal and regulatory commitments, it is highly advised that you seek experienced legal counsel for overseas business practices to identify hazards that may cause barriers for your business.

Economic Factors

For all companies not all countries will be attractive. Some companies could find that some markets cannot afford the products they are selling and should refrain from selling, while some markets might easily accept a slightly different version of their current product. Companies should be aware that in developed and developing countries terms such as the 'middle class' have a different meaning.

Company's capability

The company should have foreign market experience. It would be naive to start operations in an external market, leading by stars in the home market. The knowledge of the home market in foreign markets is largely not applicable and local managers should make strategic and operational mistakes.