Promoting a Business in the Global Market

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Table of Contents

Introduction
Strategy for Going Global
International Strategy and Organisation
International Opportunities that Affect Businesses
Selection and Managing Entry Modes Affecting the Business
Managing International Operations
Hiring and Managing Employees
Cross-Cultural Issues
Politics, Law and Business Ethics
Economics and Emerging Markets
International Trade
Business-Government Trade Relations
Foreign Direct Investment
Conclusion

Introduction

Engrave Investments is a window tinting company located in the Arab region and Gulf Cooperation Council (GCC) and has been in existence for more than 40 years. This company has expanded its operations from the initial two branches that were located in the United Arab Emirates but later moved to Saudi Arabia. It has targeted regions like Asia, Africa, North America, South East Asia and North America.

The mission of this company is to ensure that everybody is able to get window tinting services to ensure the safety of their vehicles and health are guaranteed irrespective of their economic state. This means that this company offers cheap services that ware available to all motorists.

This was motivated by the need to ensure that motorists do not continue suffering the harmful effects of excess light in their vehicles; therefore, window tinting has become a good solution to managing this problem.

The company has employed more than 1500 workers in its ten branches located in various regions within the Gulf region. Each branch operates as a separate company but there is a general manager and president who are in charge of coordinating all activities of these branches. Annual reports are presented to them during annual meetings that are conducted at the end of every financial year.

Strategy for Going Global

This company has identified the enormous task that lies ahead of this company in investing in international business activities. Even though, there are opportunities in almost all nations it is necessary to explain that this company identified specific targets that seem to have numerous advantages over others. The following are some of the regions this company has earmarked to start exploring market opportunities.

The first region targeted by this company is Asia since it is located very close to this company and thus it has limited financial expenses in terms of commuting from it to the company. This region has opened its international investment window to all investors from various regions of the world and thus it is very attractive.

There are many car manufacturing industries in this region and this will enable this company to have trading partners that will help it in developing its ideas. It is necessary to explain that an international company can easily penetrate into a market if it partners with a similar company in the foreign country.

Europe, South and North Americans are very careful about the safety of their vehicles and themselves and this offers window tinting a ready market in these regions. In addition, most African countries are importers of personal vehicles that require tinting to protect the owners from being seen by people in the public.

Most celebrities in America, Africa and Asia like driving in vehicles that have tinted windows to avoid interruptions from the public.

International Strategy and Organisation

The performance of this company on the local scene has enabled this company to start thinking of going global and adopting an international perspective. There are various strategies this company has adopted to ensure that it successfully engages in international trade. The following are some of the ways this company has prepared to manage this issue and continue operating the local companies.

First, an international investment is a huge undertaking that requires adequate preparation in terms of logistics and finance. The company has ensured that it has enough funds to finance its operations to ensure it stands high chances of competing effectively with other similar companies. The first approach it has taken is to ensure it has enough capital generated though its profits, floating shares and loans from financial institutions.

The company has been in operation for more than 40 years and within this time it has registered profits even though sometimes the profits reduced. The financial report for the last 15 years show a steady increase in profits and this necessitated the need to invest in international markets. Secondly, the company floated more than 900 million shares each valued at $ 1 to ensure it generates additional capital for this activity.

This ensures that it has managed to raise enough capital to undertake this activity that requires a lot of money. In addition, the good financial records of this company have won the trust of many local banks and encouraged them to be quick to offer it loans.

Lastly, this company has trained workers to ensure it has enough staff to manage its international branches that will be located in various regions in the world; however, the supportive staff will be recruited from the local population.

International Opportunities that Affect Businesses

This company has realised that it will not have a smooth entry in the international community due to the following reasons that cannot be avoided. Therefore, it must adopt ways of managing these issues since they affect all companies that have international investments. First, competition is a key component of all business investments whether they are located in international or local markets.

All businesses have competitors that exert pressure in the market and lead to struggles to dominate the limited demand available. However, this company will manage its pricing and quality to ensure it manages to stand good positions in competing with other companies. The second important issue of is taxation that cannot be avoided no matter how hard a company tries.

This company has noted that investing in America will attract a high tax but this will be compensated buy the huge profits that will be generated by the foreign market. On the other hand, African and Asian countries have very low taxation on international companies but this reflects the limited market available in these regions.

Thirdly, this will be a global company and it must respects and observes all international regulations that govern this trade. This means that even though some regulations may not favour this company it must respect them since these laws were established to protect the local and intentional stakeholders.

Therefore, these laws, treaties and institutions that govern international market will play significant roles in determining the activities of this company. Lastly, exchange rates and the world economy will also play significant roles in determining the profits generated by this company.

Countries that gave high exchange rates will be more profitable than those with low rates since this means that the former has many investment opportunities.

Selection and Managing Entry Modes Affecting the Business

Even though, there are very many ways of marketing the products of this company in the international market some of them may not be effective. Therefore, this company is considering the following ways of establishing its market in these foreign territories. Direct exports will involve the use of sales representatives and importing distributors to enter these markets and evaluate their performance within the first two years.

These representatives will be given commission based on their sales while the distributors will be allowed to buy the products and get all the rights and control over them while in their regions. Secondly, it is also evaluating the use of export trading companies to help it establish its grounds in international markets.

These companies assist new entrants in international business until when they have established their base in the foreign territories. These also include export managing companies that manage all transactions and activities of an exporting company on its behalf and assume all the rights and responsibilities of that company.

Export merchants and confirming houses are also good options that can be explored especially in South America to enable this company to study the market while introducing its products without necessarily incurring the heavy expenses involved in setting up its branches in this region.

Licensing is also an option that will enable this company to venture into international market by allowing other companies to register its licensing agreement in the foreign land and continue with its business for a fixed period.

It is also considering franchising with other related companies to give them its rights of distributing its products under its name. The last option that seems to be appropriate in partnership with companies that sell products related with window tints and they include car manufacturing and distributing firms.

Managing International Operations

This business has identified the importance of international treaties and unions that govern international trade. It has ensured that it has consulted the relevant trade organisations to get permission to conduct its activities. In addition, it has sought permit from the local exporting agency to ensure it conforms to the policies that govern international trade.

It is necessary to ensure that all the regulation governing this activity are followed by asking the relevant authorities to inspect the premises, read the objectives and polices of this company to prove that it will participate in legal businesses. Inflation has always been a serious challenge to international investors since it determines their activities through the prices of its commodities.

It is necessary to explain that sometimes a company cannot manage this issue since it is beyond its abilities. However, this company has prepared to manage all challenges associated with inflation by insuring the activities of this company with relevant insurance companies that provide this cover.

This will protect this company from collapsing if the world experiences inflation as was evident in 2008 where many uninsured companies were forced to end their operations. In addition, terrorism has always threatened the activities of all international and domestic companies and this has made many investors to fear participating in this business.

However, this company has ensured that it will invest in regions where there are no terrorist attacks. Even though, it is impossible to predict terrorist activities this company has identified areas that have maximum security to ensure there are no chances of falling victims to terrorism. This company has partnered with other similar companies and inquired on their safety precautions to enable it to protect its international investments.

Hiring and Managing Employees

An international company must respect the policies of other nations and ensure that it follows their guidelines. Staffing has always been an issue of conflicts between international companies and local authorities. However, this company has ensured that it has managed this issue in an amicable way that will promote healthy relations with the local authority.

Even though, this is an international company it must ensure that considers the local population in terms of employing them in various sections. However, this company had reserved the managerial positions for its members from the country of origin.

It has noted that the present managers have performed very well in the last seven years and must be rewarded by being given the same positions in all branches that will be opened in other nations. This means that all international operations will be managed by the existing managers.

However, it has been noted that this company will also consider hiring local employees in sections that will not involve a lot of managerial tasks. It has noted that it will require workers to market distribute and advertise its products in local markets which will be done by the locals. This will reduce the costs involved in transporting workers from its parent country to other new regions and also inconvenience related to this exercise.

In addition, this will follow the international standards that require international companies to allocate not less than 40 % to the local population. Therefore, the company has reserved all junior positions for the local population.

However, it has also noted that there will be the need to promote local employees who show commitment to work and good performance since this will be a good way of ensuring this company is perceived to be a local investment.

Cross-Cultural Issues

Culture is a very important issue in international al and local businesses since it affects the abilities of people to purchase goods depending on their beliefs and practices. It is very important to observe and respect the culture of different communities to ensure the business does not affect their operations.

Even though, some cultures may not be perceived to be good a business must not openly ridicule or interfere with the activities of the local population since they are the ones offering market for its products. Therefore, it is important to state that this business has studied most local cultures and will ensure they are respected.

The business has included the local population in its job opportunities to ensure it integrates their culture with some practices of the local population. However, this issue has been managed with a lot of care to ensure the operations of this company are not affected by the local culture.

Studies have shown that all cultures are equal and no culture should be perceived to be superior to others. Therefore, this business will treat with respect all people from different cultures to ensure they feel conformable while working at this company.

It has also ensured that there will be no conflicts among workers from different cultures by highlighting the need for workers to respect one another and work as brothers and sisters to ensure the company achieves its targets. It is necessary to explain that the world has many cultures and each them has unique characteristics. Even though, some features of these cultures may be extreme this company will not participate in any activity that will despise or favour any culture over others.

Politics, Law and Business Ethics

Politics is a process that determines the policies that will govern the activities of a country and thus must be respected. International organisations must not engage in politics or any activity that will show they are members of a political party. The objective of a business is to invest in activities that will generate profits and not those that will determine the political events of a nation.

Therefore, this company has ensured that it has minimised and eliminated all political discussions within its premises by laying out strict rules in the company. These rules will ensure that members of this company shall not engage in political discussions, campaigns or activities that will show their political facilitation. There are strict laws that will govern this behaviour including suspension and dismissal from duty.

It is important to note that this business does not engage in any political activity or support any political party, ideology or candidates. The mission of this company is to provide window tinting services to clients all over the world and not engage in any political activity. The company has recorded good performance in the last 40 years due to the strict laws and regulations that govern the conduct of workers.

This means that this company respects all laws and regulations aimed at promoting productivity and good relations amongst people. Therefore, all workers will be expected to respect the policies of this company and those of the regions the companies are located. Similarly, the company will respect the laws of the land where they are located and ensure it promotes order in various activities.

Business ethics are indispensable regulations that govern the behaviour of workers, employers and all stakeholders. This company has realised the need to uphold high professional ethics to achieve its objectives.

Therefore, all stakeholders will be required to follow all rules that govern their behaviour to ensure there is order and productivity. This will help this company to be productive and compete effectively with other companies.

Economics and Emerging Markets

Businesses are developing good plans that enable them to widen their operations and invest in international markets. The tradition and belief that international businesses were a reserve for huge companies are slowly disappearing as small businesses start to dominate this market. Current financial reports show that more than 25% of international businesses are small scale.

This means that the present economic conditions are favouring both huge and small companies to invest ion global activities. However, it is necessary to understand that before venturing into international business it is important to consider some economic trends that determine the future of most businesses.

First, this company has identified the market for its goods and has noted that America, Asia and Africa will offer good markets for window tinting. These choices have been influenced by an increase in demand for motor vehicles in these regions in different perspectives. America is a developed nation and thus most people are rich and can afford expensive vehicles.

Most of them are healthy conscious and also mind the security of their property. Therefore, they will not hesitate to buy the products of this company and tint their car windows. On the other hand, Asia and Africa are developing nations and have ready markets for second hand vehicles. Therefore, there are high chances that these regions will offer ready market for the services provided by this company.

International Trade

International trade activities should be monitored to ensure this company manages to stand high chances of dominating this market. The difference between international trade and local trade is on the geographical coverage and laws that govern trading activities.

However, this should not be cause of alarm since this accompany has been in existence for more than 40 years and this shows that it is not a new entrant in this business.

The fact that it has managed to compete with other similar companies all the years means that it is a strong company y that can compete with international investments. Therefore, it is very prepared to manage all issues that may affect international trade at the local and international level.

This company has identified trading blocks that it will join to ensure it enjoys the benefits of being a member of these blocks. In addition, it is a mandatory requirement that companies must join these trading blocks to ensure they are not taxed heavily when participating in international trade.

Members can agree on their terms of trade and modes of payment to facilitate easy movement of goods and services across their boundaries. Therefore, it is important that this company has already consulted the relevant international business planners to ensure the expansion of its activities will be a major success.

Even though, international businesses experience various challenges ranging from geographical locations, exchange rates, terrorism, inflation and political instability these issues will not affect this company only but all that participate in this activity.

In fact, these events affect all businesses whether they are domestic or foreign and this means that all stakeholders will play significant roles in eliminating the possibilities of these occurrences. It is important to explain that an international business is exposed to similar risks that local businesses face since this activity takes place in the same environment.

Business-Government Trade Relations

The government plays a significant role in promoting business activities within its boundaries. The regulations adopted by a government determine the business activities members can participate in and this becomes an investment guideline. It is important to explain that business activities derive their legitimacy from the rules and policies established by governments.

There must be good business-government relations to ensure the business participates in its activities freely. On the other hand, a government must ensure it has good relations with a business to maintain law and order. This company has developed strategies to manage its relations with various governments to ensure it enjoys the following benefits.

First, governments can regulate the prices of goods sold within their boundaries through taxation. If a government imposes heavy tax on goods or services produced by a company this burden will be transferred to consumers through pricing. They will be forced to buy the product at a very expensive price due to the heavy duty imposed on the company by the government.

However, if a company has good relations with governments it is likely to negotiate taxation issues and ensure they do not affect its prices very much. Secondly, governments can prohibit the production and sale of some goods and this will lead to reduced demand for the goods. In fact, if a government banns the production of a product this means that the company producing that product will be forced to close its operations.

However, some regulations may limit the use of some products and this will also limit market penetration of such goods. This company provides window tinting services to motorists; however, this business may not generate good profits in nations that do not allow public transport vehicles to have tinted windows.

For instance, most African countries do not allow vehicles belonging to institutions, private companies and international organisations to have tinted windows; therefore, means that this business may not be profitable in this region.

In addition, a company may decide to participate in social corporate responsibility to ensure it wins the trust of local governments. This may allow this company to be exempted from taxation or this may be practiced at a minimal level. Therefore, it has established ways of participating in communal activities to ensure it enables the local community to benefit from its operations.

Foreign Direct Investment

Foreign direct investment refers to a situation where a company engages in the production, distribution and marketing of a product in a foreign country. The difference between this and international trade is that the former involves a firm transferring all or some of its operations from its mother country to another one. Therefore, it operates from another country but maintains its identity as a foreign company.

International trade is a general term that refers to trading activities amongst different countries. When this company starts to participate in international business activities its foreign direct investment will have the following effects on it and the host country.

First, it has aimed to invest its operations in Africa and Asia that constitute a significant percentage of developing countries. This means that this company will stimulate economic growth in these nations by generating income through revenues taxed on its operations.

Secondly, it will boost the development of infrastructure by opening remote regions and contracting roads, communication and water and sewerage network. Thirdly, it will provide employment opportunities for the locals who will be given more than 40% of jobs in this company.

However, this investment may hinder the development of local industries that produce the same product or offer similar services. This means that if this country manages to control the window tinting market in the areas it plans to explore the companies that provide these services in these regions may be forced to close if they fail to compete with this one.

In addition, the company may interfere with the activities of these countries if it manages to control a huge portion of their economies. Lastly, this company may transfer workers and expatriate its profits to its parent company located in another country and this may sabotage the economy of the host nation.

Conclusion

International investments are huge activities that must be approached with a lot of caution. Multinational companies must respect the politics, culture, traditions and institutions of host nations to ensure they have healthy relations with their governments.

They must develop plans to manage challenges of international trade and engage in beneficial activities that will not only generate profits for them but also benefit the local community.

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