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Incorporating International
Business Considerations into Your Thinking & Planning
International Issues to Consider1 |
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How will your idea, good, or service fit
into the international market?
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Should you enter the market through trade
or through investment?
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Should you obtain your supplies
domestically or from abroad?
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What product/service adjustments are
necessary to be responsive to local conditions?
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What threats from global/local
competition should be expected and how can you
counteract these threats?
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Six Features of Emerging Markets6 |
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a high concentration of ownership
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weak recruitment processes and a
shortage of experienced directors
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poor focus
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an inadequate supply of information
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complex cultural traditions
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underdeveloped legal regimes.
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Lessons from
Jack Welch,
the Former Legendary CEO of
GE
Penetrating Foreign
Markets: Main
Principles |
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Move into global markets fast and
powerfully.
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Build a solid, domestic base before
launching the attack.
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Use
acquisitions to create or enlarge a bridgehead.
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Strengthen under-performing businesses by
acquisition and pooling assets.
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Concentrate on major businesses where you
can
win.
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Develop local management, and bring
expatriates home as soon as possible.
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12 Tips for Global
Business Travelers |
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International Business
Defined
International business consists of transactions
and collaborations that are devised and carried out across national borders
to satisfy the
strategic intent and
objectives of companies, organizations, and individuals. Two primary types
of international business are trade and investment. These transactions and
collaborations take on various forms – export-import trade, co-innovation,
consultancy services and sub-contracting, business process outsourcing
(BPO), and direct foreign investment – which are
often interrelated Direct foreign investment "is carried out in varied
forms, including wholly owned subsidiaries and
joint
ventures. Additional types of international business are licensing,
franchising, and management contracts."1
Managing Cross-Cultural
Differences
Cultural
Differences
If you wish to reach foreign buyers or sellers
or need to bring joint venture projects to a successful outcome, you must be
culturally competent.
You must understand intercultural communication and effectiveness if you
wish to avoid such serious problems as:
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Unmet commitments from
suppliers;
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Stalled joint projects, deals coming
undone;
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Frequent miscommunications, failed
meetings, and unanswered
routine communications;
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Low productivity.
Cultures – both national and
organizational
– differ along many dimensions. Four of the most important are:
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Directness
(get to the point versus
imply the messages)
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Hierarchy (follow orders versus
engage in debate)
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Consensus (dissent is accepted versus
unanimity is needed)
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Individualism (individual winners
versus team effectiveness)2...
More
Case in Point
Lessons
from Jack Welch
To
Jack Welch,
the legendary former CEO of
GE, "There will only
be one standard for corporate success: international market share... The
winning corporations
– those who can dictate their destiny – will win by finding markets all over
the world."
3 Strategies of Market Leaders
Under
Welch's leadership, GE's sales rose
by US$60.1 billion within just one year. Over half that increase came from
abroad. Welch developed
strong, direct and simple
principles to increase GE's global sales. He regarded globalization as a
three-stage process.
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Going after markets and expanding the company's horizons.
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Globalizing components and products, and sourcing around the world.
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Globalizing the intellect.
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