Monday, November 10, 2014

Internationalization drivers and Global Markets

By Raul Bernardino

Abstract:
Nowadays organization and companies will be different in next 5 to 10 years’ time. The world moves rapidly. The world leaders often met and put their intervention in order to have a clear direction of the global market. Moreover, technology innovation helps to spread out today’s world decision and information to a very remote location in matter of second. Therefore, innovation becomes a biggest part business strategy components and planning whereas to be an updated organizations.

Furthermore, organization faces a time compression which means an organization is no longer similar to last 20-30 years operations. In other hands, the employees are also facing a past education very soon and therefore organization needs strategizing the available resource within an updated knowledge and also uses of the innovation technology for delivering a product and service within high quality standard and in time.

We are living in instant information and 24 hours news cycles. A 30 second story on the evening news, Capitol Hill new legislation, new UN approach, a competitors or business partner could shifting and playing in the field on any business landscape. There are too many complexity and complicate things around internationalization and globalization.

In initial stage of the technology centered company is challenged with the complexity of the foreign markets and global competition from their earliest stage of development. It is not only to be a technology entrepreneurs who keeps certain technology based offer products, but they must simultaneously stay abreast of the competitors and industry trends in the multiple countries.

The findings suggest that resources necessary to pursue international sales have an important impact on both foreign market intensity and diversity. Additionally, company age was positively associated with the global diversity but not international intensity. Therefore, business today should not necessary to have it owns resources; the important how to deploy the available resources in the timely manner.  These findings support the notion of small technology companies become ‘instant internationals’ but suggest that is proceeding to the next step of achieving the global diversity will require a greater time and resources.

Introduction:
With the presence of the technology innovation and the existing of the internet, the globalization such as global financials flows, transportations and market competition become bases of adjusting and adapting the needs within the new products and services delivers. This includes doing a strategic for new market environment. Additionally, the global market becomes booming in all parts of the globe whereas it utilizes the means of the communication by accessing the transportations (private and public) and multi financial resource. 

Some factors need to consider in the global market competition:
  1. ‘Global competition in the home market’: There are a lot of new products arrives and supplies in the home market and probably we will lose our own customers very soon; because our competitors may offer good quality of the products and services than we did. The competitor prices may also lower than our product price. The global competitions at home markets are also speeding up a new innovation and added value to the customers, it includes developing and improving the current products and services with the high quality of standard. 
  2. ‘Stagnant or shrinking home market’: The global communication also helps stagnant the home market. E.g. a new product which not launch yet however the promotion of product has adverted and this will allow customer to wait that new product instead going to buy an existing product with old fashion. 
  3. ‘Foreign markets with more opportunity’: the globalization gives an opportunity to expand the market in the foreign countries, however the businessmen have to understand several issues such as ‘International Trading System, foreign country economic environment, foreign country political and legal system, foreign country culture and it is environments’, Armstrong and Kotler (2010:580-585). The international trading system may have a restriction from one country or nation to the other countries. For example, to protect their domestic products and its company, the government of the country may put high tariff or taxes to the imported goods which gain additional revenue to the country.  The economic environment, the businessmen have to analyse ‘foreign country industrial structure and income distribution’, Armstrong and Kotler (2010:582). The industrial structures are consisting of economic subsistence, export raw material economics, and industrialization economics. They are also look at income distribution for low individual incomes, medium, and high household. The foreign country political and legal system. The political stability, bureaucracy, and legal system are the major factors and metrics point for the new market entry into the country. The businessmen have also need to know the new target country’s culture and norms before trying to expand their products and services marketing. Each country has different norms and beliefs. For example, we cannot sell fast food with pork meat in the Islamic countries and etc.
  4. ‘Expansion of customers to international markets’: Build a good relationship with new customers and with the existing customers can be seeing as the point to expand new product and service, it includes introducing new product from foreign countries.
In general a globalization is an integration of the societies, economies, cultures of the globe over of process of technology innovation, politic and trade.
The advantages of globalization:
  1. Free trade is which a country does not pay a levy taxes on import or export goods or services.
  2. Globalization allows company tries to find new market and earn more customers. Subsequently, companies are competing each other by provide goods a service with high quality because customers have more choice in new market.
  3. Globalization brings up employment rate because new market need both skilled and un-skill labor. The globalization increases living standard.

The disadvantage of globalization:
  1.  Although, the globalization increases employment's rate in new market, meanwhile unemployment's rate increase in developed countries. Industries are moving from developed nation to less develop countries. It’s because in less develop countries have low labor cost.
  2. People immigrate in to other countries and bring their own cultures to the destination and forget local culture.
International standards and best practices become and standard for ever organizations such as health and safety environment policies and procedures, quality management, ISOs, etc. In the organization where I work, we use OPEC prices as a standard for determine oil and gas prices; ISO 27001 for information security management system, etc.

This international standards drives the organization to lift up their standards whereas to compete with other organization and to be an excellence and up to dated organizations. This also bring local company become international deliver service globally.

In case of Siemens company that’s operates across 190 nations all decision must in the best of Siemens interest. Moreover, the design keeps concentering in manufacturing and economics scale through specialization. Those product can ship to anywhere within the group. The weakness part is currency changes fluctuation that can affect to the price in the market.

There are many globalization challenges to the Seimens. For instance customer can buy raw material from any supplier but not have a technical expertise, therefore Seimens comes with product and services at once. This is a deliberate strategy for Siemens. Seimens in the UK share the customer culture and it group focuses on think customers.

As we know that in the global market there are lots of competitors therefore Seimens established global center of excellence that can serves the special request for entire group.
  
Conclusion:
According to Professor Gary Hamel, London Business School on ‘Creating the Future’ presentation to the senior executive course at Stanford University (December, 1997) stated that:  “Ninety per cent of what you need to learn, you will learn from outside your own business sector.” Therefore, we do need a coping from other organizations and adapt them into our own business environments.  Especially the changes are more quickly than ever (time compressing era).

Therefore internationalization becomes vehicle for the globalization.

Reference List
·         Armstrong, G. and Kotler, P. (2010) Principles of marketing,13th edition, Global edtition: Prentice Hall
·         Miles, G.,Preeece,S.B., Beatz, M.C. (1998), Explaining the international intensity and global diversity of early-stage technology-based firms [on-line]. Available from:  http://www.sciencedirect.com/science/article/pii/S0883902697001055 (Accessed: 22 October 2014)
·         Stiglitz, The globalization [on-line]. Available from:  https://www.youtube.com/watch?v=sV7bRLtDr3E (Accessed: 8 November 2014)

·         Meeting Global and Local Needs [on-line]. Available from:  http://businesscasestudies.co.uk/siemens/meeting-global-and-local-needs/introduction.html#axzz32685SAnm (Accessed: 8 November 2014)

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