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International business - a phrase which often businesses refer to in their decision making processes but one they do not fully understand. There is often commotion in the management when they see a drop in a market trend or their own direct sales. The solution to such problems is to expand into new markets - meaning abroad. Basically as the recession hit, businesses based in certain geographical locations often have a desire to have a customer base where the economy is less turbulent or even thriving in their specific sector. Companies based everywhere in the world have always looked elsewhere to do business. Jaguar motors, for example was acquired by Tata , a company based in India who wanted to extend to their current portfolio. As the Indian market has been increasing rapidly over the last few years so to has their desire to venture into markets which maybe profitable for them. Organisations in UK and USA have always looked to move into sectors to save cost, to save money companies based in the west used call centres in India. Why? Because the labour was cheaper and it is perceived that they speak the same language. However before entering into these markets one has to understand certain problems. There are barriers to enter a market and normally companies who want to go into a foreign market analyse these markets and then enter in a commitment. Some of the barriers which companies should consider as a standard should be: - Language Barrier : the first is the problem there is in getting the language issue resolved. - Marketing Barriers: Various countries react differently to different marketing tactics. Some locations are diverse whilst others do not fully grasp all that a business has to offer. For example the Men in Black 3 movie had a scene which was remade in order to stop any conflict addressed towards the Chinese market. In movies to adjust was possible but this may not always be the case. - Legal Barrier: an obvious barrier is to scrutinise the legalities of moving into a new demographic area such as local labour laws. - Human resources and materials: Being in a different country may have its own set of problems. First being if there is a viable business operation then are they enough people who exist to actually perform their jobs and if they do exist then are the raw materials there (and if not the cost of importing them into the country). - Government Reception: Often countries have a special trade agreement to entice companies from abroad to come and invest money into their countries which result in higher employment rates. At times where there is a competitor they may force the hand of the government to adjust its trade policies. Bearing all these barriers in mind there is often market research that a company should do to ensure they do not waste resources or any amount of finances. A simple way to do this is via the Internet, to analyse a market a company does not physically have to in the country, they can analyse the response they are likely to get by evaluating the way visitors respond to their website. For example McDonalds had a free coupon offer translated in Arabic and sent to their Arabic site before a branch was opened. the users had to enter where they would like to redeem the voucher from (i.e. market research as to where a venue should open). It is imperative that the website is designed aesthetically to the cultural taste of the country rather than the generic look. The marketing team also have to ensure that a professional translation expert is used (or an agency where the budgets cater for this). The reason for this is that often text translated using the online free tools do not understand the language nuances. Most of the multinational companies which are in the western world have an interest in external countries. The need is definitely there to ensure that all their texts are translated correctly in language


which understands that the local linguistic differences. As an underlining rule linguistics should have grasp of not only the destination language but also the source language. For example, a company wishing to translate English to French should have a linguistic expert who not only understands French but also understand English.


Barriers to International Business