HI6006 Competitive Strategy Editing Service
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With the rise in the competition across the globe, organizations are making a huge effort to grow its business across the globe by entering the new market. The expansion of the business across the border creates ample of opportunity for the business to increase its profitability and improve its brand image. With the available business opportunity, the expansion of the businesses are also associated with certain risk which may affect the operation of the business across the local level. The report discusses about the various issues which the management faces while expanding their business across the border. The report contains the five key issues that the manager needs to be emphasized while expanding the business across the border. It also contains the example the companies of Australia which have effectively expanded their business across the border and problem they have faced in managing the business. The issues which were has been identified in the report are language and culture barrier, legal barrier, market barrier, access to human resources and government barrier. The major issue which the organization faces while entering a new market is in relation to the change in language and culture. It creates difficulty for the organization to implement its existing strategy and in conducting the routine operation. The company also faces difficulty in executing its current strategy and procedure due to change in the legal laws. The company also faces huge difficulty in building the brand value in the new market due to change in the preference of the customer. The organization also faces difficulty in the availability of the resources in the new market and has to rely on the sources which are available in the local market. The government also impose a certain restriction which creates the difficulty for the organization to manage its business operation across the border. The report also discusses about the how the culture influences the company which expands their business overseas. The expansion of the business highly depends upon the social behavior of the public where the company is planning to expand its business. The report also states how the technology assists the business to expand their business across the border. The technology plays a key factor for the company to improve the brand value of the company across the border. The use of innovative technology helps the company to reduce the cost of the production and improve the quality of outcome. It assists the business to attract new customer across the border. The report also provides the ways in which the technology assist the organization in managing its business across the border. The report also states that the expansion of the business across the border provide ample of opportunity for the business but is pretty much difficult for the company to expand its business across the border. The report also describes the ways which the organization can handle the issues which arise in managing the business across the border. To overcome the effect of the culture the company can conduct the market research identify the need of the customer in the new market. The organization also needs to use the various motivational technique to acquire quality human resources in the new market. The organization needs to understand the effect of the local laws and regulation before entering a new market.
Due to the globalization organization all over the world has the opportunity to run their operation in more than one country. The organization finds this expansion as attractive and lucrative but managing the operation at the global level is pretty much difficult in comparison to managing at the local level. The global business is affected due to the difference in factor such as social, economic, cultural legal and political environment. The crossing of geographical boundaries gives birth to a multicultural organization where an employee from more than one country is working together. The company requires huge resources to expand their business globally and failure to which also affect the functioning of the business at local level. The organization needs to make a lot of effort to identify those factor which may affect the business and frame the strategy accordingly to avoid future contingency. While expanding the business across the border the organization are prone to risk such as political risk, currency risk, cross- cultural risk etc. The cross- cultural management has is pretty much important and has the great effect on the success of the international business operation. The issues which are discussed in the report are the concept of culture, diversity and their importance in the global organization. It also discusses the issues and challenges of cross-cultural diversity which the organization faces. The report also discusses the strategies which the management can follow to manage its operation across the border. The report discusses about how two Australian company Telstra and Wesfarmers who have effectively expanded their business across the globe. Telstra is presently the largest Australian telecommunication and media company. Its activity includes building and operating telecommunication network and marketing a wide range of communication and entertainment product and service. On the other hand, Wesfarmers is one of the largest retailers in Australia and has effectively expanded its business to another country. The company has many subsidies that collectively provide an extensive range of product and service, from office supplies to insurance (Australia business review, 2014). The report discusss the five key issues which these company has faced while expanding their business across the globe and the strategy which these company has adopted to overcome the issue. Further the report discuss the culture influence which has affected organization operation overseas. The assignment also discusses the ways in which technology has affected organization operation overseas.
Growing your business at the global level is the major challenge and the company faces many issues while accomplishing their goals. To successfully expand their business at the global level the company needs to consider the new set of a factor that was not affecting the business at the local level. While the international market provides ample of opportunity for the company to grow, but expanding beyond the home country is the challenging task.
Language and cultural barrier -The organization faces huge difficulty in implementing its key marketing and operating strategy to the language barrier. According to Binder (2016), the company faces huge difficulty in communicating with the customer to sell its product across the border. The cultural norm also many of the times affects the successful business expansion. The organization needs to make effort to understand the culture practice in the country and check whether they relate to the company product and service. The marketing strategy of the company may face unforeseen difficulty if the company is not able to communicate the benefit of the product due to the language barrier. For example, Telstra and Wesfarmers may face difficulty in implementing their marketing strategy due to the language barrier as the company product and name, slogan and concept may sometimes not be accepted to the target language and culture. People in the different countries place different value and priorities to the different product due to change in product and service. The company faces huge difficulty in identifying customer preference and value in the market as they carry little knowledge about the market.
Legal barriers- The organization while conducting their operation globally needs to consider the rules and regulation which is operating in the country. The certain restriction in the foreign market sometimes affects the functioning of the business. The changing regulation creates the difficulty for the management to implement their marketing and operation strategy. For example, the Telstra and Wesfarmers have faced a huge difficulty as the change in the tax rate has affected the pricing of the product which has the direct effect on the demand for the product. The company to handle the issue needs to understand the meaning of the regulation in the industry, and its implication in your business, and make effort to develop the skill accordingly to handle the issue. The tax law, customs law, import restriction and corporate organization many of times act as the stumbling block in the performance of the organization. Due to the difference in tax liability around the world, the company may face huge difficulty to maintain the same standard all around the world. The technology transfer law and foreign investment law may affect the investment decision of the company.
Market barrier- The Company faces huge difficulty in identifying the preference of the customer in the new market and build its reputation in the new market. The existing of the company product and service may have a huge demand in the domestic market but may not be preferred by the customer in the new market. To avoid the issue the company needs to conduct the market research to identify the need of the customer in the market. The company needs to follow the certain business model which has helped the company in the domestic market and frame the strategy to implement it in the new market. The organization needs to make effort to understand the new culture to handle the complexity in the ne3w market. For example Telstra and Wesfarmers has used a large amount of resources on marketing to identify the need and the failure to which will also affect the functioning of the business at the domestic level. Conner (2013), stated that the company faces huge difficulty in convincing the customer of the new market when there are comparable product available in the domestic market. The major company such as Telstra and Wesfarmers needs to make a huge effort to convince the customer that their brand is trustworthy and better from those of competitor. The company due to certain legal regulation faces difficulty in delivering the low-cost product to its customer which affect the demand of the company product in the market. To handle the issue the company needs to create the effective marketing plan and strategy which helps the company to attract the new customer. The product which is offered by Telstra and Wesfarmers might not able to satisfy the need of the customer in the market due to change in the culture in the new market. The company before entering the new market needs to understand the following market attribute-
Market product attribute- The organization before entering the new market needs to consider that the market has viable need of product application and advancement and check that the market is not dominated by short product life cycle. The efforts also need to be made to identify that the product and service have worldwide demand and the market doesn’t create exposure to extraordinary financial liability.
Market customer attribute- The organization before entering the new market needs to check that the market offers the diversified mix of key customer product and offers the financial stable customer. The company should also check that the market support long term by fundamental economic and demographic growth and also the market has existing product and service users who will purchase another related offering.
Market service attribute- The organization also needs to check that the market doesn’t demand extraordinary distribution requirement and can be augmented with effective E-commerce tactics. The organization also needs to ensure that market supports centralized customer service location and also check that the product and service don’t create harm to company personnel (Evans, 2015).
Market competition attributes- The organization before entering the market needs to check that the market is not dominated by well-known competitor and supplier as it creates difficulty for the company to build its position in the market. The organization also needs to ensure that the market is not targeted for international penetration via pricing tactics and requires a reasonable level of the financial and technical resource before entering the market.
Market growth – The organization needs to check the history of growth in the market and check that the markets have a high probability of long-term future growth. The company also needs to ensure that market growth is not negatively affected by existing or pending legislature.
Access to raw material and human resources- The company at the time of expanding the business across the border faces difficulty in assessing raw material and human resources because all the countries don’t offer a similar level of access to critical raw material and skilled labour which is required to run your core business. For example, the Telstra and Wesfarmers require highly trained computer technicians and needs locate these resources in the country where educated employee are available for a higher salary in comparison to that of home country (Taylor, 2015). The availability of the human resources is the major challenge for the business while expanding their business abroad. The company has to rely on the resources which are locally available which creates difficulty for the company to conduct its existing operation with the similar efficiency with which the company was operating in the domestic market. The company before entering the market needs to check the availability of the resources before entering the market as it creates huge effect on the functioning of the business. The company needs to offer attractive salaries and perks to the employees as it helps in attracting quality staff which improves the quality of output. The company has also the choice to acquire the resources from the local market but it will add extra cost to the company product and service.
Government barrier-The organization needs to follow all the rules and regulation set by the government to avoid future contingency. The organization may face difficulty as the government of the particular country may or may not be receptive to foreign investment in general or to a certain type of distribution relationship. The restriction set by the government, high tariff and the limitation of the currency repatriation act as the decisive factor in determining whether the cost of market penetration will provide the benefit to the company (Moran, et. al., 2014). The organization before entering the market needs to understand how the government policy affects the business in the particular location. The organization before entering the new market needs to understand how the government policy affects the functioning of the business. For example Telstra and Wesfarmers has effectively grown its business to various countries due to the favorable policy of the government.
The company to effectively manage its operation across the border needs to collaborate with the company which has prior experience in the existing market. This will provide the understanding to the company of the local market and will also help in building company brand value in the new market. The company to capture the new market needs to extend its hiring practice to acquire quality resources for the company business. The company also needs to check the idea which will help the company to enter a new market and the impact which this idea will have to the existing foreign customer. Cullen, ET. al., (2013), the company needs to be consistent in branding and the organization also needs to make changes in the sales approach as per culture norms and the culture needs of foreign countries. The organization also needs to rely on the local sourcing to reduce the cost of production which also helps in improving cost margin and increasing supply chain reliability. The company before making the major decision needs to think through all the possible scenario based on the company current strength and weakness which is important for international expansion.
The culture has a huge influence on many aspects of international business due to the difference in communication, negotiation, behavior, and transaction. The difference in culture many of times affect the business transaction and the process of negotiating and deal making. The different organization follows different approach while negotiating process differently. It also has a huge impact on negotiating strategy and the potential outcome of the company (Pepper, Garrity and Salle, 2014).The business cannot rely on its current practice of conducting business operation when they are planning to expand their business globally. Different countries have different rules which need to be considered to effectively conduct the business operation. The international negotiation between the organizations not only requires technical proficiency but also needs to understand the context in which those negotiations are being done in order to secure the profitable contract.
The company can grow its business across the globe either through internal growth or by merger and acquisition. The company may face culture mismatch because the company takes huge time to adopt to a new culture. The merger with the current company is beneficiary because its helps the company in understanding market norms through the acquired unit which operates at the local level.
Because of the difference in culture the business person approach to deal making with one or two attitudes either the process in which both can gain or struggle or the other way in one side struggle and the other wins (Muenjohn and Armstrong, 2015). Before entering the negotiation both the party needs to make effort to understand the term of negotiation. There is a huge variation in the method of communication in different culture. Many of the organization rely on the direct and simple method on the other hand others rely on complex and indirect method. These style of communication in the same negotiation may lead to friction. It is hard for the company to make the assumption that expansion into the territories with higher culture difference will adversely affect the performance of the business. The importance of the cultural understanding of international company is reflected through a market strategy which is grounded in the culture of the target industry. The company with the less understanding of the target market will not be able to capture the new opportunity in the market.
The development of the technology has helped the company to manage its operation across the globe. The organization uses the latest technology which helps them to capture the new opportunity in the market. The Telstra has used the latest technology to reduce the cost of the production which has helped the company to capture the new opportunity in the market (Zhao, et. al., 2014). The Telstra has effectively used the latest technology to effectively coordinate between its various units. The development of the technology has reduced the burden by facilitating effective management of the company affairs. The Telstra has effectively used the latest technology to reduce cost and to perform other back office function. It also has helped the business to effectively maintain ample of data which helps in making an informed decision in relation to the business.
The development of the technology has also helped the company to improve their communication process which helps in building coordination between the various units of the company. With the introduction of the latest technology has increased the efficiency of the business to conduct its business globally (Guang and Trotter, 2012). The innovation in the technology has helped the company to reduce the cost related to both trade and transaction and also reduced the operation cost associated with the business. The innovation in technology has helped the company to improve the process and optimize efficiency by an interconnecting element of the production chain, such as real-time monitoring of capital equipment to reduce downtime and to conduct immediate service replacement.
The organization uses the technology to collect data from various units and apply advanced statistic analyze to make a better decision in relation to the business both for the purpose of business and for satisfying the need of the customer. It also helps in centralizing business operation to the advantage of economy of scale by improving buying power and eliminating the overlap faced by the company. It also helps the company to effectively manage its supply chain by tracking inventory level, process reordering automatically and match supply with the demand. This helps in reducing the cost of the product and also helps in delivering the quality service to its customer. The effective management of supply prevent the wastage of resources and helps in optimum utilization of resources.
The development of the technology facilitates the company with digital collaboration which helps in increasing the collaboration between the team (Davenport, 2013). The technology has also helped the company to lower its capital expenditure and increased business agility and resilience to failure. The development in technology has helped the company to capture the new opportunity in the market by selling the company’s product online. It has helped the company to sell its product to reach regional, national and international level. The development of the latest technology has also helped the employee of the company to increase their efficiency. A business owner can also choose to expand its business operation using technology rather than the employees if the technology will provide better production output.
So it can be concluded from the above report that the company faces huge difficulty while conducting its operation across the border. The company before entering the market needs to identify the factor which may affect the functioning of the business to successfully expand its business. The organization needs to analyze each factor and the impact it will create on business operation. The company needs to develop the marketing strategy to build the company brand value in the new market. The organization also needs to understand the effect of the culture and how it affect the operation of the business across the border. The organization can also use the latest technology to effectively manage its business operation across the globe.
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