BUSN3430 Global Business Environment

Introduction

The company XYZ limited is a multinational professional services professional services network, accounting, partnerships, and an analytics company based on the United Kingdom. It has a current market of over 500 million pounds (GBP) as of 2020, and is trying to expand into the most promising and emerging big economy of the world, India. The current employee of the firm is nearly 25, 000 and have come of a long way since 2010s. The firm currently works across 400 different places of the UK, and is trying to stretch further, and particularly wants to enter India. The company is doing really well, and a very good customer rating services, and used to provide online consultancy to big companies on a very large scale. Headquarter in London, XYZ is planning to go global, and extend the market share to 800 million pounds (GBP) in two years, and is seeking to give jobs to over 75,000 employees globally (Prashantham, Eranova and Couper 2018). The paper aims to discuss, and analyze various attributes in global business that impacts a global business, and market entry in the global economy.

Protecting Intellectual Property (IP) in a Globalized Economy

There is a vast scope of intellectual property in a global economy that plays a vital role in the global business, and its expansion. Innovation, technology, and safeguarding the intellectual property rights of companies, corporates, and global trade organizations are crucial pillars of the global economy. To keep a safe practice of technological innovations, patents, and geographical indication tags special legislative, and ethical codes must be safeguarded (Christensen and Kowalczyk 2017). The World trade Organization, and the United Nations Center for Trade and Development (UNCTAD) gives necessary framework of protecting Intellectual Property (IP) rights. Establishing a global IP protection framework, balanced, and far-sighted judicial basis protects innovation, technology, and also encourages future IP-optimization, up-scaling research and development. Collectively these factors promotes a better scope of globalization of business (Hameed et al. 2021).

Managing Business Functions in an International Context

In the context of managing the international business, the first factor that should come to the mind of the business manager is the strategic redressal of the issue that international business faces. Firstly, the trade barriers must be negotiated via trade agreements. The governments must be taken in favor while doing international business. Cross-border trade impediments are the next issue which also needs to be solve by economic tie-ups, facilitating trade policies, and managing the trade-blocs effectively. Additionally, special tax rates, and tariff should be incorporated between the concerned countries (Stiglitz 2017).

Above all, a string bilateral, or, multilateral partnership both in diplomatic, and in economic level promotes international business at its best, and for this to happen, the mangers must approach to the trade ministry for making special nexus with the concerned country. Such as UK is looking ahead to make deep ties with India, and a special bilateral meeting between the prime minister of both the countries has just happened two weeks back that negotiated special economic ties, massive trade goals, and special tariff rates for British companies investing in India. Taking the situation in favor could be really bring in commendable results for XYZ limited in expanding into India (Crane et al. 2019).

The Impact of National Cultures in International Markets

National culture is a vital part of international business that deeply impacts the implementation, development, and concussion on the international business. Thus, the international business managers must focus on fixing the cultural gaps that could impact the international business in the context of cultural exclusivity (Ghemawat 2017). But, in spite of cognizance of the prevailing culture of the target county, the manger looking to expand into the country just try to implement the same cultural practices that they uses in their native country. Globalization has taught the business managers to adopt according to the target market’s culture. Most competitive advantage is incorporated by the marketing managers’ strategy for the need of aligning with the environment of the country the business is willing to expand into.

Culture also percolates into international consumer behavior analytics, tourism marketing, online marketing, and broadening the scope of selling products, and consultancy that the doorsteps (Landsbury et al. 2020). The first step that the mangers must take is to have clear idea about the cultural practices in the market economy concerned. Mostly, if the western economy is seen, it is evident that the entire system is nothing promoting consumerism. Thus, a new definition of developed nation has changed such that the nations where there are too many consumable items, and services are said t be developed nations. This has got nothing to do with the basic necessities. As market research has shown that an average American consumes twenty time more than the actual necessity if the people for living with basic amenities in life (Jain and Pandey 2019).

While if the great Indian culture taken into consideration, there is clear difference of rising above being mere physical being whose goal is to consume more like the western people. Indians have given the world great sages, sagacity, erudition, yoga, spirituality, and rising above mere human beings. Hence, a minimalistic consumption is promoted since the ages of the Vedas. However, in the last two decades a massive surge in foreign investment has been instilled, and the consumerist market is being expanded. Still, cultural competence, and real necessity is required for XYZ to really expand into India (Oates 2017).

Assessment of Entry Strategies in International Markets

Various strategies of entering into international markets are established but, the consideration of risk throughout the process must be delineated right from the very beginning. Exporting is the first method that plays a vital role on international market entry, and assuring the same with efficacy will be decisive in the expansion of the business in the long run (Oyevaar, Vazquez-Brust and Van Bommel 2016). The lowest risk is attached with exporting into foreign markets. All the facilitating factors must be tuned before diving into the exporting business that suits the concerned country. However, eth logistics, and transport cost must be effectively managed in order to maintain the cost-competitiveness. The next stage that comes is the stage of licensing that gives protection of trademarks, intellectual properties, business secrets, innovations, and patents.

Low investment in licensing gives high returns, and this will also take care of manufacturing license in the foreign economy so that cost-competitiveness stays alive (Scott 2017).  Joint venture could be another strategy that also enhances the scope of international market entry where two businesses jointly-dives into the market.  The another part of the joint-venture company should be a local one that have prior knowledge, expertise, and market data about the existing market, and hence, tying with the local company will give a good advantage to the investor company, and will protect the investor from unforeseen risks (Ahi et al. 2017). Then, Foreign Direct Investment (FDI) could also be very effective strategy for the business to enter an international market. FDI gives good control of the foreign market, covering the costs like staff, technology, and premises which can be either by investing a huge sum of money or by buying an existing company of the economy concerned (Vyas 2015).

Assessment of Appropriate Global Strategy for the Local Company

The XYZ Company is seeking to invest worldwide and going global, and to start with the most promising and rising economy of the world, India. Since, the company is not a product-based industry, it a service-based one. Existing big companies of market analytics, audit, taxation, multinational professional services professional services network, and partnerships are already there in good numbers, and with a good bas of clients. Hence, to conclude the entry strategy in a lien is very difficult. Exporting is not feasible in this case. Joint-venture, FDI, and investing more in licensing would be beneficial in the long run (Chakrabarti and Sen 2015).

Tying up with big corporates in this field such as Deloitte, PwC, and KPMG will be a good option to learn a lot, and gather knowledge, expertise, and a details about the needs of the market. Thereafter, gradual self-resilience would be feasible five-ten years down the line. However, for other economies where a lot of competition is not present tin the relevant plane, there Exporting could be a good option that will reduce down the cost of investing in infrastructure, manpower, finance, and the scope of flopping of the business mitigates. Additionally, rapid licensing will also give the XYZ ltd. the first-mover advantage in developing nations such as Bangladesh, Indonesia, ASEAN nations, and South Africa (Ravi et al. 2019).

Conclusion

The paper discussed, and analyzed various attributes in global business that impacts a global business, and market entry in the global economy. Various strategies, cultural competence is contemplated for the business. For investment in India, Joint-venture, FDI, and investing more in licensing would be beneficial in the long run. However, exporting and licensing strategy will be beneficial when investment is concerned in developing nations.

References

Ahi, A., Baronchelli, G., Kuivalainen, O. and Piantoni, M., 2017. International market entry: how do small and medium-sized enterprises make decisions?. Journal of International Marketing, 25(1), pp.1-21.

Chakrabarti, G. and Sen, C., 2015. Green Investing: The Case of India. Springer India.

Christensen, B.J. and Kowalczyk, C., 2017. Introduction to globalization: Strategies and effects. In Globalization (pp. 1-16). Springer, Berlin, Heidelberg.

Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, USA.

Ghemawat, P., 2017. The laws of globalization and business applications. Cambridge University Press.

Hameed, K., Arshed, N., Yazdani, N. and Munir, M., 2021. On globalization and business competitiveness: A panel data country classification. Estudios de economía aplicada, 39(1), p.10.

Jain, R.K. and Pandey, S., 2019. The EU global strategy and EU–India relations: a perceptions study. In Shaping the EU Global Strategy (pp. 101-126). Palgrave Macmillan, Cham.

Lansbury, R.D., Wright, C.F., Bamber, G.J. and Wailes, N. eds., 2020. International and comparative employment relations: National regulation, global changes. Routledge.

Oates, A., 2017. Industrial Relations and the Environment in the UK 1. In Greening People (pp. 117-140). Routledge.

Oyevaar, M., Vazquez-Brust, D. and Van Bommel, H., 2016. Globalization and sustainable development: a business perspective. Macmillan International Higher Education.

Prashantham, S., Eranova, M. and Couper, C., 2018. Globalization, entrepreneurship and paradox thinking. Asia Pacific Journal of Management, 35(1), pp.1-9.

Ravi, S., Gustafsson-Wright, E., Sharma, P. and Boggild-Jones, I., 2019. The Promise of Impact Investing in India.

Scott, D., 2017. The rise of India: UK perspectives. International Affairs, 93(1), pp.165-188.

Stiglitz, J.E., 2017. The overselling of globalization. Business Economics, 52(3), pp.129-137.

Vyas, A.V., 2015. An analytical study of FDI in India. International Journal of Scientific and Research Publications, 5(10), pp.1-30.

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