or any successful international business. Eligibility to trade is

or processes. Glocalisation recognizes that economic synergies are limited by deeply ingrained cultural systems resistant to change.

1.   Counter Attack by Established multinational

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The large corporations from developed economies – should not be underestimated in their capacity to react to this new competition. They have the expertise, the experience of operating in very competitive markets, vast knowledge base, and the huge amount of resources which result in a capability of overcoming challenges like this.

The turf could be home or overseas, but the competition has increased. In this highly globalized world, the innovation and efficiency is the key to survival. Merely tapping the resources and markets cannot help anymore. The businesses are dying at the rate faster than ever heard.

 

2.   Slower World Growth

The lower world growth in recent years including in many of the emerging market multinationals’ home markets has also affected such businesses. This is not really to the advantage of those firms that have surfed on this growth wave. Many of these firms emerged as a result of globalization, technological advancement, better communications and indeed a fast world growth.

 

The most of these businesses are chasing the growth as the cost of profits, and the tapering of growth will hurt them badly.

 

3.     Legal and Regulations

Along with getting your company structure in place, gaining a comprehensive understanding of the local laws and regulations governing your target markets is key. From tax implications through to trading laws, navigating legal requirements is a central function of any successful international business. Eligibility to trade is a significant consideration, as are potential tariffs and the legal costs associated with entering new markets.

It’s important to note that employment and labour requirements also differ by country. For instance, European countries stipulate that a minimum of 14-weeks maternity leave be offered to employees, while on the other hand, there is no such requirement for U.S. employers. With the complexity involved in foreign trade and employment laws, investing in knowledgeable and experienced corporate counsel can prove invaluable.

 

4.     Global Pricing Strategy

Unlike the home turf, setting the price for the products and services can present challenges when doing business overseas. The cost and revenue structure could be totally different and even the brand position could change.

 

Researching the prices of direct, local-market competitors can give a benchmark, however, it remains essential to ensure the math work in the favor of the entrant.  For instance, the cost of production and shipping, labour, marketing, and distribution, as well as the margin, must be a taken into account for the business to be viable.

Pricing can also come down to how the MNE choose to position the brand — should the cost of the product reflect luxury status? Or will low prices help to penetrate a new market?

 

9        Currency Rates

While price setting and payment methods are major considerations, currency rate fluctuation is one of the most challenging international business problems to navigate. Monitoring exchange rates must, therefore, be a central part of the strategy for all international businesses. However, global economic volatility can make forecasting profit especially difficult, particularly when rates fluctuate at unpredictable levels.

 

Major fluctuations can seriously impact the balance of business expenses and profit. For instance, if any MNE paying suppliers and production costs in U.S. dollars, but selling in markets with a weaker or more unpredictable currency, it could end up with a much smaller margin — or even a loss.

 or processes. Glocalisation recognizes that economic synergies are limited by deeply ingrained cultural systems resistant to change.

1.   Counter Attack by Established multinational

The large corporations from developed economies – should not be underestimated in their capacity to react to this new competition. They have the expertise, the experience of operating in very competitive markets, vast knowledge base, and the huge amount of resources which result in a capability of overcoming challenges like this.

The turf could be home or overseas, but the competition has increased. In this highly globalized world, the innovation and efficiency is the key to survival. Merely tapping the resources and markets cannot help anymore. The businesses are dying at the rate faster than ever heard.

 

2.   Slower World Growth

The lower world growth in recent years including in many of the emerging market multinationals’ home markets has also affected such businesses. This is not really to the advantage of those firms that have surfed on this growth wave. Many of these firms emerged as a result of globalization, technological advancement, better communications and indeed a fast world growth.

 

The most of these businesses are chasing the growth as the cost of profits, and the tapering of growth will hurt them badly.

 

3.     Legal and Regulations

Along with getting your company structure in place, gaining a comprehensive understanding of the local laws and regulations governing your target markets is key. From tax implications through to trading laws, navigating legal requirements is a central function of any successful international business. Eligibility to trade is a significant consideration, as are potential tariffs and the legal costs associated with entering new markets.

It’s important to note that employment and labour requirements also differ by country. For instance, European countries stipulate that a minimum of 14-weeks maternity leave be offered to employees, while on the other hand, there is no such requirement for U.S. employers. With the complexity involved in foreign trade and employment laws, investing in knowledgeable and experienced corporate counsel can prove invaluable.

 

4.     Global Pricing Strategy

Unlike the home turf, setting the price for the products and services can present challenges when doing business overseas. The cost and revenue structure could be totally different and even the brand position could change.

 

Researching the prices of direct, local-market competitors can give a benchmark, however, it remains essential to ensure the math work in the favor of the entrant.  For instance, the cost of production and shipping, labour, marketing, and distribution, as well as the margin, must be a taken into account for the business to be viable.

Pricing can also come down to how the MNE choose to position the brand — should the cost of the product reflect luxury status? Or will low prices help to penetrate a new market?

 

9        Currency Rates

While price setting and payment methods are major considerations, currency rate fluctuation is one of the most challenging international business problems to navigate. Monitoring exchange rates must, therefore, be a central part of the strategy for all international businesses. However, global economic volatility can make forecasting profit especially difficult, particularly when rates fluctuate at unpredictable levels.

 

Major fluctuations can seriously impact the balance of business expenses and profit. For instance, if any MNE paying suppliers and production costs in U.S. dollars, but selling in markets with a weaker or more unpredictable currency, it could end up with a much smaller margin — or even a loss.

 

                                          Conclusion

The globalization is here to stay and economies will keep integrating with rest of the world. Adaptability to changing technology and focus on the core strength is key to survival.

Some of the mantras are as follows:

1.      Go GLOCAL- Think global but act locally. One may have the grand strategies but until or unless the customer is happy all is in theory.

2.      Have a clear and deep understanding of the market before entering. It might differ totally from the way EMM does business at home.

3.      Build a strong foundation before entering into any market. The essential toolkit may include the information and readiness on: –

–          International company structure

–          Foreign laws and regulations

–          International accounting

–          Cost calculation and global pricing strategy

–          Universal payment methods

–          Currency rates

–          Choosing the right global shipment methods

–          Communication difficulties and cultural differences

–          Political risks

–          Supply chain complexity and risks of labor exploitation

–          Worldwide environmental issues

4.      Focus on the core strengths, however, don’t get constrained by these. Build on these strengths and rise high on the value chain to grow and stay relevant in the highly competitive scenario.

5.      Assess and strategize to meet the political, economic, social, and infrastructural challenge before taking the plunge.

6.      Embrace the technological and regulatory changes and disruptions and keep evolving.

7.      Bridge the cultural gaps.