Research Paper: The Need to Globalize

Sample Research Paper

Words 1,320

With shrinking borders and advances in technology and telecommunication, businesses have been pressurized to cater to borderless markets. The question of going global is usually not whether a company will or will not, it is more on the lines of how or how soon.

However, the bigger the market the larger the number of segments within it and hence the larger the risk and investment needed to cater effectively to such a large customer base (Ameinfo 2001). So on one side the company is faced with the risk of failure when entering a foreign market, while on the other side (if it decides not to go international) there is the surety of failure; a company that limits itself to the local market cannot achieve the economies of scale that others can. In addition, foreign companies will flood the local market with a variety of reasonably priced goods that will inevitably erode the local marketers’ share.  The advantages of taking company global are not limited to the demand side i.e. a larger customer base and hence opportunities for higher sales, in fact, to the contrary, supply side advantages (byGalicia) in developing nations can leverage the entire business; cheaper raw materials and labor, call centre outsourcing possibilities in countries like India and Pakistan, and risk of entering a new market can also be reduced by joint venturing with locals.

Going International- Stages of Evolution

Much research has gone into suitable planning for taking your local business into the international arena. In their book, Global Marketing Management, Kotabe and Helsen  go into the details of how a company advances into the global scene (2000: 11). They state ‘Domestic Marketing’ as the first stage where companies initially start off by mastering the art of business in their local market. The task of marketing to such an audience is simplified by the ethnocentric tendencies and hence isolation from global market forces.

With increasing volume of business, a company usually faces a changing environment due to competition from abroad and adjusts by fulfilling orders from foreign customers. This is refered to as ‘Export Markeing’ and the  adjustment is forced rather than a deliberate attempt to export. At this stage the company may resort to either direct of indirect export options, depending on the cost benefit analysis of each.

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