The importance of cultural awareness in global expansion of business

One fundamental consideration is the structure of your organization and the location of your teams.

The importance of cultural awareness in global expansion of business

May be fewer media and more restrictions Transport Several competitive modes May be inadequate appeal to customers in other countries. Some rudimentary aspects of international strategies mirror domestic strategies in that companies must determine what products or services to sell, where and how to sell them, where and how they will produce or provide them, and how they will compete with other companies in the industry in accordance with company goals.

The development of international strategies entails attention to other details that seldom, if ever, come into play in the domestic market.

These other areas of concern stem from cultural, geographic, and political differences. Consequently, while a company only has to develop a strategy taking into account known governmental regulations, one language generallyand one currency in a domestic market, it must consider and plan for different levels and kinds of governmental regulation, multiple currencies, and several languages in the global market.

The most recent wave of globalization by U. Part of the motivation for this globalization stemmed from the lost market share in the s to multinational companies from other countries, especially those from Japan.

After adapting these practices to meet the needs of U. The globalization of U. These charges have been accompanied by demonstrations and consumer boycotts.

Companies in the rest of the developed world have globalized along with U. Interestingly, in the late twentieth and early twenty-first century, there has also been a growth in international companies from developing and transitional countries, and this trend can be expected to continue and increase.

Exports and investment from the People's Republic of China are a notable example, but companies from Southeast Asia, India, South Africa, and Latin America, to name some countries and regions, are making themselves known around the world. Companies may decide to trade tangible goods such as automobiles and electronics merchandise exports and imports.

Alternatively, companies may decide to trade intangible products such as financial or legal services service exports and imports. Companies may enter the global market through various kinds of international investments. Companies may choose to make foreign direct investments, which allow them to control companies and assets in other countries.

In addition, companies may elect to make portfolio investments, by acquiring the stock of companies in other countries in order to gain control of these companies. Another way companies tap into the global market is by forming strategic alliances with companies in other countries.

Microfinance - Wikipedia

While strategic alliances come in many forms, some enable each company to access the home market of the other and thereby market their products as being affiliated with the well-known host company.

This method of international business also enables a company to bypass some of the difficulties associated with internationalization such as different political, regulatory, and social conditions.

The home company can help the multinational company address and overcome these difficulties because it is accustomed to them. Finally, companies may participate in the international market by either licensing or franchising. Licensing involves granting another company the right to use its brand names, trademarks, copyrights, or patents in exchange for royalty payments.

Franchising, on the other hand, is when one company agrees to allow a company in another country to use its name and methods of operations in exchange for royalty payments. The first component encompasses the geographic locations—countries and regions—of possible operations as well as possible markets or niches in various regions.

BREAKING DOWN 'Globalization'

Since companies have limited resources and since different regions offer different advantages, managers must select the markets that offer the company the optimal opportunities.

The second component of the global strategy focuses on use of company resources so that a company can compete successfully in the chosen markets. This component of strategy planning also determines the relative importance of various company functions and bases the allocation of resources on the relative importance of each function.

For instance, a company may decide to allocate its resources based on product lines or geographical locations. Next, management must decide where the company can achieve competitive advantage over other companies in the industry.

The Importance of Cross Cultural Awareness in Business | The International Student Blog

Management can identify their competitive advantage by determining what the company does better or can do better than its competitors. Companies may realize this advantage through a host of techniques such as using superior technology, implementing more efficient organizational practices and distribution systems, and cultivating well-known brands.

This component of the strategy involves not only identifying existing or potential areas of competitive advantage but also developing a plan for sustaining areas of competitive advantage.

Finally, global strategy should involve establishing a plan for the company that enables its various functions and operations to benefit one another. For example, a company can use one line of products to encourage sales of another line of products and thereby enabling different parts of a business to benefit from each other.

The importance of cultural awareness in global expansion of business

Many companies are now outsourcing many of their operations internationally. For example, if you call to get information on your credit card, you may well be talking to someone in India or Mexico.

Equally, manufacturers often outsource production to low labor cost countries. Concerns over ethical issues, such as slave and child labor, have led to companies outsourcing under controlled conditions—offshore production may be subject to surprise visits and searches and outsourced factories are required to conform to specific criteria.

When planning a strategy, companies identify their international objectives and put together a strategy that will enable them to realize their goals.Why students need a global awareness and understanding of other cultures From trips to Normandy beaches to language blogs, José Picardo explores the growing importance of offering students.

Executive Summary. Reprint: RH. Like it or not, English is the global language of business. Today billion people speak English at a useful level—that’s one in four of us.

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Many agencies have decided to go global and embrace the opportunities it presents, but such an important expansion is rarely an easy and problem-free exercise.

There are many challenges and risks, and the fact that business works differently in other countries is a key one. Globalization was the buzzword of the s, and in the twenty first century, there is no evidence that globalization will diminish.

Essentially, globalization refers to growth of trade and investment, accompanied by the growth in international businesses, and . Cross-cultural Skills to Enhance your International Management Skills Emotional intelligence, people skills and flexibility – 3 key skills of future leaders The Guardian released the findings of a study, run in conjunction with Cass Business School, which interviewed senior executives from a wide range of industries and geographies.

Microfinance initially had a limited definition - the provision of microloans to poor entrepreneurs and small businesses lacking access to bank and related services. The two main mechanisms for the delivery of financial services to such clients were: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come.

The Importance of Cross Cultural Awareness in Business | The International Student Blog