Doing Business Across Flashcard
If the company decides to produce goods abroad and do it alone, it would need the government’s intervention.
The US government would have to play a pivotal role in fostering good relations with the foreign country. Without such good relationship, it would be almost impossible for Homegrown to carry out business internationally. The government would also be of essence in representing the company in various Trade Unions. In the exportation of raw materials to and from the foreign company and the company may in one way or the other be affected by government legislations.The government’s policy on taxation can favorably or adversely affect its operations. The company would require the government to offer subsidies that would curb its operating costs.
This would in turn enable it to charge low prices for its products without making losses. As a result, the firm would be able to withstand competition from other firms that would be selling their products at higher prices. The media would be very instrumental in marketing Homegrown’s products.Awareness one the product’s quality and utility would be advertised in televisions and printed media.
The company would also sponsor certain social activities like games whereby the company’s name should be used in the sportswear. Thirdly, the company shall use free samples aimed at attracting customers into using its products. The management has also researched and found out that electronic commerce shall be very instrumental in marketing its products. This is a more reliable method as it reaches a wider people network.
The other programs that the company would employ are; e-books, promotion coverage, road shows, etc. The company would also use the yellow pages to market its goods. In carrying out marketing, it is important to understand certain cultural issues that would come into play. Different cross-cultural factors may adversely affect the would be outcomes of international business. It is therefore inevitable for management to fully understand them while carrying out the marketing process.
In the US for instance, packaging is highly regarded. It is synonymous to quality.This is not the case with the Asian countries where the focus is on the product itself. The company should also understand and appreciate the different communication styles and beliefs of people in different geographical places. In the US for instance, price bargaining are very common, a culture that is not common with the European and Asian countries. It is therefore important to consider this factor in product pricing.
The company should also consider whether or not to make their products unique from the design used by other companies in the same industry.This is because, unlike in the US where product uniqueness is highly regarded, in other areas the culture practiced is that of group fitting. The company should therefore adapt similar production techniques similar to those existing in that market. The price at which the products would be charged will depend on the prevailing economic conditions. The inflation rate in the economy has an effect on prices.
During high inflation rates, the price of raw materials is high. During these periods, the company would charge high prices for its products to counter inflation.Consequently, the company would charge low prices for its products in times of declining interest rates as the prices of raw materials would be low. Another factor that would influence the price to be charged is the consumer’s purchasing power. This means that changes in the spending income at both micro and macro levels would affect production and demand. Demand would then affect prices to be charged.
The taxation policy of any given Nation also affects what the company would charge for its products.If the economy is characterized by high taxes, then Homegrown would have to charge highly for its products to compensate it from these high statutory deductions.REFERENCESBeth V. Yarbrough, Robert M Yarbrough, The World Economy: Trade and Finance, South Western College Publishers, 2002 Ernest Gundling, Working Globesmart: 12 people skills for Doing Business Across Borders, Davis Black Publishers, 2003. Justin J Camp, Venture Capital Due Diligence: A guide to making smart Investment choices and increasing your portfolio returns, Wiley 2002