1.

0 Definition of Global Firm & 6 Major International Marketing

Decisions

1.1)

Global Firm Definition

The term is used describe companies that operate in multiple countries across
continental borders. A global company is the opposite of a domestic business, which
operates in only one country.
Global companies are also known as multinational corporations, or MNCs. A company
extends beyond its domestic borders to become global to gain greater access to a
broader customer base and revenue streams. Additional specific motives may include:

Gaining traction in less competitive marketplaces

Gaining access to talent and resources not available in the home country

Acquiring new capital sources for use in expanding the business

Diversifying the risks present in operating in just one country

Seizing open market opportunities that align with core business competencies

Operating a global company involves many more challenges than operating a typical
domestic company. Higher costs in distribution, transportation, advertising, travel and
supply acquisition are common. Beyond that, global companies must establish a strong
network of partners and suppliers across the countries in which they operate. Other
challenges are present in particular business functions, including:

Human resources: Creating a unified work culture when you have employees
from many countries and cultural backgrounds is difficult. Global businesses often
try to identify a few shared, core values to emphasize.

Marketing: The first key in global marketing is to choose between a global or

international strategy. A global strategy means your approach is basically the same
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in all countries. An international approach means you customize your brand or

communication in different countries. Regardless of the strategy, significant time
and investment are needed to research the needs, preferences and values of
customers in multiple countries.

Finance and accounting: Finance and accounting practices and ethical standards
vary across the world. Maintaining a consistent approach is important. Companies
must also consider the impact of currency rate fluctuation, which may cause higher
or lower profit results when bringing foreign revenue back to the home country.

1.2)

6 Major International Marketing Decisions

2.0 The Factors do Company Consider When Deciding on Possible

Global Markets to Enter
As globalizations are increasing, a global strategic perspective will be the
important thing for big companies that are starting in medium size. People all around the
world that have different tastes, preferences and lifestyle are keep changing as their
conscious with the fast flow of the information around the world. The companies that are
starting with the medium size, which is wanted to enter the global market in order to
expand their market size. Global market is the activity of trade, buying and selling goods
and services in all the countries of the world, or the value of the goods and services that
have been sold. Proper global marketing activity can be the ability to boost a company
to the next level such as succeed or fail. Different marketing strategies are also included
within the different countries that have been chosen by companies. However, in order to
deciding to choose possible global markets to enter, companies should learn the factors
that would help them to choose their possible global market.
Second factors that should be noted by the companies that wanted to enter the
global market are the political-legal environment. Political-legal or regulatory
environment can be defined as the laws and regulation that companies should follow in
order to make sure the companies did not get caught, or have the business fined for
noncompliance of some regulation. The laws are being by the politician who enacted
these laws based on the likelihood they will get re-elected. Some countries are varying
greatly in their political-legal environment. In order to do some market activity in certain
country, a company should considers a factors such as the countrys attitude towards
international buying and selling, government bureaucracy, political stability and
monetary regulations. Attitude of the country political environment towards foreign
companies, products and citizens have to be seriously considered. Some of the nations
are very receptive to foreign firms meanwhile others are less accommodating. For
example Singapore and Thailand, which are court foreign investors and shower them
with incentives and favorable operating conditions. However, the countries that have
market attractiveness such as Venezuela, but has unstable political and regulatory
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situation in economy such as inflation and steep public spending, this will increase the
risk the risk of doing business there. Next, the companies should consider the countries
currencies regulations because they wanted to take profits in a currency of value to
them. However, they can accept the blocked currency which is being removed from the
country is restricted by the buyers government if they can buy other goods in that
country that they need themselves or can sell elsewhere for a high risks for the seller.
Third factor that company should learn before entering the right global marketing
for them is cultural environment. Each country in the world has their own natives and
people that follow their own folkways, norms and taboos. The companies should
consider on how the culture would affect the consumers reactions towards each of the
global marketing strategies that have been made. Companies that are ignoring the
cultural norms and differences can make some very expensive and embarrassing
mistakes. For example, the companies that have make mistake with racial issues.
Business norm and behaviors are also varying from country to country. They have
differences in how to approach in person in each country. By understanding this type of
factor, this can help companies to avoid embarrassing mistakes but also take advantage
of cross-cultural opportunities.
Other factors that companies should know before entering new market
environment is market attractiveness that can be assessed by evaluating the market
potential in terms of revenues that can be generated, access to the market in terms of
the host country being warm to investments. The revenue and profit potential of a
market can be judged on the basis of the level of initial investment required in
establishing the operations, the gestation period, the industry structure, and the number
and degree of obstacles that the company must face besides competition, for example
micro-environment factors. A big market with a rapid growth can be very attractive and
big-upfront investments can be justified in such market.

Lastly, a companies that decided to go to global should realize their capability to

enter the global market. They need to prepare the audit of their capabilty and their
resources. They also need to have the clear competitive advantages in terms of market
knowledge, technology, portfolio of their products, reliable partners and other relaible
parameters. They should have the experiences towards foreign country especially the
country the wanted to enter for marketing.

3.0 3 Ways to Enter Foreign Markets

There are three ways to enter foreign markets is exporting, joint venturing and direct
investment.
3.1) Exporting
For the first one is exporting that refers to the commercial process of selling and
shipping goods to the foreign country and as the simplest way to enter the foreign
market. It also the most common entry approached for a small firm.
There can be categorized to direct and indirect, for direct exporting can be relate the
company which whereby the firm handle their own export and the investment and risk is
greater but it has potential return.
After that, indirect exporting that involves less investment because the firm does not
require an overseas marketing organization and also less risk. Thus, it usually means
the company that sells to a buyer in the country who in charge in exports the product.

3.2) Joint Venturing

The second ways is joint venturing which can be related on joining with a foreign
company to produce or market products or services. It differs from exporting in the
company which joins with a host country partner to sell market abroad. There are four
types of joint ventures that is licensing, contract manufacturing, management
contracting and joint ownership.
i.

Licensing

Licensing can be relate on a simple way for manufacturer to enter international

market. Thus, it involves the agreement with a licensee in foreign market. For the
payment, the licensee buys the right to use the company manufacturing in the
process, trademark, patent, trade secret and other item value.
ii.

Contract Manufacturing

Can be defines as the company contract with manufacturers in the foreign market to
produce or provide the service. This venture allows for a fast start up, less risk,
however there are decreased control over the manufacturing process and loss of
potential profits.
iii.

Management Contracting

Management contracting is the domestic firm supplies management know-how to a

foreign company that supplies the capital. It also refers on the domestic company
exports management services rather than products. This is a low risk strategy
method which allows an income right from its initial set-up.
iv.

Joint Ownership

Joint ownership consisted of one company joining forces with foreign investors to
create a local business in which they share joint ownership and control. A company
would likely use this option to enter a foreign market if they lack the financial,
physical, or managerial resources to undertake the venture alone.

3.3) Direct Investment

The third way to enter the foreign market is direct investment which is the development
of foreign-based assembly or manufacturing facilities. It is likely an option is far more
likely to be undertaken by large corporations because of the huge capital requirements.
An advantage of direct investment is a likely lowering of costs by utilizing cheaper labor
and raw materials, reducing transportation costs, avoiding high import taxes, and
accessing foreign government investment incentives.
Generally, this method leads to better business relationships with the foreign countries
as it uses local suppliers, customers, and distributors.