Growth is a way of life. Almost all organizations plan to expand. This strategy is followed when an organization aims at higher growth by broadening its one or more of its business in terms of their respective customer groups, customers functions, and alternative technologies singly or jointly — in order to improve its overall performance. There are four types of expansion (Growth) strategies Expansion through concentration Expansion through integration Expansion through diversification Expansion through cooperation 1. Expansion through concentration It involves converging resources in one or more of firms businesses in terms of their respective customer needs, customer functions, or alternative technologies either singly or jointly, in such a manner that it results in expansions. A firm that is familiar with an industry would naturally like to invest more in known business rather than unknown business. Concentration can be done through Market Penetration: It involves selling more products to the Continue reading
International Business Management
International Asset Protection
Company’s investments and other assets in foreign countries may face the risk of expropriation. Governments are therefore concerned about the protection of the interests of their national companies in the foreign countries. The potential risk was more before the worldwide liberalization set in the 1980s. Important protective measures in this respect include the following: Coercion and Pressure Until the Second World War, home countries used military force and coercion to ensure that host governments would give foreign investors prompt, adequate, and effective compensation in cases of expropriation, under a concept known as the international standard of fair dealing. It may be noted that the home countries of the companies involved were developed ones and the host countries were developing nations and these host countries had little to say about this standard. In a two conference held at The Hague in 1930 and at Montevideo in 1933, participating developing countries got Continue reading
Issues of International Technology Transfers
International technology transfer is the process by which a technology, expertise, know how or facilities developed by one business organization (MNC in the case of international business) is transferred to another business organization. There are many issues associated with the international technology transfer. The most important international technology transfer issues are; ways of technology acquisition, choice of technology, terms of technology transfer, and creating local capability. Modes of Foreign Technology Acquisition One of the major issues in technology transfer relates to the mode of acquisition. Developing new technology may conjure up visions of scientists and product developers working in R&D laboratories. In reality, new technology comes from many different sources, including suppliers, manufactures, users, other industries, universities, government, and MNCs . While every source needs to be explored, each firm has specific sources for most of the new technologies. For example, because of the limited size of most farming operations, Continue reading
The Relevance of Stakeholder Management in International Business Context
Stakeholders can be defined as an internal and external party to the organization which is having interest in the operations of the organization. Stakeholders can create an impact on the actions, objectives, and policies of the organization. Stakeholders may get affected by the objectives, policies, and actions of the business. Stakeholders may have a direct or indirect interest in the operations of the organization. Stakeholders of an organization can be of different types. These different types of stakeholders include management and employees, customers, investors and suppliers, banks and other financial organizations, government, trade unions and pressure groups. The term stakeholder management can be defined as the process of engaging and enrolling the stakeholders in the operations of the business so as to make them accountable, responsible, consulted and informed. Stakeholder management is concerned regarding the fit between the values or the organization and expectations of the stakeholders for determining the Continue reading
Case Study: Starbucks Successful Entry into the Japanese Market
Starbucks is a chain of coffee shops created by Jerry Baldwin, Gordon Bowker, and Zev Siegl in 1971 in the American city of Seattle. At first, they sold roasted coffee beans, but in 1987 the company was sold to Howard Schultz, who began to form the chain known today. At the moment (2021), it has reached annual revenue of about 24 billion dollars. The American coffee company has 32,660 coffee shops worldwide and continues to expand. For example, in China, one of the most priority markets, Starbucks Corp. It has about 3,700 coffee shops and opens new ones approximately every 15 hours – 600 locations per year. The goal by 2023 year is 6000 new coffee shops. The company is implementing plans for delivery services in the United States and other countries. The main competitors of Starbucks are Caffè Nero, Costa Coffee, Mc Café, Dunkin Donuts, Cafè Ritazza, Café Coffee Continue reading
Technology Risk in Business – Challenges of Changing Technology in Business
The changing technology environment has and still become one of the biggest challenges in international business management. Technological changes can wreak havoc on industries. In making decisions regarding technological changes, companies err in two ways. They either commit themselves to a new technology too fast and burn their fingers or wait and watch while another company comes up with a new technology that puts them out of business. The issue of when and how to react to the emergence of a new technology is a matter of judgment. However, this judgment need not be based purely on intuition. By doing a systematic structured analysis of developments in the technological environment and putting in place the necessary organizational mechanisms, technology risk in business can be considerably reduced. How can managers identify the emergence of a disruptive technology? Clayton Christensen’s research reveals that disruptive technologies are often developed privately by engineers working Continue reading