International Operations

Would you consider an international market in your business?
As an upcoming entrepreneur, I was confronted with the question, “if there were a market for it, would you consider entering an international market for a product or service that you offer?” Initially I thought to myself, sure why not this would be a great opportunity to grow a business. However, I deeply reflected on the possibility and decided that it would not be in my best interest to market my enterprise globally especially before it is established and growing.

International marketing is when a company that is based in one country decides to sell products or a service in another. Like your company based in the United States distributing your product in Europe. International marketing can be compared to a franchise being established in another country. The parent company still owns and operates the business in the other country but the chain store still has its name, logos, and products, but it sells mostly items that are specific to the needs in that country.

While the overall concept of marketing is the same worldwide, the environment within which the marketing plan is implemented can be drastically different. Common marketing concerns—such as input costs, price, advertising, and distribution—are likely to differ dramatically in another country. As the business owner, I would need the ability to adapt, manage, and coordinate a marketing plan in an unfamiliar and perhaps even unstable foreign environment.

Marketing abroad can spread corporate risk and minimize the impact of undesirable domestic situations. In order to market internationally, the business should have products or a service that are patented marketable abroad. Additionally, the products should have a high earning potential in foreign markets. Secondly, the management of companies marketing internationally must be ready to make a commitment to these markets including a willingness to educate themselves about the countries they choose to enter and must understanding the potential benefits and risks of a decision to market abroad.

As a business owner who is not a native yet operating abroad I would need to understand the culture and develop the proper frame of reference to make decisions. Thus, choices that I could make automatically at home could be dramatically incorrect when operating abroad. Unless special efforts are made to understand the cultural meanings for activities in the foreign market, I could possible misinterpret the events taking place and risk making the wrong decisions. To overcome these potential disastrous decisions, firms must understand the cultural factors existing in both their domestic country and the host country. Business problems and goals must be defined in terms of the host country's culture. Being able to separate home-country norms from those in the host country can be a very challenging task. Often, the influence of one's own culture is underrated.

Although the internet allows the potential to distribute globally, I would still have to ensure that I am offering my clients a product or service that they can utilize. Like I said initially, I consider this an option and would not rule it out in the future but it would have to be after the initial business is established and is growing. I have consider my personal implications and recognize that it is not the choice for me however please read the pros and cons of international marketing below, it might be right for your business.

Advantages of International Marketing

• Faster growth: Firms that have operate internationally tend to develop at a much quicker pace than those operating locally not that this growth can take place faster than you can handle it
• Access to inputs: Operating internationally may enable the firm to source raw materials or labor at lower prices or higher place
• Increased quality and efficiency: Doing business in the international market allows a business to improve the quality of their product in order to gain a competitive advantage.
• New market opportunities: International business presents businesses with new market opportunities. These new markets provide more opportunities for expansion, growth, and income. A bigger market means more customers, increased revenue, a larger profit margin, and allows the business to realize economies of scale. Just be prepared to handle the influx and demand of all customers.

Disadvantages of International Marketing

• Increased costs: There are increased operating expenses including the establishment of facilities abroad, the hiring of additional staff, traveling of personnel, specialized transport networks, information and communication technology.
• Foreign regulations and standards: The business may need to conform to new standards. This may require changes such as in the production process, inputs and packaging, incurring additional costs.
• Delays in payments: International trade may cause delays in payments negatively affecting the firm's cash flow.
• Organizational structure: International business usually requires changes to the firms operating structure. Training/retraining of management may be necessary to facilitate restructuring.