- Discussion Replies: International Business
You will review your classmates’ initial postings and choose one classmate to complete the
following for your reply:
Write a 250 to 300-word response to your classmate. Your reply must make a recommendation
to your classmate of a peer reviewed journal article that provides additional information on their
topic. In your response, you should give a summary of the article in your own words and discuss
why it is relevant to their forum topic. It must be different than articles they reference in their
forum. Include an APA formatted citation at the bottom of the reply.
James
A company should engage in international business when it has the logistics, understanding and versatility to provide their services or products in many different nations around the world. Companies that can navigate through these areas of focus see tremendous profitability and long-term sustainability. When a business cannot fulfill these requirements, they run the risk of failure. (Shams et al., 2021)
International companies can benefit from a larger customer base than those that are country or regionally based. By increasing their potential clientele list, they can provide their organizations with the versatility to sell in different markets. This benefit can be used as a hedge against national economic crisis or changes in social preference. (Shams et al., 2021) A company must have a strategy that considers production logistics, social intelligence, and an understanding of geopolitics in their desired regions to be successful internationally. (Richter &Hauff, 2022)
Companies such as Disney, McDonald’s, Coca Cola and Walmart experienced exponential gains in international markets when they effectively implemented their international strategies. (Paul & Parra, 2021) Their success can be accredited to the large amounts of resources they committed to for the purposes of planning and production in their international markets. These companies understood that to be successful internationally they needed to be culturally aware so as not to market in a way that could be seen as offensive in their international markets. (Luo, 2020) These organizations also had the benefit of dedicated large production facilities in their international markets to enhance their supply chain and minimize international trade costs. (Paul & Parra, 2021)
Not all organizations can be successful internationally. Companies that do not understand geopolitical tensions find themselves at risk of losing profits due to political sanctions. (Luo, 2020) Recently companies that were in Russia suffered severe losses due to the United Nations sanctions imposed on them during the Ukraine/ Russia conflict. Tariffs that discourage international trade such as the ones that have been imposed on China can carry a significant negative impact to businesses that engage in international commerce. (Richter &Hauff, 2022)
There is enough data to suggest the assertion that if a company has enough resources to properly strategize, they can benefit greatly from international business. When organizations can hedge themselves against potential geopolitical and cultural risk, they can reap the rewards of a diverse customer base on a global scale. (Luo, 2020) Over a significant length of time, companies all over the world have shown that international business can produce great economic and political benefits as long as the businesses properly plan and hedge themselves against risk. (Buckley & Casson, 2021)
Recommendation for Further Research
This area of study would benefit from further research in international business after the Covid 19 pandemic. Businesses across the world experienced great supply chain and geopolitical hurdles. To understand the long term effects of the global pandemic and how businesses adapt or altered their strategies will bring vital information to the value of international business
Sources
Buckley, P. J., & Casson, M. (2021). Thirty Years of International Business Review and International Business Research. International Business Review, 30(2), 101795. DOI: 10.1016/j.ibusrev.2021.101795
Luo, Y. (2020). Adaptive learning in international business. Journal of International Business Studies, 51(9), 1547–1567. DOI: 10.1057/s41267-020-00317-x
Paul, K., & Parra, C. M. (2021). Corporate Social Responsibility in International Business Literature: Results from text data mining of the Journal of International Business Studies. International Journal of Corporate Social Responsibility, 6(1). DOI: 10.1186/s40991-021-00066-6
Richter, N. F., & Hauff, S. (2022). Necessary conditions in international business research–advancing the field with a new perspective on causality and data analysis. Journal of World Business, 57(5), 101310. DOI: 10.1016/j.jwb.2022.101310
Shams, R., Vrontis, D., Belyaeva, Z., Ferraris, A., & Czinkota, M. R. (2021). Strategic agility in international business: A conceptual framework for “agile” multinationals. Journal of International Management, 27(1), 100737. DOI: 10.1016/j.intman.2020.100737
International Business – Introductory Paragraph
The topic of this international business discussion board post is on the different strategies for executing global business in international markets. Three examples of companies that successfully engaged with competitors to compete globally include Caterpillar, L.M. Ericsson, and Honda (Hout et al., 1982). Hout and the authors here point out that while these companies made great contributions within their organizations to be able to compete globally, not every company should strive to do the same. Competing globally requires a tremendous amount of resources, labor, and time to get into. A company has to first ensure that it makes sense for its resources to be invested into a global market rather than a domestic one (Contractor et al., 2019) and assess whether to integrate its products into a physical or digital marketplace, if not both (Autio et al., 2021). Each business described in Hout’s article had a different methodology for achieving their international business goals, with Caterpillar opting for heavy investments into manufacturing to outperform competitors on costs, L.M. Ericsson dropping costs for software through new modular development, and Honda enacting a genius marketing strategy for reaching all parts of the world. Current business strategies also exist that compare and contrast with what these three companies were able to achieve. Below, these current strategies will be outlined and described in order to illustrate why companies may choose to engage in international business.
International Business – Current Trends Paragraph
There are many current strategies that exist for engaging in international business that companies can take advantage of. Strategic agility, also known as the ability to remain flexible in order to handle new developments and innovate ways to create business value, is a common strategy adopted by multinational enterprises (Shams et al., 2020). These multinational enterprises (MNEs) as described by Shams and the authors here include companies like Pepsi, Coca-Cola, BMW, Samsung, etc., since they deliver services to more than one country as an enterprise. In today’s current global environment, companies like this should engage in international business in order to expand their reach, generating higher amounts of revenue, and become a globally recognized brand (Sharma et al., 2020). These companies have been successful in diving into international business, and they accomplished this with some similar strategies to the ones described in Hout’s article above. Strong marketing presence, investments into manufacturing their products, and finding new ways to outprice their competitors has led to success in global markets, which is exactly what Caterpillar, L.M. Ericsson, and Honda did on their entrance into international business (Hout et al., 1982). The one key difference in these companies is that the more recent ones have invested much heavier into the online space with the emergence of digitalization. Digitalization and globalization have played similar roles in expanding company presence worldwide (Autio et al., 2021). Both the companies from Hout’s article and the modern ones mentioned above should be wary of corruption in international markets and judge their risk tolerance accurately (Bahoo et al., 2020). Competing companies in different markets will often do whatever it takes to win over the marketplace in their favor, Bahoo mentions. It is wise for companies just entering a new market internationally to understand when they might want to exit if there endeavors are not successful there.
International Business – Future Research Paragraph
For the future of international business, the trend on the development of technology should be studied on how it impacts newer companies entering foreign markets. Digitalization has already had a revolutionary change on the landscape of business alongside globalization on this front (Autio et al., 2021) and it will be interesting to see what new technology comes about in the next decade to promote these concepts further. Specifically, the authors here present a need to study the technology of 3D printing and on what kind of effect this will have on the manufacturing in businesses in the years to come.
References
Autio, E., Mudambi, R., &Yoo, Y. (2021). Digitalization and globalization in a turbulent world: Centrifugal and centripetal forces. Special Issue: Digitalization and Global Strategy, 11(1), 3-16. https://doi.org/10.1002/gsj.1396
Bahoo, S., Alon, I., & Paltrinieri, A. (2020). Corruption in international business: A review and research agenda. International Business Review, 29(4), 1-24. https://doi.org/10.1016/j.ibusrev.2019.101660
Contractor, F., Foss, N., Kundu, S., & Lahiri, S. (2019). Viewing global strategy through a microfoundations lens. Special Issue: Microfoundations of Global Strategy: Role of Leadership and Manager Characteristics, 9(1), 3-18. https://doi.org/10.1002/gsj.1329
Hout, T., Porter, M., &Rudden, E. (1982). How global companies win out. International Business. https://hbr.org/1982/09/how-global-companies-win-out
Shams, R., Vrontis, D., Belyaeva, Z., Ferraris, A., &Czinkota, M. (2020). Strategic agility in international business: A conceptual framework for “Agile” multinationals. Journal of International Management, 27(1), 1-10. https://doi.org/10.1016/j.intman.2020.100737
Sharma, P., Leung, T. Y., Kingshott, R., Davcik, N., &Cardinali, S. (2020). Managing uncertainty during a global pandemic: An international business perspective. Journal of Business Research, 116(1), 188-192. https://doi.org/10.1016/j.jbusres.2020.05.026
