Business opportunities for countries, if exploited, can assist in the growth and stability of the economy. Markets could be local or global: at both levels, they offer competition that business organizations need to take into notice. Successful business organizations offer products and services that meet the needs of the customers. Other issues that are important in the product service market include customer services and marketing strategies among others (Boone & Kurtz, 2014). Since both local and global markets are dynamic, it is important that business organizations are aware of the trends and the customer requirements that are constantly evolving. Other important issues in becoming relevant in the market include the observation of changing economic conditions and new fashion (Bakhtiari, Murthi, & Steffes, 2013). It is important to study business opportunities and challenges in both local and global markets because the challenges faced are different at the two levels.
The issue of globalization makes the network of business organizations become complex. Hence, the need to do the fundamental analysis for better understanding of the three major categories. Murphy (2018) states the three categories of businesses as domestic, international and global. In the everyday management of the affairs of a company, the scale of operation, or the category of the business becomes important in decision-making and in enhancing the ability of the business to compete effectively within its level (Murphy, 2018). Local businesses applying international strategies in marketing may fail in competing effectively at its local level. That is because the local market environment is different from the international and global business market levels.
According to Ramamurti (2012), domestic firms or business organizations operate and compete completely within the country. However, they may import raw materials or other products from other countries. Such business organizations may also export some of their products to other countries. Even if the domestic business organizations operate across the border, they constitute a very small share of the entire business activity (Sayaka, 2016). The security laws of the individual countries govern domestic companies. The international business organizations or firms have their headquarters in the home countries but manage significant investments in foreign countries. For that reason, the international firms have diverse profit centers. The laws of their host countries govern the international business organizations with investments in other countries (Bakhtiari, Murthi, & Steffes, 2013). That means the countries where the international business organizations do their businesses do not have control over the laws that govern such businesses. This feature is distinctive of the international business organization that makes it different from a global business organization. What may be common in all the international business organizations is the accounting structures, which are determined by the IFRS (International Financial Reporting Standards).
In case of any differences in governance or accounting between foreign international business, companies must be disclosed in reports by the parent company (Ramamurti, 2012). The global business organizations, on the other hand, have significant profit centers and investments in various countries with no specific dominant canter that may be called its headquarters. Global business usually has people from various countries managing the affairs; in that case, it is not associated with any specific country as its host country. According to Ramamurti (2012), the laws of the official domicile of the parent organization usually determine governance rules for global business organizations. The global business organizations may use Generally Accepted Accounting Principles (GAAP) to create their financial statements; however, IFRS is the most associated with the financial statements of global business organizations.
The research was conducted by reviewing the literature on other research conducted by scholars on the topic of discussion or other topics relevant to it. The study involved the use of coursework, other books from the school library as well as online libraries. The resources used contain data presented and discussed based on survey, experimentation, and review of the literature. The study was conducted in a week, within which sources were chosen, data retrieved from them and the research paper written.
The results obtainable in this section were taken from secondary sources to help present the research interventions by other scholars in understanding the business opportunities for local, international, and global businesses.
Diagram 1: Foreign Market Selection Factors
As presented in the graph above, various factors need to be considered by any company that seeks to venture into the competitive global market. The factors presented in the graph above are country-specific, and the data is a representation of the opinions of the public sort through a survey. The factors are presented according to their degree of influence in the global business.
Diagram 2: Industry-specific Factors to be considered in Market Selection
The figure above also presents data on the company-specific factors that need to be considered by any company that wants to grow and makes a profit in the competitive markets both at the local and global levels. The graph presents rivalry, profit, licensing and demand as the factors that influence the growth and survival of businesses in a competitive market. From the graph, demand is the most important fact, then profit rates second. In as much as licensing is not as important as profit and demand, it is consistently suggested as an important matter both at the local and global markets.
Diagram 3: Global Business Model
The model presented above is a summary of factors that make businesses relevant in the competitive local and global markets. The model suggests that market analysis and the identification of a company's resources are preliminary steps taken to ensure favorable competition for a business in the local and global markets. Other factors of importance include the company objectives that influence the product and services that the company can offer to the market.
Diagram 4: The Role of Customer Satisfaction in a Competitive Market
The graph in the diagram above presents a practical example of success in achieving customer satisfaction in a competitive market. From the diagram, Netflix beats competition among other competing companies by achieving customer satisfaction. Some of the factors that help achieve customer satisfaction include understanding the customers, their demands, and spending power.
Diagram 5: Local Businesses Competition Strategies
The image above presents some of the most important strategies that local companies can use to help them compete favorably against the international companies in a competitive market. The strategies include the use of home field advantages, transfer of expertise to foreign markets, command on a global level, and shifting to new business models.
Companies that need to succeed in the local market need to understand their customers, maintain positive customer-client relationships, adopt new technologies in production, invest in customer care services, and identify the competitors. To understand the customers, local companies should first identify the regions where their customers live (Boone & Kurtz, 2014). This is important, as it will help them understand the social, economic, and technical issues that can affect the relationship between the company and the clients (Sayaka, 2016). Understanding the local culture of the customers is important in knowing the products acceptable in their culture and how the business can be shaped to be in line with such cultural requirements. It is also important that local companies follow the local trends and modify their goods and services to provide for the trends at the local level.
Competition in the local market majorly revolves around the individual buyers who are the most important targets in the competition (Sayaka, 2016). First, it is necessary to know what the target customers buy, that way a company prevents the eventuality of investing in a product that is not preferred or not consumable by local people. Understanding how people buy is also important in deciding whether it is advisable to sell online or in the physical marketplaces (Boone & Kurtz, 2014). Understanding the financial power of the target customers in the local market is another important aspect of competition as it helps the company set manageable prices for the goods and services offered. Understanding what the customers expect and what might entice them to buy makes a company have an advantage over the competing companies.
Competition among local companies can be achieved if the government regulations on local trade give all companies fair chances in the market. It is important that a company achieve stability in order to impress the customers to depend on its goods and services. Stable companies are consistent on the provision of products and services to the customers (Shi, Gerding, Vytelingum, & Jennings, 2012). Companies that show instability in terms of inconsistency in the number of products they present in the market attract fewer customers. Giving after-sales services that are attractive to the customers can make the customers prefer the goods and services from a company even if they are provided a little bit more expensively as compared to the other competing companies (Sayaka, 2016). Companies that invest in customer care services stand a chance of understanding the needs of the customers, thereby becoming more relevant to their target customers in terms of service provision and the provision of the required products.
The export strategy can be achieved by majoring in the use of resources in the home country to produce products and services for the foreign market. One important advantage of this strategy is that the companies involved maintain their control of the quality and the operations without having to incur the costs of investing in facilities abroad. When a company is in control of the resources used, it gets a chance of getting favorable prices in the world market; it can also regulate the use of the resources to help in the realization of maximum achievable profits (Shi et al., 2012). Export of raw materials is another important advantage that a country can take, especially if the product to be exported is unique to just a few countries and the demand is high. When countries with such advantages major on the export strategy then they can control the world market and remain relevant in the trade. Besides, the country stands to gain from the economy of scales and experience curve, especially when all products are kept in one country (Ramamurti, 2012). However, one disadvantage of the export strategy is that the cost of the raw materials used may be more expensive in the home country or locally that it is abroad. In that case, the country can easily be outpriced by other competing countries.
A licensed foreign firm gets the rights to produce the licensed products as well as take advantage of technical information, as long as it is in the scope of the agreements bound by the license. Many companies have used licensing strategy to facilitate their trade in the foreign countries without being stopped. The strategy has advantages and disadvantages that need to be considered before using it as a facilitator of fair competition in the world market (Ramamurt...
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