Global Business Strategy
1. The Situation
The forces of globalization are generally credited with the major role played in increasing the access of organizations to countless resources. Due to market liberalization for instance, large corporations are able to import cheap resources from various global regions and as such patronize the market through price leadership strategies. Nevertheless, another crucial characteristic of globalization is that it allows economic agents an incremental access to larger customer markets. This virtually means that manufacturers get to sell their products to numerous global regions and exponentially increase their revenues.
Miana Fashion is one of the companies currently looking to expand its business outside the United States and as such benefit from the advantages offered by globalization. The company has been present within the American industry for just over ten years. Throughout this period, it has succeeded in forming a loyal customer base, satisfied with the high quality of the products and the competitive prices, as well as by the reputable polite sales staff that meet customers in each of the company’s five stores. Today, the organization’s sales levels have decreased as a result of the economic crisis, which has reduced customers’ purchasing power. Nevertheless, the organization possesses sufficient financial resources and considers this slow period as the most beneficial one to engage in growth strategies. The managerial team at Miana Fashion has identified two desirable locations onto which to expand the business – China and France. Each of these prospective locations is characterized by unique features which could determine either the success or the failure of Miana’s international growth endeavors. The aim of this report then is that of conducting an analysis of the European and Asian countries in order to identify their compatibility with Miana’s desires. 2. Necessary Business Structure
In order for Miana’s penetration of the two foreign markets to stand increased chances of success, it is required that the two foreign locations reveal as few barriers as possible. For instance, it is desirable for them to implement legislations that do not impede the efficient operational activities of foreign investors. Examples in this sense include a lack of financial barriers in the meaning that foreign investors are not obliged to pay excessive import duties when entering items within the destination country; it would also be desirable for any restrictions on commercial transactions to be lifted.
Secondly, a general state of stability is required and this refers primarily to the economic and political climate. A favorable economic climate translates in an enhanced ability for the citizens to purchase various products, including those sold by Miana Fashion. Third, it is of the utmost importance for the destination countries to reveal strong and reliable infrastructures. This necessity is understood in terms of road ways, airports, waterways and other transportation facilities which allow the American company to transport its merchandise from one location to the other. It is also important for the countries to reveal strong technological infrastructures, which allow the Miana leaders to efficiently communicate.
While the list of business necessities could go on for pages, the last element to be hereby presented is that of the existence for a real demand of Miana’s products. Otherwise put, China and France need to possess customer markets interested and able to purchase the company’s items. It is imperative for both conditions to be met – interested individuals revealing no ability to purchase the items are not viable prospective customers, nor are the ones who reveal a financial ability to buy the items, but have no real interest to do so. 3. The External Environment
China and France are both strong international players, whose environments have been constructed on...
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