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Running an international business is a dream that many entrepreneurs have today. This is an ultimate mark, which many people strive to attain as the highest point of entrepreneurship in the business circles. However, many people have started their businesses and have stagnated at the same starting point for a long time. Growing a business still remains the plan for small businesses, however, the challenges of obtaining the dream of international company still hold on as a key stumbling block to success in business. Moreover, there are multiple international businesses, which are continually flourishing at the global level.
There are many industries, which have managed to grow up significantly from their grassroots. Such industries have certain principles established to develop these businesses. It is paramount to note that there are the various business trends in the market that contribute to the growth of these business industries to the international level (Abrams, Abrams, & Kleiner 2003, p.75). Some aspects are fundamental in succeeding in the businesses. In this context, it is imperative to look at a few facts that are essential in making the foundation of a business that takes it to the international stand (Pride, Hughes, & Kapoor 2012, p.92). While some people watch their steps to growing their businesses to the international level working out every step, others are not keen enough to ensure the success of these businesses.
It is paramount to realize that competition is an aspect that automatically comes up in business. The more the business grows, the more challenges the business is likely to encounter. This means that the challenges at the international level are not the same as those in the local market. It is, thus, beneficial to brace oneself before engaging in business at the international level (Kumar 2010). Entrepreneurs have to ensure that they stir up their gifts for bigger challenges in order to grow.
Difference between the International and Local Business
The international circle is a key to success in economic growth. This level involves interaction with business participants from various countries across the globe. A level calls for adequate access to other global markets and interactions with other people in the same business domain and at the same level. While local businesses wholly depend on a single market, the international circle has the advantage of working on several markets added to the local markets (Aswathappa 2005, p.10).
The beauty of expanding a business to the international level is primary developing a wide clientele and increasing the revenue in any business. This is predominantly by having the inclusion of diverse cultures and trends that improve the products in the markets. Industries that make it on the international level, thus, have a grand opportunity of enhancing such chances of developing (Dlabay, Scott & Scott 2010, p.9). However, the companies that are below average often have difficulties in getting to such success, due to the lack of strategy of poor management, as the leading causes to business stagnation and failure. It is particularly sad to have such businesses in the market, yet they have the potential of growing to the global platform.
Factors that Contribute to the Business Growth to the International Level
i) Limited Resources and Capital
While the one person is likely to step forward, the other is likely to fail due to lack of motivation. It is imperative to understand that the growth of any aspect in the business requires a prepared person for the same situation. Unfortunately, many people today engage in businesses without adequate preparation. Consequently, a person begins to run a business with no plan about the future (Kumar 2010). For instance, it is crucial to know that success in business relies on enough capital that will support the business through its primary phase.
The first phase of any business is likely to have challenges that may affect the overall financial state of the business. In many cases, one may be required to ensure enough money is available to supply the business throughout this phase. In case of an industry, it is imperative to realize that management of the company may be required to ensure that it has sufficient supplies to cater for continual production of products, enough to manage the demand in the market. In so doing, management will be creating a significant impact in the market and ensuring that the company is receiving returns. However, in most cases, industries and young businesses begin without a small plan of serving one day at a time. As a result, such industries produce to a limited capacity, thus, bringing in revenue in limited quantities. Moreover, a way of growing such a business becomes a remarkable challenge.
ii) Lack of Market Plan
Often, industries sprout with a certain plan mainly to produce and supply the product to the nearby community. In other cases, management may consider other bordering communities or neighboring countries as their immediate customers. Such a plan is likely to produce results limited to the number of people who like those products. As opposed to such a shallow plan, it is critical to choose market and target customers. Local companies and industries are often likely to follow the plan of another company that may have succeeded in a certain domain to its own market. According to Brutto (2010), companies and businesses must ensure that they plan diligently for their market entrance.
Before running a business, management needs to analyze the demand in the market. This indicates how well or badly the product will be sold on release to the market. For instance, in the market where there are many men, it is not wise to establish the business that produces female products. In doing so, the products may take longer to sale than in a market with many women. However, most of the industries nowadays base their knowledge on the assumption that the products will move while following the secondary sources. As a matter of fact, a company that is likely to grow to the international standard may consider a market and clients that will use the products and influence a wider community to try with immediate effect.
iii) Links and Connections
In the same capacity, it is paramount that a person having an industry or a business headed for international level considers connections. These form the basis of having the ability to spread out the ready products. Most local businesses make business connections only with neighboring businesses. This means that all industries in that area are focusing on one client in the market. As a result, this often leads to stagnation of the business. On the one hand, an industry in this state is likely to limit its production due to the lack of demand for the products. On the other hand, an established and connected industry has multiple of links in the out court. Brutto (2010) points out that it is imperative to ensure that one takes time to know the other audience expected in the wider market. These may be distributors of other businesses with other products in the same domain. Such fact can play a leading role in marketing and distributing the same products in a parallel manner, thus, expanding its border of supply and demand. Consequently, such an industry is likely to grow to the international platform (Ronkainen, & Czinkota 2007, p.18). Neelankavil & Rai (2007, p.276) support the idea that the market entrance plays a key role in its reception to the international market. The example highlights the way the Japanese automobile industry joined the American market in 1960.
iv) Name of the Industry
The name of any industry, company or business marks its primary source that influences its target market immediately. It is necessary to understand that the target consumers in any market look out for attractive names that are often relevant to the product. In many cases, consumers may have an easy time grasping the name that is close to the product on sale. In this context, the name of one’s products must speak to the audience as expected of them, so as to respond to the same. Local industries have a tendency of picking on native words and names that may not be clear to the wider community. This is as opposed to the international industries that ensure that their brands are speaking to the clients at the international platform. This relies on acceptance that one has to communicate using the most formal language in business. In the same way, it applies to speaking to business partners, distributors and suppliers.
v) Choose Your Target Customer
The target customers are a primary factor in any industry. At the on start of the company, it is mandatory for a person to consider potential clientele for the products to come in the near or later future. According to Neelankavil & Rai (2009, p.276), choosing potential clients is critical at all times. This goes hand in hand with the products that one intends to supply. Having a target audience with a strong potential is beneficial. As mentioned above, this ensures that the industry is running and continually producing products, as there will be a continuous supply to the expectant consumers.
vi) How to Reach the Target Audience
Once management has understood the demand of the customer, as it relates to the industry’s products, it is fundamental to devise the correct means of reaching the product to the customer. Local industries are likely to be oblivious of such thoughts. This means that the industry has to have a consistent plan and strategy of how it will provide the customers with the products. Lack of a strategy of distributing the products to the retail market is a significant omission that is likely to slow down the supplies (Kumar 2010, p.112). As opposed to international industries, management will often have an outstanding plan to reach its audience. Such a plan must be exceptional in order to overcome competitors in the same domain, bearing in mind that all other industries are still supplying their products (Cliffon 2004, p.71).
Often, industries at the local set up produce products that target a limited category of consumers. This is often influences the people in the immediate surroundings. The local industries are likely to embrace the people within their vicinity. On the contrary, the wider market has more clients and other customers that can buy the products. In this context, local industries may end up with unsuitable products to some people. Such an industry already has a limit to a certain capacity, defined by the products manufactured. Products with a significant growth to the global platform often embrace other cultures and traditions. This means that the industry produces goods, which are universal. Therefore, a large number of consumers can buy the product, as opposed to local products fitting some people only. For instance, there are certain foodstuffs just fit for a certain culture in the country, yet the majority can buy other ones in the global community.
viii) Poor Workmanship
Notably, in the third world countries, many industries employ people without the required expertise to work in the industrial sectors. Training these nonprofessionals gives basic knowledge on the manufactured products. In the end, the products lack utter knowledge or understanding in production. The outcome of such a product is poor and a product cannot be sold on the foreign market. However, international industries spend a lot of money paying to experts that work out the products to perfection, which, in the end, can be sold profitably due to the high standard and quality of the product (Srikant_mh 2010). This aspect goes in line with the poor governorship in the developing countries. Most industries in these countries do not follow the necessary regulations as required by its government. For instance, such industries may not follow all the environmental laws as expected. Once a problem happens, then the industry runs a considerable loss, as they try to cover up the mistakes, such as paying fines or bribes. Similarly, such a company limits its chances of growing, as its finances fall within its budget. Bowen, Morara, and Mureithi (2009, p.19), highlight the real situation in Kenya, where small micro-enterprises do not exist for more than a year before collapsing. Such are the industries that require strong and reliable strategies.