APA Analysis 4

Running head: GLOBAL ENGAGEMENT 1

Global Engagement

Student Name

Embry-Riddle Aeronautical University

Sample Paper for MGMT 335 IB Analysis – Author Note(s) and Key Words are NOT

REQUIRED for these short APA 6th edition papers.

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Abstract

This paper will show the relationship between businesses that seek to expand in the global

community. Selection of key strategies for organizational success depend upon selection of

business partnerships that will expand markets and grow business. Expansion into the

international global community can bring increased value, new customer markets, logistic

support, and connections for both the home and host countries. Many companies seek to expand

through exporting, licensing, franchising, joint ventures or wholly owned subsidies in foreign

countries. This paper will focus on the alliances necessary to support the entry strategy into a

foreign market.

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Global Engagement

The Issue - Business commitment to global operations or support can be key to the

business success or even continued operations. New and existing business must make strategic,

long term, decisions to increase or maintain growth and development of their products and or

services. A product and or service life cycle is based on many factors. Some of these factors

include selecting country relationships, business strategies, and the best strategies to develop low

cost or product differentiation opportunities to expand markets.

The problem – Finding the right product, country, and partner or business associate is

tough. Once a product/service is established and a country is selected the primary objective for

alliance must be decided. The firm’s strategies must also be compatible with a host partner. A

firm must spend the right amount of time investigating, visiting, talking, and collaborating with

potential strategic partners. Once a strategic alliance partner is selected the expectations of each

partner must be maintained. The integrity of the alliance must be a priority for each partner.

Developing expatriate and/or inpatriate manager associations and assignments can cement the

relationship as important and working for each partner. Getting stuck with the wrong partner can

add time, execution complexities, and cost to operations. Managers need to avoid this by

working diligently on this first step. Find the right partner (Taylor, 2015).

How do alliances and strategies meet to form and select the best entry mode and partner

relationships? Identifying the necessary skills and resources is key. Partners can be business and

other investors or business relations with the logistics necessary to buy, store, transport or sell

products that increase revenue above the costs necessary for each operation. Risk assessment and

sharing through partnerships can result in lower cost for required competencies like research and

development (R&D) through a selected partner with relevant experience and skills in R&D.

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Other business relationships can share risk and cost in product engineering, production,

marketing, customer support, finance, and many others areas of business management

(Centrallia, n.d.).

Alternative 1 w/advantages and disadvantages – If business strategy is low cost a

business will look for entry modes and partners that add value to the strategy. Low cost strategy

looks for ways to market a needed product or service at the lowest price possible. The product

must meet customer needs without adding cost that will drive the customer to another similar

product, that meets their expectations, needs, availability, and value at a lower cost. This

alternative will explore Joint Venture (JV) as the entry mode. A JV partner must share the goals

and strategy of the expanding business. International business must be particularly vigilant in

selecting a partner that will share costs and risk without losing control of the product. e-Coach

(n.d.) gives three common causes for JV failure. These failures can be traced to insufficient

vetting of the partner. Clashing cultures, differences in or unclear leadership, and poor

integration can result when partners are not fully clear on the responsibilities of each partner.

When the business undertaking does not share effort and risk common interest can be blurred.

Alternative 2 w/ advantages and disadvantages – If equity investment is not desirable

several entry modes can be considered. Exporting, Licensing, franchising, and contracted

services are some of the alternatives that should be considered. Most firms begin considering IB

involvement by exporting their regular production beyond their domestic market. When

considering exporting your company product to a foreign country a determination of the market

potential must be made. When product differentiation is important the entry mode must support

and protect the uniqueness or superiority of the product. The buyer will be looking for product

quality, special features, or after-sale service in their selection process. These low equity

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investment entry modes can support the strategy. When exporting is selected as the entry mode

particular attention must be given to transportation cost, storage, trade barriers, market entry, and

export agents associated with the strategy. Exporting with a product differentiation strategy can

be an excellent way of getting the feel of IB without committing significant resources.

Recommendation w/ advantages and disadvantages - Our product, country, and

strategy is more compatible with franchising as the mode of entry. Franchising operates with

specific rules, permitting the franchisee to sell our product under our name-brand and proven set

of procedures developed with a detailed marketing strategy. A franchise agreement with a

selected partner company or outlet will provide a percentage of its sales as a royalty. Establishing

a presence in a foreign country with low barriers and laws with a franchise was a priority. We

will overcome some disadvantages of franchising by selecting a master partner joint venture to

oversee franchise locations in the country. The master partner will control our brand and provide

quality control of the product, product marketing, delivery and customer service. This will add

some additional cost to the venture but as additional franchise opportunities open these cost

drivers will turn into sustainable profits for the company.

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References

Centrallia, World Trade Centre’ Winnipeg. (n.d.). 6 Reasons for forming strategic global

business alliances. Retrieved from http://www.centrallia.com/news/6-reasons-for-

forming-strategic-global-business-alliances/

e-Coach. (n.d.) Most common causes of joint venture failure. Retrieved from

http://www.1000ventures.com/business_guide/jv_failure_reasons.html

Taylor, Nicole Fallon. (2015, July 21). Going global: how to expand your business

internationally. Retrieved from http://www.businessnewsdaily.com/8211-expand-

business-internationally.html