Is a process of discussion and integration on the list of people, companies, and government authorities of different nations, a process influenced by international trade and investment and aided by it.
In the world of international business there are several strategic options which often used to measure performance of the business enterprise, but here will be using Ansoff matrix on the four (4) proper options preferable, although each tactical option has its risks involved.
1. 1 Globalization and the rise of multinational businesses and branding
"A further, crucial aspect of globalization is the nature and electricity of multinational corporations. Such companies now take into account over 33 per cent of world result, and 66 % of world trade (Gray 1999: 62). Significantly, something similar to a quarter of world trade occurs within multinational corporations (op. cit). This previous point is well illustrated by the operations of car manufacturers who typically source their components from plant life situated in various countries. However, it is important not to try to escape with the idea that the type of globalization we've been talking about involves multinationals turning, on any large scale, to transnational: International businesses are still largely limited with their home place in terms with their overall business activity; they remain heavily 'nationally embedded' and continue being multinational, alternatively than transnational, firms. " (Hirst and Thompson 1996: 98).
1. 2 Benefit of globalization
Globalization has made the competition rises scheduled to technology, most people has knowledge how to capture customers by bringing out development which increase more benefits to consumers, competition is often good to consumers because of the decreases in the price.
1. 3 Disadvantage of globalization
This is one of the cons of globalization, because to the fact that when different people gathered in a single place can create assault, especially murder and bombing, which is not good for business and then for country and the people.
2. 0 FACTORS CONTRIBUTING TO THE Progress IN GLOBALIZATION
2. 1 The liberalization of international trade
The removal of trade obstacles has been the source of increasing international trade and changes in customers style and preference, there has been more flexibility of importing and exporting the goods / services exchanged in one country to the other, not only that but also trade security methods have been nominal such as tariffs and quotas.
2. 2 Technological progress
Technological advancement in addition has help reduce international obstacles, most likely the utilization of internet facilities has more electricity when it comes to conducting business online, it is rather easy and it can also help to reduce cost of travelling and other fair of exploring.
Nonetheless, not only the internet provide such usage of consumers but there are such facilities which create product recognition for consumers to see and also demand those facilities which prompted globalization including, software of mobile telephones, satellite television communication such as DSTV, global press networks such as BBC, CNN, AL-JAZEERA and VIDEO-CONFERENCING, which really helps to lessen barriers to the business such reducing operating / production cost.
2. 3 Cultural understanding and recognition
This has increased more recognition and tastes to some consumers; for case, in the movie industry there are now more recognition on Hollywood, Bollywood and even Nollywood (Nigerian videos)
3. 0 THE CONSEQUENCES OF GLOBALIZATION ON BUSINESS ACTIVITY
Globalization can not only provide possibility to business but also there are some risks/threats in it.
3. 1 Increasing competition
One of the consequences regarding globalization is increasing competition in business, such as cell phones, in China due to popular of mobile phones they are actually endeavoring to imitate products of other mobile companies like Nokia just wanting to compete with them, and yes within Tanzania, there are extremely high demand regarding Chinese cell phones because of its affordable price.
3. 2 Economies of location
This is one of the positive effects when trying to create more products on location which is a lot more cost effective due to power of producing in economies of size within economies of location, like China is the best location to invest since the productions will tend to be more cheaper, that is, the amount to be paid to one America staff could pay almost ten employees in China, that's the reason as to why depends upon prefers China to be always a production place.
3. 3 Mergers, acquisitions and Joint Projects, franchises
These factors allows business to spread around nations due to the forces joined between one company / country or business just to ensure they grow-up and fasten, for illustration Mc Donald has made a decision to get together by franchising the business enterprise in the world, which is true, has definitely became well known in the business.
4. 0 DESCRIPTION OF THIS FOUR ANSOFF MATRIX MODELS ANALYSIS
"Globalization makes alliances an essential part of a firm's strategy in order to remain competitive also to achieve superior performance. To better record global opportunities, organizations tend to cooperate with other businesses to capitalize on and leverage their limited" resources since it is impossible for just one organization to "do everything and do it alone". In the same way, in order to handle increasing global competitive threats, firms are likely to form alliances. Based on the classical commercial organization perspective-the market vitality, organizations form alliances to reduce competition and uncertainty. Through such assistance, companies gain market electricity that helps alleviate competition and improve its competitive position. "
The decision to enter into a international market can be inspired by globalization that could be determination of the business enterprise people, who are willing to go far just to make sure that they extend their market. There are many ways to enter into a overseas market utilizing the Ansoff matrix as follow:-
4. 1 Market penetration (existing market, existing product)
Market penetration is one of the strategies found in the existing customers just to make certain sales are increasing without pooling the merchandise from the market, nevertheless by using market penetration they might use more activities just to ensure that their existing product established fact about the world, for illustration to begin advertising in multinational countries exactly like Dutch advertises their products such as, yoghurts, hair shampoo, milk and even other products, by advertising even in our country they certainly create such opportunities for penetrating and creating more demand for individuals who did not have an idea about their products.
This strategy not only penetrating the product but also battling to wthhold the existing customer for such product because it isn't very difficult to get customers but keeping those customers is very difficult job thus, there are several strategies in the wonderful world of business one of them is marketing, just to make sure the business established fact.
For case Coca cola company "has been doing some of the broadening alone and some in partnership with others" (Daniels et al, 2008, p. 570) just to make sure the coca-cola brand established fact on earth. The coca cola company has truly gone so far as to test the market in Singapore, Toronto, and even have the coffee shops. Also Coca cola company has joint venture with Nestle for tea products beyond your unites condition and a jv with Cargill to develop a new sweetener to place into beverages" (Daniels et al, 2008, p 571)
4. 2 Market penetration looks for to accomplish four main goals:
"Maintain or raise the market show of current products - this is achieved by a blend of competitive rates strategies, advertising, sales promotion and perhaps more resources focused on personal selling
Secure dominance of growth markets
Restructure a mature market by traveling out competitors; this might require a a lot more aggressive promotional marketing campaign, recognized by a costs strategy made to make the market unattractive for competitors
Increase consumption by existing customers. For instance by introducing commitment techniques" (Mike Morrison, 2011)
4. 3 Market development (new market, existing product)
This is one of the market strategies which require moving the existing product further in international market so as to gain more customers from international market, not only heading across or beyond the borders but also appealing to new customers in the same product to be able to gain more gain and even to increase sales.
New geographical marketplaces; for example exporting the merchandise to a fresh country
New product sizes or presentation: for example
New circulation channels
Different pricing regulations to draw in different customers or create new market segments
Exporting is exemplory case of one of the market entry modes, which use a direct offers, goods can be produced in a country and exported to a overseas countries merely to capture clients with the same products which sold in home country. "Exemplory case of Coca-Cola when came into the Turkish market, it attempted exporting from Turkey to Kyrgyzstan, the result sadly was a soft drink price of more than four times what it cost to buy a soda bottled in Kyrgyzstan itself". (Daniels et al, 2008, p 575)
Product its likely to expand more to the international countries and have more customers than the home country, this is due to the actual fact that in the house country customers could change their taste and preference due to time factor, that could be one of the reason why selling abroad so as not to lose market share, at exactly the same time that unwanted product can be re innovated in order to have customers in the house country, for case, by trying to change packaging of the products, or even change the name.
4. 4 Product development (existing market, new products)
Product has just absent from the fashion
Didn't gratify customers due to flavor and preferences
Globalization issues (Mike Morrison, 2011)
When the product has just go beyond the fashion it was meant like, within our country( Tanzania) there are a few shoes that happen to be in fashion at the moment, it seems that all women use to wear such popular shoes that is because of globalization technology, we can see on Television through DSTV and other fashion Tv.
Nevertheless this fashion retains on changing when time goes by they will change that fashion in the sense that in the existing market and customers with more popular shoes.
Didn't meet customers scheduled to flavour and personal preferences in the sense that customers style and preference retains on changing anticipated to globalization and free trade. Businesspersons can import and export more goods and services depending upon the needs and requirements basing on customers changing preferences to better echo customers demand. For instance, Tanzania has green tea of its own, but at this time there are many brands of tea from other countries with different tastes like lemon, tea and more. Therefore, customers might be drawn to alter from the old brands to the new ones.
The business could do well if there is use of one of entry modes like the coordination between two celebrations, could be two or more people, companies, or even two countries, joint venture can be shaped due to varied rationale like, technology posting and product development, market entry for a certain county, and even in compliance for the country legal actions, for occasion quotas, taxes and tariffs. "For example in case of China, it wholly is the owner of its concentrate place but has joint endeavors with various bottling vegetation, coca cola possession in foreign bottling functions has became sufficiently significant so it has create a bottle investment group within the country. "(Daniels et al, 2008, p 570)
Joint business can be of great for the matrix model for utilizing those four strategies in order to persuaded market expanding, for illustration growing new market to a international countries could diversify income, and even product identification like Mc Donald's burger ruler, is well known all over the world.
Globalization issues, here intended that, since it is very absolve to do international business, the planet has just been just like a village, China can come in Tanzania and work with Tanzanian, also, people between both of these countries can not only conduct business but can also exchange so many things like ideas on what to do business, how they are in their own country, taboos, cuisine, dress code, these can definitely make customers want to experience the differences.
4. 5 Diversification (new product, new market)
This is where the market is totally new, and products to new customers. You will find two types of diversification, specifically related and unrelated diversification. Related diversification means that stay in market or industry with which are familiar. (Mike Morrison, 2011)
"The diversification can be divided again into horizontal, vertical and lateral diversification.
The horizontal diversification is the expansion of the production programs.
The vertical diversification is the sales stage stored by products pre order.
The lateral diversification is the sales of new products, which are within the range of the technology and marketing in no interconnection. " (Mike Morrison, 2011)
Diversification can be an inherently higher risk strategy because the business is moving into markets in which it has little if any experience. For just a business to look at a diversification strategy, it must have a clear idea about what it expects to get from the strategy and a clear and honest examination of the risks
This situation is likely to occur to several situations when moving internationally, diversifying is a good strategy because it help to improve sales insurance firms Strategic SECTIONS (SBU's) because if one product doesn't respond positively on the market other products might perform better, and that can at least reduce failing of the other products because clearly there would be wastage of resources but can be protected to some extent. , or even though business can be diversify by using international access modes to produce brand recognition.
For occasion, franchising That is one of the marketplace entries which assist market widening when need to go international, franchisor allow franchisee to use the name of the business to be able to extend his/ her market talk about, this is great fine due to the fact that one can have higher income for the development of offers by using someone else's name and business formulae,
For instance coca cola company, if franchise with them, they will surely provide formulae, then franchisee will only have to mix with water to have formulae complete. Another example is from Mc Donald's; franchisee should be provided with each and every aspect that may accomplish the meals with the same preference as though were produced by Mc Donald's company, though it is costly.
Not only that but also they could even use licensing to which essential part when heading global, as a way to penetrate into global market, so as to have legal when it comes to utilize property of your licensor, for case intangible property such as patents, brand, and development techniques. The licensee needs to pay charge to the licensor to have the ability to have the approach assistance if possible, there it will be possible for licensee to advertise his/her product by using the matrix model, like reselling more of the merchandise beyond your home country and diversify the profit
Globalization handling the world, the whole world has became such a tiny world, this situation made visitors to know bad and the good due to development of technology, therefore applying Ansoff matrix tools when conducting business is the most more suitable way to do so since it well analyze how professionals should behave when going international.
1. 1 THE ANSOFF MATRIX FIGURE
http://www. mindtools. com/media/Diagrams/AnsoffFig1. gif
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