Relative Merits of The Entry Strategies/ Integrative Global Strategy:
Regarding the entry in any business, it is needed to consider all the relative effects or impacts related to that business, there is the need to consider the global strategies, before entering a new business, however, multinational companies have the environmental factors related to the business or industries that should be considered. Moreover, the points needed to be considered are, exporting, contract manufacturing, licensing, franchising, social environment etc. Exporting can be the main point as the little investment is involved; there can be the critical environments that need to concern before entering the business. Licensing is another important point, as the companies or new businesses need to agree upon the rights of patent so that there could be no issues here after. Franchising, need a permission, as it is a license to a trademark that a new company can use. However, there are the risks, which are also needed to be considering, as the capital or human resources are involved and there could be issues. Contract manufacturing, involve the finish goods that can be related to the quality and the reliability of the products and services, while, doing the contracts there are need to follow all the requirements, necessary for the companies. Consequently, the social environment is needed to consider, of the country, in which the business is going to start (Gillespie & Hennessey, 2015).
The Impact of The Global Internet on Small Businesses:
The small businesses are getting benefits globally because they are improving their internet facilities, the small business comes to know that how they can manage their businesses by giving the online services to the customer, they have understood that consumer satisfactions can be there, regarding the product and services. The important aspects of the online business have been realized, however, the companies are doing direct and indirect advertising, there is the lower cost of the communication services, the potential customers can be easily access through the internet, as only that customer will contact who are interested in the current services. The company image enhances globally because maximum customers can know about the product and they can use the products when the clients needed, can be retained for the long-term, through satisfying them and through communicating with them, the clients can ask about the queries they have in their minds. The customers can also get benefits, the business networks can also expand, there could be the relation with the other companies or the customer worldwide, the company with the small business can grow in the market, if go internationally, through the internet and through providing the better services ion internet. Online sales and transactions also help the business to grow, there are the opportunities for the business, internet facilities are there and the company is serving the customers through the internet (MIT Press, 2016).
Reactive and Proactive Reasons:
Both the reactive and proactive reasons for the companies are done to get the advantages, in the internationals market, however, the companies if want to get benefits internationally, they can use both the approaches or they have the reason. Consequently, both of the reasons are different from each other and have the different consequences, opportunities or weakness, regarding the different point of view. However, the reactive reason is followed if the companies want to grow intentionally, if they want to give challenges in the international market, or if they want to be competitive in the international market. There are the foreign competitors in the market; there are the restrictions on the trades or trades barriers in the international market. The host government may have some rules and regulations that the company has to follow. The companies may start the business in the other companies, in order to satisfy the consumer demands. If we see the proactive point of view, then the company goes internationally, in order to gain the profit, when the companies fail to get the profit on their homeland, or in the country they are working in, then they goes internationally, so the benefits can be there and profit can be increased. However, the competition in the home, also improved and the companies get more benefits at their home and internationally, as they expected (Deresky & Christopher, 2011).
You may also study:
- Deresky, H., & Christopher, E. (2011). International Management: Managing Cultural Diversity. Pearson Higher Education AU.
- Gillespie, K., & Hennessey, H. D. (2015). Global Marketing. Routledge.
- MIT Press. (2016). Global E-commerce Strategies for Small Businesses. MIT Press.