lnLernaLlonal LnLrepreneurshlp

CpporLunlLles
8y 8aul Suvera
eflnlLlon
Meanlng of lnLernaLlonal LnLrepreneurshlp
Accordlng Lo Zahra lnLernaLlonal
enLrepreneurshlp ls Lhe sLudy of Lhe naLure
and consequences of a flrm's rlskLaklng
behavlor as lL venLures lnLo lnLernaLlonal
markeLs"
-aLure of lnLernaLlonal
LnLrepreneurshlp
lnLernaLlonal enLrepreneurshlp ls dolng buslness
across Lhe naLlonal boundarles 1he acLlvlLles
LhaL are necessary Lo saLlsfy Lhe cusLomers
LhaL an enLrepreneur LargeLs across oLher
counLrles 8lnvolves exporLlng goods and
servlces openlng sales offlces subsldlarles
manufacLurlng or [olnL venLures and
developmenL of buslness
lL ls shown ln Lhe flgure ahead
W lnvolvemenL of Lwo counLrles
W Language dlfference
W CovernmenL lnLervenLlon
W Many bases
W ComparaLlve more rlsk
W aymenL ln forelgn currency
lmporLance of lnLernaLlonal 8uslness
Lo Lhe llrm
1he successful enLrepreneur wlll be someone who fully undersLands
how lnLernaLlonal buslness dlffers from purely domesLlc buslness
and ln able Lo respond accordlngly An enLrepreneur enLerlng Lhe
lnLernaLlonal markeL can have beneflLs ln Lhe areas as follows
W Superlor Lechnlcal knowhow
W Lower lnpuL cosLs due Lo large slze
W AblllLy Lo shlfL producLlon overseas
W 8rand lmage and goodwlll advanLages
W lnformaLlon advanLage
W Large slze and economles of scale
W AblllLy Lo access raw maLerlals overseas
W Access Lo low cosL flnanclng
W Managerlal experlence and experLlse
W lverslflcaLlon of rlsks
lnLernaLlonal vs omesLlc
LnLrepreneurshlp
AlLhough lnLernaLlonal and domesLlc enLrepreneurs allke are
concerned wlLh sales cosLs and proflLs whaL dlfferenLlaLes
domesLlc from lnLernaLlonal enLrepreneurshlp ls Lhe
varlaLlon ln Lhe relaLlve lmporLance of Lhe facLors affecLlng
each declslon
W Lconomlc
W CulLural envlronmenL
W lncenLlves and barrlers of lnLernaLlonal buslness
W LnLrepreneurlal culLure
W ollLlcallegal envlronmenL
W 1echnologlcal envlronmenL
W CovernmenL conLrols and barrlers
SLages of economlc developmenL
A naLlons compeLlLlveness can be deflned as a
naLlons relaLlve compeLlLlve poslLlon ln Lhe
lnLernaLlonal markeL among Lhe naLlons of a
slmllar economlc developmenL
1he followlng are Lhe sLages of economlc
developmenL
W Less developed sLage
W eveloplng sLage
W Semldeveloped sLage
W eveloped sLage
W ln Lhe lnlLlal sLage ls Lhe less developed counLry whlch
ls Lhe pooresL counLry and Lhe poLenLlal for growLh ls
also Lhe lowesL
W 1he nexL sLage ls developlng counLry whlch ls dynamlc
lndusLrlallzlng and movlng forward ln Lerms of boLh
quanLlLy and quallLy of developmenL
W A furLher advanced sLage ls Semleveloped counLry
whlch ls no longer poor and has a greaL poLenLlal for
quallLy ln Lhe furLher developmenL
W Powever lL ls approprlaLe Lo call Lhem semldeveloped
counLrles because Lhey are noL poor and Lhey are
dlfferenL from developlng counLrles
W 1he flnal sLage ls Lhe developed counLry whlch has hlgh
achlevemenLs ln boLh quallLy and quanLlLy of
developmenL
Deve|opment stages and the sources of |nternat|ona| compet|t|veness
Less developed
sLage
eveloplng
sLage
Seml
developed
sLage
eveloped
sLage
hyslcal facLor -aLural
resources
8aslc
lnfrasLrucLure
ClusLerlng Advanced
lnfrasLrucLure
Puman facLor -onLralned
workers
1ralned
workers
LnLrepreneurs rofesslonals
CovernmenL lnbound ll
opendoor
LxporLlng
learnlng
CuLbound ll
S1 lndusLry
WorldClass
lalr 8lsL
Lxamples 8angladesh
nepal
lndla malaysla
Lhalland
Slngapore
hongkong
korea
!apan
LnLrepreneurshlp enLry lnLo
lnLernaLlonal buslness
1he meLhod of enLry lnLo a markeL and Lhe
mode of operaLlng overseas and dependenL
on Lhe goals of Lhe enLrepreneur and Lhe
company's sLrengLhs ad weakness 1he modes
of enLerlng ln lnLernaLlonal buslness can be
dlvlded lnLo Lhe caLegorles shown below
W LxporLlng
W -onequlLy arrangemenLs
W lrecL forelgn lnvesLmenLs
explanaLlon
LxporLlng
lL ls Lhe mosL LradlLlonal mode of enLerlng Lhe forelgn
markeL LxporLlng ls LhaL whlch allows manufacLurlng
operaLlons Lo be concenLraLed ln a slngle locaLlon
whlch may lead Lo scale economles
Many companles ln a varleLy of lndusLrles have concluded
LhaL concenLraLed manufacLurlng operaLlons glve Lhem
cosL and quallLy advanLages over Lhe alLernaLlve of
decenLrallzed manufacLurlng
lorms of exporLlng
W lndlrecL exporLlng
W lrecL exporLlng
-onequlLy arrangemenLs
1 Llcenslng an enLrepreneur granLs rlghLs Lo lnLanglble
properLy Lo anoLher company for a speclfled perlod ln
exchange Lhe llcensee ordlnarlly pays a royalLy Lo Lhe
llcensor
2 1urnkey pro[ecLs Lhe underdeveloped or lessdeveloped
counLrles of Lhe world have recognlzed Lhelr need for
manufacLurlng Lechnology and lnfrasLrucLure and yeL do
noL wanL Lo Lurn over subsLanLlal porLlons of Lhelr
economy Lo Lhe forelgn ownershlp
3 ManagemenL conLracLs an enLrepreneur who markeLs
and sells producLs lnLo lnLernaLlonal markeLs mlghL
arrange for local manufacLurer Lo produce Lhe producL for
Lhem under conLracLl
lrecL forelgn lnvesLmenL
W Assembly operaLlons assembly means Lhe flLLlng or [olnlng LogeLher of fabrlcaLed
componenLs ln Lhls sLraLegy parLs or componenLs are produced ln varlous
counLrles ln order Lo galn each counLrys comparaLlve advanLage
W Whollyowned subsldlary Lhls lndlcaLes LhaL all of Lhe ouLsLandlng common sLock
LhaL ls currenLly lssued by Lhe company ls ln Lhe hands of a slngle holdlng
company
W !olnL venLures lL occur when a company decldes LhaL shared ownershlp of a
speclally seL up new company for markeLlng and/or manufacLurlng ls Lhe mosL
approprlaLe meLhod of explolLlng a buslness opporLunlLy
W Mergers mergers and acqulslLlons refer Lo Lhe aspecL of corporaLe sLraLegy
corporaLe flnance and managemenL deallng wlLh Lhe buylng selllng and comblnlng
of dlfferenL companles LhaL can ald flnance or help a growlng company ln a glven
lndusLry grow rapldly wlLhouL havlng Lo creaLe anoLher buslness enLlLy
W SLraLeglc Alllances lL ls a buslness relaLlonshlp esLabllshed by Lwo or more
companles Lo cooperaLe ouL of muLual need and Lo share rlsk ln achlevlng a
common ob[ecLlve
W LnLrepreneurlal parLnerlng one of Lhe besL meLhod ls Lo parLner wlLh an
enLrepreneur ln anoLher counLry as Lhey know Lhe counLry and culLure
8arrlers Lo lnLernaLlonal 1rade
All buslnesses encounLer barrlers ln Lhelr operaLlons
wheLher Lhey sell only Lo local cusLomers or Lrade ln
lnLernaLlonal markeLs 8esldes complylng wlLh a varleLy
of laws and exchanglng currencles lnLernaLlonal
companles may also have Lo reformulaLe Lhelr producLs
Lo accommodaLe dlfferenL LasLes ln new locaLlons
AddlLlon Lo soclal and culLural dlfferences companles
engaged ln lnLernaLlonal buslness face economlc
barrlers as well as legal and pollLlcal ones 1o
successfully compeLe ln global markeLs companles and
Lhelr managers musL undersLand noL only how Lhese
barrlers affecL lnLernaLlonal Lrade buL also Lo overcome
Lhem
Soclal and CulLural lfferences
1he soclal and culLural dlfferences among naLlons range from language
and cusLoms Lo educaLlonal background and rellglous holldays
SenslLlvlLy Lo such elemenLs as local aLLlLudes forms of address
and expecLaLlons regardlng dress body language and Llmellness
also helps Lhem Lo wln cusLomers and achleve Lhelr buslness
ob[ecLlves
1 Language Lngllsh ls Lhe second mosL wldely spoken language ln
Lhe world followed by hlndl spanlsh russla and arablc
undersLandlng a buslness colleagues prlmary language may prove
Lo be Lhe dlfference beLween closlng an lnLernaLlonal buslness
LransacLlon and loslng Lhe sale Lo someone else
2 values and 8ellglous ALLlLudes Lven Loday world ls shrlnklng ln
many ways people ln dlfferenL counLrles do noL necessarlly share
values or rellglous aLLlLudes lor example marked dlfferences
remaln ln workers aLLlLude from counLryLocounLry
Lconomlc 8arrlers
8uslness opporLunlLles are flourlshlng ln densely populaLed counLrles
such as Chlna and lndla as local consumers eagerly buy WesLern
producLs AlLhough such prospecLs mlghL LempL Amerlcan flrms
managers musL flrsL conslder Lhe economlc facLors lnvolved ln dolng
buslness ln Lhese markeLs
1 lnfrasLrucLure Along wlLh oLher economlc measures buslnesses
should conslder a counLry's lnfrasLrucLure lnfrasLrucLure refers Lo
baslc sysLems of communlcaLlon(LelecommunlcaLlons Lelevlslon
radlo and prlnL medla) LransporLaLlon (roads and hlghways
rallroads and alrporLs) and energy faclllLles (power planL and gas
and elecLrlc uLlllLles) 1he lnLerneL can also be consldered aparL of
lnfrasLrucLure
2 Currency converslon and ShlfLs esplLe growlng slmllarlLles ln
lnfrasLrucLure buslnesses crosslng naLlonal borders encounLer
baslc economlc dlfferences naLlonal currencles
ollLlcal and Legal 8arrlers
Llke soclal culLural and economlc barrlers legal and
pollLlcal dlfferences ln hosL counLrles can pose barrlers
Lo lnLernaLlonal Lrade CovernmenL overslghL of
lnLerneL use ln Chlna ls so sLrlcL LhaL Lhe CenLral
ropaganda eparLmenL employs 30000 people Lo
monlLor elecLronlc communlcaLlons Such acLlons pose
LhreaLs Lo Lhose conslderlng dolng buslness Lhere
When lnLernaLlonal Lrade ls concerned lL ls meanL Lhe
exchange of goods and/or servlces 1hls exchange
usually Lakes place beLween Lwo parLles from dlfferenL
counLrles or beLween Lwo counLrles locaLed anywhere
on Lhe globe
1wo Lypes of 8arrlers
1arlff 8arrlers and -on1arlff 8arrlers
1arlff 8arrlers lnclude
W lrecLlon lmporL and exporL Larlffs
W urpose proLecLlve and revenue Larlffs
W LengLh Larlff surcharge vs counLervalllng duLy
W 8aLes speclflc ad valorem and comblned
-onLarlff 8arrlers lnclude
W Subsldles
W lmporL quoLas
W volunLary exporL resLralnLs
W AdmlnlsLraLlve pollcy
W AnLldumplng pollcy
W Local conLenL requlremenL
W CusLoms valuaLlon
W SLandards
W 8eclprocal requlremenLs
Lhank ?ou