Evaluate the potential problems faced by businesses that trade internationally when entering new markets. Consider the issues that Disneyland, Tesco and other businesses face when expanding and entering new markets around the world. Here are some topics for which you could discuss problems: Finance – Huge investment needed in new country of operation. – Possible efficiency cuts in other areas of the business. – No guarantee the new market will have the success predicted. Human Resources – Getting hold of people with the right skills. Might have to ask existing workers to move out to the new country. – Dealing with laws in new country. Customer Service – Requires staff training. – Will have to adapt to the expectations of the new country. – Expensive and time consuming. Logistics/Transport – Will the transport network of the new country be sufficient? – Developing countries may not be able to support the systems a business is used to. – Will the cost outweigh the benefit? Marketing – Restrictions placed on marketing by some countries.
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– Cost of marketing. – Understanding the way people respond to marketing in different cultures.
After identifying each problem you should then write for each one: “However a business can deal with this by…” Once a range of problems have been discussed with potential solutions you should write a conclusion that gives an overall opinion on the advantages and disadvantages of a business entering new markets internationally. D2 Evaluate the impact of cultural differences on international business performance in the international market. Key term: Business performance is to do with business success. Is it making a profit? Are costs low? Is revenue high? Is their market share growing? Section One
In this section you will argue different cultures can affect business performance. Give examples of where culture effects a business. You will need to compare three very different countries that Disneyland does or could operate in. How does the culture of country X affect business performance? How does the culture of country Y affect business performance? How does the culture of country Z affect business performance? After each point made use a phrase such to show evaluation such as: “However a business can deal with this by…” “This only matters to an extent because…” “In my opinion the business will have to…” Section Two
In this section you will argue due to globalisation that the local culture does not always affect local culture. Arguments to make could include: – The Disney brand is very well known across the world. – Use examples of success: The Coca-Cola brand is very well known across the world. – Most large businesses deal in English as it is the most widely spoken language. – Global culture is becoming more and more similar over time. – Transport links and increased communications are making the world a smaller place. Section Three Write a conclusion summarising the key points. Use your own opinion to evaluate and make judgements. [pic]