Individual Reflective Essay Writing Assignment
Many firms motivated by the prospects of what an international expansion may bring or
having faced revenue struggles in their home markets decide to expand into new territories.
Even experienced companies face challenges during internationalisation and ultimately not
all new international ventures are successful.
Some companies fail and withdraw from new markets in spite of overall high levels of
international experience, large sums of money invested in the internationalisation process
or favourable economic conditions surrounding the decision to enter a new market.
Using an example of McDonald’s expansion into the Bolivian market discuss the challenges
companies may face when entering new markets. Reflect upon and analyse potential issues
that may emerge throughout the stages of internationalisation process and assess their
potential impact. Provide examples to support your argument. Appropriate use of a
minimum of eight academic references (alongside other, non-academic references) is
expected for this essay.
Please note that the case of McDonald’s failure in Bolivia should be used only as a
background for discussion. You must not excessively describe the case but rather use it as a
foundation for analysis and reflection on potential challenges in other contexts.
Note: References and appendices are excluded from the word count.
Module Learning Outcomes:
In this assessment the following learning outcomes will be covered:
You should be able to demonstrate your knowledge and understanding of:
• developments in the international business environment and trends in the strategies of companies in the context of internationalisation and globalisation
• the nature and process of international marketing strategy formulation
• the boundaries of international marketing strategy that impact decisions and influence the market scope and competitive advantage of a firm
• the theory, principles and practical challenges of international market selection and entry decisions
• the issues facing marketers in the allocation and customisation of marketing resources when operating in different geographic markets.
Essential reading
Global marketing by Svend Hollensen 2017 ;
International marketing strategy: analysis, development and implementation
Book by Isobel Doole; Robin Lowe; Alexandra J. Kenyon; Cengage Learning (Firm) 2016;
Global marketing management: changes, new challenges, and strategies
Book by Kiefer Lee; S. Carter 2012;
Business Expansion and Internationalization Process
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Introduction
Business expansion into an entry to new market diversifies the business which creates possibilities for tremendous growth. As the business is run internationally, new opportunities are open which facilitates market expansion and physical growth of the company. There is a huge market available at the international level which requires goods and services produced by local companies. International markets have significant and profitable purchasing powers which mainly attempts many local companies to venture into them. However, internationalization of a company and entry into the new market creates new challenges which are likely to limit the growth of the company (Young et al., 1998). The company is required to develop a trustworthy management team which is capable of producing positive results for the growth at the international level. Internationalization and venturing into new markets are likely to face both internal and external challenges which may limit the company’s growth and development if not well managed and controlled as discussed herein.
International marketing and venturing into a new market at an international level is discussed at a perspective that focuses on all the factors that determine the possibility of the company to pick and run properly. Over the years, companies venturing into new markets have been failing despite the time, effort, and resources invested in the business. The marketing features for the comprehensive cases of business internationalization involves studying the potential consumers, industrial knowledge, low tech and high tech, products, and services marketing (Hollensen, 2017).
The factors that influence business expansion at a global level include global economic environment, political, legal, and regulatory environment, social and cultural environment, availability of adequate global marketing information system and research. Targeting, positioning, and segmenting the global market as well as social and cultural factors also affect business expansion. The outlined strategies for international market entry and expansion, corporation and strategies for global partnership, and the ability of the business to analyze the international market competition further influence business expansion. The business should also focus on decision-making processes on products, pricing, and physical distribution channels. Other factors that greatly determine the success of a business in a new market include advancing the global advertising strategies, product promotion facilitating direct marketing, enhancing public relation, monitoring global market effort, and proper planning, leading, and organization of employees and management as well as all the related activities. Business management and leadership are important in determining the future of the business at the new entry in the international market.
Marketing strategies of any business determine the effectiveness of a company or business in entry to a new international market. While running business activities at an international level, it is important to develop adequate knowledge and proper understanding of the market under which the business operates. The complexity of managing and handling the international market for any business is due to the geographical distance challenge. Operating a business in several diverse markets exposes the business to market risks and uncertainties thus requiring a clear understanding of the market. For these reasons, companies and organizations are required to develop appropriate skills, aptitude, and knowledge of the global market to enable the business to effectively compete at the international market level (Doole, Lowe, & Kenyon, 2012). The interdependency and interconnection of the nations’ economies at an international level are enhanced global economic opening and globalization of the consumers’ taste as well as the unlimited expansion internet access which is currently controlling online marketing that enhancing globalization in the business sector.
Poor marketing analysis and lack of proper understanding of the market that a business or company intends to venture in are considered among the major causes of failure of a business in its effort to venture to a new market at both local and international level. Studying the potential market include an understanding of the new culture of the projected customers and the size of the projected market to make relevant decisions on investment to make (Markraft Cabinet, 2015). A clear understanding of the market enables the managers to make a relevant master plan which creates new divisions in the market. The marketing team should comprise of the right team of people who clearly understand the market and have convincing power to peach the product at the international market.
Some company will have the finest product and appropriate marketing strategies but still fail in venturing into the global market. This is common for companies that fail to take time in studying and analyzing the global market before executing the entry. For instance, McDonald's failed in Bolivian due to the assumption by the company’s marketing analysts on the idea marketing across the world was natural (Chetty, 2018). In this case, the company failed to achieve positive marketing results in both electronic and printed media marketing approaches. Companies and business management are reliable in ensuring that the strategies implemented for marketing are effective and yield positive results to enhance the international market of the products.
Most of the management team believes that the internalization process is a simple thing and therefore fails to give required attention while implementing the strategies. There are crucial steps that are involved in establishing business internationalization which needs to be observed. A business organization is expected to form an internationalization leadership team which is expected to engage into the current internationalization effort to sharpen the institution’s goal and develop an updated action plan (American Council on Education, 2019). The team should be allocated sufficient time to conduct the market analysis and review of the plan and provide their findings to the international collaborative team for review and approval.
The specific activities for business internationalization include a site visit, review of the process, regular contact with laboratory staff for information updates, peer review team visit, and developing a report by the visiting team. The site visit includes a meeting with the leadership team in every station in the global market. The stakeholders are steered to begin the dialogue on the implementation of proposed strategies for internationalizing the business. The on-campus review process involves the presentation of the researched mate...