Introduction
Car wash business is no small business, and I want to show to the world that it has an international appeal. Most managers see car washing as only a part of an activity or a small neighbourhood business and not a service that can provide a big profit. It is clear from the literature: this is not mere entrepreneurship, but a $24 billion industry (“International Carwash Association: Invest in a Car Wash” par. 1).
Car wash business can go global. I have tried it, and I know I will be successful, God willing. There are no secrets, but just those essential traits businessmen should have – tenacity and hard work.
Car washing is a part of car business and an important activity in human life. You cannot have a car to serve you if it is not clean and beautiful like your spouse. Car aficionados know very well that if you have your car checked for maintenance, it has to pass by that shop for cleaning.
I started this business only because I had a maintenance shop for all kinds of cars. That is part of my business history and what happened was that my shop did not earn too much, but my car wash business flourished through the years.
My associates suggested that there must be a sort of expansion, from this country to many parts of the world. We all know every part of this planet has a road, every road has a car, and every car must be washed.
Going global should be carried out with careful planning and to be implemented by qualified and dedicated executives. I have people who do not easily give up when challenged by the many hurdles in the international market. I told Paul, my vice-chair, to go and execute expansion plans in Asia, Africa, North America, and other emerging markets.
Expansion to Asia, Southeast Asia, Africa, South America, North America and Europe
Foreign investors have the disadvantage in entering the foreign market because of lack of knowledge of the local market and other environmental factors (Tan and Meyer 504). In this expansion activity, we must have access to local knowledge and information. Therefore, it is essential that I send first my trusted associates and gather some consumer insight.
Globalisation outcomes affect international competitive strategies. Management style is influenced by culture, and we have to determine if we have to introduce standardisation or customisation strategies.
Parts of Asia and Southeast Asia are some of the fastest-growing emerging markets. Emerging markets are instrumental in changing the structure of the world economy. In doing business in Asia, we have to listen a lot to our counterparts rather than talk more, unlike in a Western country, where people talk more than listen.
In Africa, car wash is a must for any car owner. Most roads are not developed. People prefer to ride in public transport. My associate suggested that we had to figure it out very well as this might not be a favourable country for investors because most entrepreneurs in that country prefer the traditional small businesses like retailing or car repair (Shelly 2). There are not many cars in Africa, not as in North America or Europe.
Big opportunities are waiting for me in North America and Europe. The love for car in America is still alive and kicking (Sandlin 3), and there is stiff competition in the car industry. Japanese car manufacturers have long ago penetrated the American and European markets, but American car manufacturers do not want to give up their flag. My company will focus and provide more resources for these large markets.
International strategy and organisation
This will involve a large amount of planning that will focus on selecting appropriate organisational objectives and formulating plans to achieve those objectives. The strategy involves providing planned actions that organisations have to take to help meet those objectives.
We can set our activities through several stages. Management should first identify company mission and goals by defining the specific business and the resources needed. Stage 2 will focus on identifying core competency and the main value-creating moves. In order to develop this business, you must firmly identify the specific services you can do.
A significant strategy is to write the business plan that should include what we can achieve by identifying the opportunities, competitive advantage, and other important consumer insight, which may focus on the target segments’ behaviour and significant information. Another important move is customer analysis. Here, we will be looking at the important segment in the particular country’s demographic and other environmental factors. This analysis will have a key role in the future activities of the company branch.
Choice of supplier is another important step that will affect future activities. These suppliers include those who will provide the primary equipment, specialty equipment, the general contractors who will be in charge of constructing the car wash facility, and the equipment installer, among others. We have to include the realtor who is in charge of the location. The realtor knows the geographic area and the political environment in the locality. We should be able to gain the cooperation of this person to support our plans and activities.
This strategy will involve members of the local community, and by involving these people, we will have to deal with other factors like understanding the local culture, providing compensation, and many other important issues.
Analysing international opportunities for my business
Managing an international business requires a broader understanding of socio-cultural and ecological issues of consumption and purchase behavior. We have to analyse the country differences in macro-environmental contexts, and the within-country differences, like the characteristics of the city and country context, neighbourhood environments and social interaction. These insights should provide us with significant information on how service can be effectively delivered to customers (Douglas and Craig 151).
International business is influenced by many factors. These are environmental factors that firms should adjust when they enter a particular country to conduct business. For example, in negotiations, managers have to consider the cultural practices of countries and organisational practices. Most firms have their own way of dealing with this situation, and one way is to hire consultants. They may also consult their own people operating in that particular country.
In analysing international opportunities for my the car wash business, we have to do some step-by-step processes, first looking at the macro-level data and then choosing a number of countries to determine which of our objectives should fit. We cannot just discriminately choose which of the countries to penetrate without doing some effective feasibility studies.
We can rank countries according to their relative attractiveness, but we have to support this with reliable data and identify potential target segment. There are countries which have almost similar macro-economic fundamentals, but they differ in terms of regional variation and several other marketing factors.
Moreover, because of intense globalisation and technological advancement, we have to focus on the wider socio-cultural and ecological framework of consumer behavior and consumption. We have to examine the macro-environmental features, country characteristics and related urban and rural contexts.
Selecting and managing entry modes
The choice of entry mode is important for the car wash business. Our team has focused on learning the ropes of entering foreign markets. Some factors that determine the entry mode choice include cultural distance, the firm’s country of origin, political barriers, and level of economic development of the country we are to penetrate (Zhang, Zhang and Liu 751).
There are three common types of entry modes, namely: joint venture, green-field investment, and acquisition. A joint venture means acquiring the resources of another firm headquartered in the host country. It is an easy way of reducing environmental risk. However, the other partner can also have the opportunity of acquiring our own resources. The green-field investment enables our company to have control over the local facilities, although having privileges from host governments cannot be obtained.
The acquisition is the fastest way of having a presence in the international market, but doing this requires large capital and the company has to deal with many cultural and national differences of the host country. Green-field investment is almost similar to acquisition in that both require full ownership, but joint venture is a partnership. Green-field ownership requires that the two firms create a new venture, which is different from acquisition. A joint venture means a new operation and use of a partner’s existing assets (Zhang, Zhang and Liu 756).
When we make our initial entry mode, it is necessary to be optimal in the short term. However, as we implement the appropriate mode we have to make a smooth transition to another mode of operation as this is needed for “future marketing” and fulfilment of the firm’s objectives (Zhang, Zhang and Liu 756).
Developing and marketing products
Our product is service and there are several ways to develop and market this kind of service. Car wash is not just cleaning the outside portion of the car. It also includes cleaning the inside portion.
Anybody can wash his/her own car but not everybody can do it professionally. We have trained personnel in doing an effective car washing and cleaning, which is the reason why most car aficionados bring their cars to us because they want the best care for their car. A car is not just an ordinary piece of equipment or object; many people regard it as their friend or confidante. In other countries, a car is an extension of somebody’s home, that is why you can do everything on it, taint it and let no one see what you are doing inside, for as long as you do not violate the law.
The personnel must be polite and must first ask permission from the car owner before entering the car. Every part inside the car must be free of dirt and trash has to be discarded. Although the inside is as important as the outside part of the car, our personnel will focus on the outside appearance. Moreover, this aspect must follow cultural practices of countries we penetrate.
Smooth linen materials, and soap and special chemicals for cleaning can be used and applied carefully. Effective water spray with air-compressor is an essential equipment in car washing. Car wax should be applied after it is declared clean inside and outside. When the car goes out of our establishment, it is like a well-groomed teenager ready to show to his long-time crush his look and personal appearance.
Managing international operations affecting my business
Knowledge is the most important resource we can rely on in managing international relations. Since the founding of our car wash business, we have instituted organisational knowledge as part of organisational culture. We should be able to develop strategies for utilising competencies and enhance suitable ways to work out on these strategies effectively. We will face new implementation procedures since foreign environments can enhance or constrain our traditional strategies. We are prepared for these environmental factors.
We will depend much on our planned structure, which is adapted for the international environment and fitted for the country and regional level. By structure, we mean focusing on the lines of communications, e.g. the reporting structure, or entry mode, as explained in answer number 5. Studies have found that firms devise mechanisms to develop effective reporting structures (Cannice, Chen and Daniels 130). International operations will require teams that must have effective coordination and management. We draw this heavily on organisational knowledge.
Managing international operations is an operations management context. Success of our international operations will depend on this significant management function. Operations management function will also rely on the strategic and tactical decisions performed by top management. It will be the deciding moment for our car was business.
Financial and marketing decisions will affect operations management. These three functions must have proper coordination and communication. The finance department will focus on financial issues. The marketing function will focus on marketing the products and services of the company. The operational function will look for important resources, find out internal and external supplies, assess competencies, and manage organisational resources (Plenert 5).
Hiring and managing employees affecting my business
Determining the number of employees who will accomplish the tasks and activities in the car wash business is an important aspect of the hiring process. Recruitment as a means of closing supply/demand gaps must be effectively matched with increased human resource development, more promotions and motivational factors. In case there is difficulty in hiring suitable employees, plans will have to be modified to consider reducing the number of employees. In determining recruitment needs, there should be a classification of applicants, for instance, those needed to account for labour turnover, and the employees needed for short-term and long-term growth (Ismail, Azariadis and Jusoff 130).
Company objectives play an important and critical role in the staffing process. Management should be concerned with identifying and selecting persons capable of implementing the car wash business objectives. Assignment of personnel to the different department or sections is part of the staffing process.
The source of labour supply is also important. Where will the labourers come from? The company will have to attract new recruits, while existing employees should be trained, developed or promoted. Although job applicants must be properly screened, they must come from the local community or from the nearest town or city where the branch is situated.
Effective performance management requires understanding of what performance is. We have to know the duties and responsibilities of a specific job function before we can assess the performance of a particular employee. Job analysis is an HRM function which describes what constitutes a job. Related with this is “needs assessment,” which is a requirement before training and development are accomplished. It involves assessment of the presence of a problem.
Cross-cultural factors affecting global business
The emergence of global markets and the skyrocketing growth of industries have brought together employees of different culture and nationalities. To effectively manage these diverse groups requires a different degree of sensitivity and knowledge from managers with international experience.
Cross-cultural interaction becomes a significant issue when there is miscommunication. There are negative effects coming from contradictory discourse tactics, which can be viewed as intricacies in business. However, this can be properly “repaired,” if our people know how to introduce some techniques (Ismail, Azariadis and Jusoff 132).
Cross-cultural encounters occur when firms of diverse cultures meet. Negotiation in business is an activity wherein two groups with common or opposing interests attempt to find an agreement on subjects of mutual interest. Negotiation is a communication process based on “concrete social settings” (Ismail, Azariadis and Jusoff 130). The contents of negotiation are affected by culture, strategy, background and context.
Cross-cultural encounter is a meeting of two different cultures. In this scenario, both parties can have their own distinct ways of executing and discerning the negotiation process according to their own culture, values systems and behaviour. If two parties interpret the negotiation content in terms of only one culture, then communication becomes successful. Communication is also affected by “differing socio-economic status, gender, age and regional variations” (Ismail, Azariadis and Jusoff 130).
Our understanding of spoken discourse conducted in business is really important because this may affect the success of our business in a foreign land. Researchers are focusing on business language as this is a primary tool for success in international business communication. While English is an international language, there is still a need to learn and understand the cross-cultural factors in business, and language is only one of them.
Politics, law, and business ethics
Politics, ethics and law affect our entry in the international arena of business. These three are dominant factors when doing our entry mode in a particular country. This is the reason why we have to conduct intensive research not only on customer segment but on country characteristics.
Politics may refer to authorities who have influence in the decision-making process of the government. Laws pertain to the rules and regulations that govern our actions as a new entrant in the business environment of a particular country, while ethics may be influenced by cultural intricacies of the host country.
Ethical issues and law are likely to arise in the course of conducting business. It is important to have the right entry mode and the appropriate partner firm in the country we will penetrate because we will have consultations with them regarding ethics and law.
On this aspect, we will be talking about rights and responsibilities and other sensitive issues like environment, compensation, duties and obligations. These issues will vary from country to country and it is important that our managers in the field know very well how to deal with them. When we talk of law, we have to know and understand how to protect our people and our organisation.
On the other, when it comes to ethics, we will also deal with the local culture. Organisational culture is different from local culture and these two might collide if we do not have the right people and managers to properly handle the situation. Ethical practices are influenced by cultural norms and mores of a community.
Economics and emerging markets affecting business
Economics and emerging markets play an important role in the world economy. Emerging markets are a group of middle-income countries which made a rapid entry in the world economy since the mid-1980s and are now affecting other global markets. These economies were affected by the different financial crises and economic downturns but have succeeded and remarkably outpaced the others. The emerging markets have had a growth rate of 4.7 percent for the period between 2011 and 2015 and they will further outpace the other developed economies, as per report by the World Bank (Ghibuţiu 105).
China and India’s share of GDP has increased from just about a third to near half in 2012. However, the advanced economies’ share of world GDP has been reduced steadily, and the developing economies will register for about 60 percent of world GDP by 2030 (Ghibuţiu 106).
Emerging economies are considered the main sources of global growth. They have accounted for about half of global output and two-thirds of PPP in 2011, and half of this were accounted to China and India. Emerging economies have accumulated large amounts of foreign exchange reserves, increased capital on the world financial markets, and attracted many investors into their shores (Ghibuţiu 106).
Developing countries are now becoming part of the emerging markets. It is safe to say that current emerging markets were once developing countries. These countries are increasingly influencing the global macroeconomic situation and the future of world economy. They hold a big impact on economic competition, global output, employment, commodity price indexes, and have fortified “their position within international economic and financial organisations” (Ghibuţiu 107).
International trade affecting business
The world economy is now under stress by the highly lively and large number of structural changes. The transformations are wide in scope and swept throughout the entire planet. Emerging markets like India and China are now major players in the world market. About a century ago, world economy was dominated by the U.S. on one side and the EU on the other; but this century the shift goes on a balanced platform with both developed and developing countries being parts of the centres of growth (Ghibuţiu 104). Authors call this the “multipolar” world.
Advanced economies have contracted during the 2008 to 2009 economic crisis, but developing economies played a key role in increasing global GDP growth. Because of this, developing economies acquired substantial share of world GDP. OECD (qtd. in Ghibuţiu 106) reports that by 2030, developing economies will have a share of about 60 percent of the world GDP. IMF also reported that in 2011 developing countries acquired nearly half of “global output and two thirds of global growth (in PPP terms)” (Ghibuţiu 106). We can attribute this growth to China and India, which have both large populations.
The shift in economic power is accompanied by the almost similar shift in financial growth mainly due to the growing amount of FDI received by the emerging markets. For example, in 2011 FDI inflows grew by more than 50 percent compared to only about 20 percent in 2000. China’s and India’s shares of global input and output increased dramatically.
International trade heavily influenced world economic activity and triggered economic growth of developing countries. World exports have doubled the rate of world GDP, but negatively affected these countries in the sense that they are more interdependent with each other economically than before.
Business-government trade relations affecting business
Governments and businesses cooperate to a certain extent where foreign business becomes at a loss and cannot intervene. This is the predicament of foreign business when it comes to entering an unknown domain. In some authoritarian regimes, there are government-owned and controlled businesses as our main competitors, so we are out of business from the beginning. In some countries, government and business relations seem written in their constitution and therefore cannot be broken.
In Europe, for example, these trade relations are institutionalised. On the government side, three community institutions stand to protect the interest of the public: the Commission (the European Community’s bureaucracy), which provides programs for legislation and executes policies of the EC; the Parliament (the representatives of the people); and the Council, the most powerful body that promulgates policies and decisions, and promulgates legislation (Calingaert 119).
On the business side, they have the European individual firms with their respective organisations. There is the EC-wide umbrella or non-specific groups, an example of which is the UNICE, or the Union of Industrial and Employers Confederations of Europe, which has a membership of 33 federations from 22 European member states. UNICE was established in 1958 to stand for the European industry and it works on issues that challenge across various sectors, in particular environmental and social policy.
Europe also has Eurochambers (Calingaert 119) and the European Confederation for the Retail Trade. There are other influential groups which affect business, in particular my car wash business. However, my business belongs to an industry which has its own grouping, the International Carwash Association. In other words, we will not be totally affected by this business and government trade relations.
Foreign direct investment affecting business
Foreign direct investment has helped countries transcend from one level of economic development to another. Many developing countries attained this transition by opening their markets to foreign investment. However, while my car wash business helps host countries as we bring in foreign capital and create jobs for the unemployed members of the population, we are also at the disadvantage. Foreign investors lack knowledge and they have to locate and ask the help of local firms to provide them with important knowledge (Tan and Meyer 504).
We can co-late other foreign firms with the same interest as ours and acquire industry-specific knowledge, which can be significant data, forecasts, and valuable information on customers and suppliers (qtd. in Tan and Meyer 506).
This particular knowledge we can attain can be tacit knowledge and we need personal interaction in obtaining this knowledge. One factor that can help the facilitation of knowledge is geographic proximity because it can provide constant social and professional contact. Co-location in the same business can also facilitate an exchange of industry-specific resources, in terms of people with special skills and suppliers (Tan and Meyer 506).
Through interaction and socialisation, an agglomeration is formed and a group of specialised labour and suppliers grows, allowing for a productive interaction and positive inputs among the foreign firms. Also, through this process we can enhance the quality of specialised labour as we are able to provide investments in skills (Tan and Meyer 506). The International Car Wash Association is an example of this agglomeration where we have improved the skills of personnel and improved our respective organisations worldwide.
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