Various companies present diverse working terms and conditions based on the business environment and other factors such as such business profitability. Globalization issues have been shown to impact performance outcomes of business establishments across the world. Increased adoption technology and expansion of businesses continuously make firms enter into emerging markets to increase their sales.
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The entry into new markets often disrupts long running standards. This paper considers two options of working in international companies. One options involves making a decision about working for a MNE, such as IBM moving into a developing country, for example, India. The second option involves deciding to work for a company from an emerging economy, such as Bharti Airtel, moving into a Western market, such as France.
The first option (working for a Western MNE)
It is crucial to consider important aspects with regard to many MNEs in the developed world that focus on moving into developing markets in order to make a decision whether to work for them. The most recent global meltdown caused many MNEs in the US to rethink abut their operations and focus on entering developing markets such as India.
Based on the growth of about 70% that is expected from the emerging markets, I would choose to work for an MNE moving into a growing market. In fact, it has been projected that India and China would contribute to 40% growth of developing markets.
This could imply that working for a firm establishing itself in such markets would provide an excellent opportunity for growth and expansion. It would be essential to consider the following external influences that would either negatively or positively impact the performance of a MNE in a foreign developing world:
- Cultural diversification
- Competitive models
- Technology trends
- Political issues
- Legal matters
- Environmental issues
- Industry structure and drivers of the economy
- Customer expectations
I would play an important role in offering the management advice with regard to setting operations in a global market characterized by a relatively high level of market growth. A comparison between the expected gains and challenges would be made. Ultimately, a decision would be made on the grounds that there will be more benefits than challenges.
On the contrary, it would also be important to make a decision to work for a MNE in a developing market on the premises that the management plans to execute strategies that would aim at preventing negative impacts of external factors in a new international market.
An analysis of internal factors of a company would also be helpful when making a decision about working for a MNE. First, an analysis of the management vision would help. The vision should be structured in such a way that it supports the operations of the company in international markets.
Second, the strategy of the firm being considered would help an individual to realize whether or not it is destined to realize excellent growth trends in the future. For example, it would be important to consider if the firm has adopted strategic marketing and management models for short-term and long-term goals.
Third, it would be essential to analyze the extent to which the management creates value of the investments made by shareholders. If there would be a high level of value creation, then it would greatly determine the decision to work for a MNE. On the other hand, a firm that does not have excellent value creation trends would not present an important avenue in which to work.
The fourth internal factor to be considered is the past performance trends of a MNE. It would be practical to think that a firm with a good history of performance trends would also perform excellently in new international market. On the contrary, it would be quite difficult for a firm that has not been successful in local markets to perform well in an international market. The option has the following advantages:
- High chances of exploitation of local economies
- Achievement of economies of scale
- Cost leadership
However, the option would be characterized by the following disadvantages:
- High competition from established companies
- Pressure from global integration
- Product customization issues
Second option (working for a company from an emerging country into a developed market in the west)
It is apparent that emerging and developed markets have different opportunities and market characteristics. For example, a developed market in the US would be characterized by a much higher level of competition from business rivals than an emerging one. In addition, a developed market would require a high degree of product standardization and customization than it would be expected in an emerging market, such as India and China.
In order to make a decision to work for a firm such as Bharti Airtel in a foreign market, it would important to consider essential factors that would help in the short-term or long-term realization of goals.
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Organizational structure would be analyzed because it would determine the extent to which a firm would operate in a new market. If a firm’s organizational structure would allow efficient flow of management information, then it would result in excellent performance outcomes.
Pricing strategy adopted by MNEs in emerging market would probably be utilized in establishing operations in the developed world. For example, Kenya’s Safaricom and India’s Bharti Airtel have provided excellent low pricing models that have generated the best revenues for the two firms. Therefore, the adoption of low pricing strategies in the developed market would also help firms to record very good performance outcomes.
The achievement of globalization goals would be based on ideal chain value models that focus on prices and customer satisfaction. In the past, many firms from emerging economies have proved to be successful in developed countries, including Ranbaxy, MISC, Embraer, Teneris, and Sasol, among others.
Before making a decision about working with a MNE from an emerging market, it would also be critical to take into account the drivers of internal integration. Pressures for global integration and pressures for local responsiveness would influence the drivers.
Thus, the catalysts for internationalization would be utilized to maximize efficiency and facilitate the processes of assembling differentiated portions of a product into a standardized whole.
I would go for the choice of working for a MNE originating from a developing market on the premises of its level of IT integration in its operations. In the contemporary world, the use of IT is essential for all operations of a business, including product design, production, marketing, and distribution.
The advantages of this choice would be the following:
- Consumer divergence
- High chances of a firm’s leverage
- Low pressure for global integration
- Increased avenues of sources of global expansion operations
However, the option would be faced by the following disadvantages:
- High competition from multinational firms
- Threat of substitute products
- Adverse government policies