01 May Question: Global expansion is a learning process. Over time, small and medium-sized enterprises (SMEs) can …
Global expansion is a learning process. Over time, small and medium-sized enterprises (SMEs) can learn from their previous expansion efforts and improve on them. Their experience allows them to reduce the barriers they once faced, ideally becoming multinational enterprises (MNEs) (Barkema, Bell & Pennings, 1996). Very few MNEs are truly successful globally. If the ultimate goal is globalization, firms need to target a corporate business strategy that leads to a broad and deep penetration of foreign markets across the world (Rugman & Verbeke, 2004). According to the Uppsala stage model, firms need to familiarize themselves with national cultures, taking small steps to increase international involvement gradually. Smaller steps allow firms to understand better local habits and preferences, the market structure and ways to approach national consumers (Barkema, Bell & Pennings, 1996). Global expansion only has value as a corporate business strategy to the extent that firms use it as a learning process and implement it in all levels of their organization. A deeper cultural understanding needs to be developed not only high-level managers but all employees (IESE, 2009).
MNEs develop the capacity to reduce barriers through their experience in foreign markets. For example, they could be in a bargaining position with a host government (Barkema, Bell & Pennings, 1996). SMEs do not have the experience or resources to get past these barriers as easily. MNEs may have more exposure to procedural barriers including policy implementation procedures, attitudes of regulating authorities or public officials, or corrupt or discriminatory governments (Filess & Busquets, 2006). The majority of SMEs rate internal capability and access barriers higher than those related to the business environment (Fliess & Busquets, 2006). These barriers can include financial issues, market changes, access restrictions, technological developments, etc. (Neville, 2015). These barriers are ranked higher for non-active exporting firms, while active exporting firms include trade barriers in their concerns. The most prominent trade barriers include unfavorable foreign rules and regulations, high tariff barriers and inadequate property rights protection (Filess & Busquets, 2006). Many domestic regulations also prove to be a barrier. Governments want to protect their home industries and put restrictions on importers if those industries could be driven out of business (mjmfoodie, 2010). SMEs ultimately have limited resources and a lower threshold to take on risk. For some MNEs, they can spread themselves across international markets and reduce their risk profile over their overall business portfolio (Gomez-Mejia & Palich, 1997). They can afford not to execute a perfect global strategy for a specific market and still be okay because of their extensive portfolio. SMEs do not have that luxury, and therefore barriers are much more difficult to overcome.
OPEN A DISCUSSION ON THIS AND ASK QUESTIONS!
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.