GLOBALIZATION AND INTERNATIONAL BUSINESS ENVIRONMENT
It is an absolute truth that businesses nowadays whether they like it or not are affected by such globalization issues and if a certain organization or companies do not comply with this standards they may become weak in international trade especially during recession when competition always thought about changes and revolution to best demonstrate and maintain their position in the industry. They tend to switch to international policy to lay down their ground and open up massive opportunities that is now overwhelming our world, thus they penetrate the worldwide market when given the opportunity.
If a certain company will only focus on local market they may delimit and lose their chances to a bigger part of their business and soon may saturate their market niche even if they become a leader in the industry they represent. Some companies may be afraid to extend their position because globalization is costly and may required an extensive studies that may take a huge amount of investment on their part because expanding in geographic location and hiring people plus studying another countries business policy is a total headache especially in small enterprises, they tend to defer the globalization issues and settle to be contented on what they have.
In June of 1995 when TOYOTA MOTORS started to deal a globalized marketing strategy to focus on International trade, their focus is to concentrate on increasing imports through partnership with local and foreign automobile companies for manufacturing and distribution to increase offshore production and sales. Their overseas production decreases the maintenance, production overhead and labor cost that have given them the edge to expand from various countries that reaches up to 50 manufacturing sites from 26 different countries. Of course they have suffered an early frustration and market acceptance with foreign customers who never preferred their brand during their first few years of operation and this is usual, but if they have stayed in Japan they may not gain this leadership position because of stiff competition in automobile industry.
In the latest study of Toyota Motors in Japan last 2003 proves that globalization issues is not at all perilous in their entire practice not because they are one of the leader in automobile industry but simply because they must be competitive internationally to supplement continuous progress in their company. During their globalization start up, they have maintained and overcome globalization issues by concentrating on their marketing program and they have examined an extensive work environment on various countries to produce an individual approach to target their audiences from various geographic location and they have been successful indeed, in fact they have overtaken Ford one step ahead in 2004 and never looked backed.
Toyota motors sold 6.78 million vehicles while Ford sold 6.72 million vehicles in 2003 this figure show a 23% increase in income compared to their past few years of operation and this took their position way ahead of the competition. According to Maryann Keller an auto industry consultant that Toyota achieved a 15% worldwide market and cost cut 50% of their expenses in 2003 all because of integrated and globalized strategy that makes it easy for their customers to interact and maintain various trends. All this customers satisfaction ratings has been delivered from exportation of parts and designs of their vehicles that complies with international standard practices to make it worthy to jump in globalized automobile industry. They have encouraged other small players in all business sectors to jump into this revolutionary approach and not be afraid in globalized issues. According to Fujio Cho Toyota President; “If People started living in South Pole they will open a dealership there”.
The real truth is that not all organizations and companies can withstand such claim to compete in globalization and international standard practices, if a certain company would like to jump into this revolutionized strategy their products and services should be competitive enough to gain the support of international audience during the start.
Companies like Mc Donald’s, KFC, Nokia, LG Collins, Tupperware, Nike etc. Have concentrated on their local geographic location and became a market leader in their different industries and before continuing to expand in international trade has also become leaders, but this doesn’t mean that a company who has not gained local market acceptance may not have a chance to change their position in international market. A certain company who has gained leadership in their local countries may have a better chance in international trade because of their proven track records in customer’s preferences.
Therefore we can say that it is valid and a strong indication that these companies need to gain local respect before tapping into globalization and international business environment issues with due respect to customers point of view. Customers deem it wise to buy reliable and proven products and services radically that changes the core of globalization and international business environment.
Credit:ivythesis.typepad.com
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