Special Topics in international Business - Assignment Example

BSI 403 a. In a short explain how each of the following concepts influences and affects the decisions on international businesses Culturalawareness/Cultural differencesCultural awareness enables managers to make appropriate decisions, as they have a relative understanding of major cultural differences and thus, are capable to manage the risks of misinterpretation in various situations. Cultural awareness helps them to predict potential challenges associated with differences in cultures and thus to manage or turn these challenges into opportunities.

Cultural differences greatly affect the decisions on international businesses, as it is one of the major sources of challenges associated with marketing products to consumers, communication dealing with host-country governments, suppliers, and other partners, managing local workforces, etc. (Aswathappa, 2006).2. Trade barriers Trade barriers greatly affect the decisions on international businesses as they impose restrictions on international trade in specific country or economic region. Thus, the company willing to export goods to a foreign market where trade barriers are high may find this business strategy inevitable because of high costs incurred in result of trade barriers (Aswathappa, 2006).b. Globalization has created new opportunities and challenges for the international business.

Explain by referring to UAE experience Globalisation has created both opportunities and challenges for the international business. Some of the major opportunities are: opportunity to reach global market and to increase significantly revenues, opportunity to reach economies of scales, to reduce manufacturing costs by otsourcing production facilities to other countries, opportunities to gain access to technical expertise and technical know-how, opportunity to reach global resources that are not available or expensive in home country risks (Wild & Wild, 2011).

Thus, for example, the UAE-based airline company, the Emirates Group, was founded in 1985. Nowadays, the company provides passenger, postal and cargo carriage services across the world (Wild & Wild, 2011). Globalisation allowed the company to expand significantly the number of destinations up to 100, to achieve economies of scales, to develop additional sources of revenue, etc. However, globalisation poses substantial challenges for international business as well. While the international companies gain access to global markets, they simultaneously face with fierce competition on behalf of both local and international companies.

Another significant challenge is associated with the fact that companies need to work in different countries with different cultures. The companies that have no previous experience in international business it might be quite difficult to adjust to the cultural differences. With the development of IT operations the companies also face with information risks, as well as reputational risks (Wild & Wild, 2011). The Emirates Group company also faced with some challenges. As the company employs 50, 000 of people, and the staff is highly diversified, these challenges are greatly associated with cross-cultural communication and customer service. c. American investor think that his company’s product would be successful in UAE, but he is not sure how to get started in international business.

Outline and discuss the main factors his firm would have to take into account when planning to enter the international marketWhen planning to enter the international market (UAE or any other), an American (any foreign) investor needs to analyse the external environment and competition on the market. He needs to take into consideration the following major factors, including: political factors, economic factors, social factors, technological factors, legal factors and environmental factors (Aswathappa, 2006).

Analysis of these PESTEL factors will allow him to identify major threats and opportunities and decide on what entry strategy is better to choose. In addition to analysis and evaluation of the above mentioned external factors it is important to analyse competition in specific industry and to evaluate five major forces (Porter’s 5 forces framework): the level of competition rivalry, entry barriers, power of suppliers, power of buyers and threat of substitutes (Aswathappa, 2006).References:Aswathappa, A. (2006). International business.

New Delhi: Tata McGraw-Hill.Wild, J. and Wild, K. (2011). International Business: The Challenges of Globalisation. Pearson Education, UK