Multinational Enterprises Essay
The needs to fulfill market demands and find new revenue well have driven many corporations in the world to conduct their expansion strategy. One famous way out is to expand into foreign markets while enhancing the brand value in local market. The situation refers to internationalization or globalization in which many companies take the ways in order to boost sales. The situation occurs since nowadays a business operational coverage does not restricted by national boundaries since they can sell their services over the internet under B2B (business-to-business) or B2C (business-to-consumers) schemes.
Many factors encourage companies to conduct internationalization; they include the belief that their products are unique and distinctive by any measures, have recognized brands; and possess worldwide distribution channels, technological leadership, and better product value. However, the corporations, often called Multinational Enterprises (MNEs) or Multinational Companies (MNCs), may overlook several considerations when performing internationalization, which in turn prevent the companies to reap the benefits of their foreign market presences.
This situation suggests that amidst the attractiveness of providing services or selling products in foreign markets due to their well-recognized brands, companies need to pay attention to external and internal forces in the market since they determine the success of the companies’ international operation. The forces do not only include the technical issue or market knowledge but also supporting issues such as human resources management, cultural issues, and financial issues, to name a few.
Concerning business expansion into foreign countries, this paper will discuss several issues relating to marketing Chinese electric bicycle to Perth (Australia). Several issues include economy, technology, legal and political, human resource strategy, and cultural assessment and negotiation, to name a few. 2. Background The background is about the Electric Bicycles that we take from China, import them, and sell the products in Perth (Australia). We also have our own website that we can sell online to people and ship our bicycles to any where in Australia.
3. Economy In CIA Factbook, Australia is regarded as an example of a prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies. Since Australia has many natural resources, the country becomes a major exporter of agricultural products, minerals, metals, and fossil fuels. Commodities account for 57% of the value of total exports, so that a downturn in world commodity prices can have a big impact on the country’s economy.
In addition, the report from CIA also notes that Australian government is pushing for increased exports of manufactured goods, but competition in international markets continues to be severe. While Australia has suffered from the low growth and high unemployment characterizing the OECD countries in the early 1990s and during the recent financial problems in East Asia, the economy has expanded at a solid 4% annual growth pace in the last five years. Below is economy figure of Australia.