Audiotech Electronics Case Study

AudiotechElectronics Case Study

AudiotechElectronics Case Study

Factorsto consider when deciding on global expansion

AudiotechElectronics should consider four major factors before expanding thebusiness globally. First, the company should identify the mostattractive market segment because going global does not mean thatAudiotech can distribute its products in all parts of the world.Secondly, there is a need to consider the legal issues (such as salestax, pricing, disclosures, privacy regulation) that might affect itsoperations in other countries (Ferrell &amp Hirt, 2012). Third,Audiotech should identify the most appropriate mode of operation. Forexample, the company can decide to partner with local firms indistributing its products or conduct its operations as an independentfirm. Fourth, Audiotech address the technological aspects, such asthe compatibility of its products with appliances used in the targetcountries.

Challengesfaced by a small business going global compared to large businesses

Audiotech,which is a small family business, might face three major problemswhen going global compared to the challenges that a large businessmight face. First, expanding the business to undertake globaloperations is an expensive exercise that might require a lot of funds(Ferrell &amp Hirt, 2012). It is more challenging for a smallbusiness to raise the required funds compared to a large company.Secondly, a small business is more likely to suffer from founderdependence compared to larger firms. This might limit its capacity tooperate outside the domestic market. Third, a small business mightfind it more challenging to balance between growth and quality. Forexample, Audiotech have been producing quality products for localmedia houses, but its engagement in large scale production to supplythe global market might interfere with the quality of its products.

Jointventure or sales force of people

Audiotechshould go for a joint venture as compared to hiring sales forces. Thejoint venture will help Audiotech increase its capacity, share costsand risk with the partner, and access greater resources (Carter,2014).

References

Carter,C. (2014). Theadvantages and disadvantaged of joint ventures or partnershiprelationships.Santa Monica: Demand Media.

Ferrell,O. &amp Hirt, A. (2012). M:Business (3rded.).New York: McGraw Hill.