Globalexpansion for Audiotech
Beforemaking the move to go global, Audiotech must carry out an internalassessment to understand the strengths and weaknesses it has and howits operations best fit global operations. An external assessment isalso necessary to understand the market of the target foreign marketsand the comparative advantages the country offers. The firm must alsoconsider technology levels in the new market and the availability ofskilled labor. Government policy is another issue as well asproximity to the market given than it sells to other businesses andnot consumers. The mode of entry into the new market is also veryimportant given that the firm is relatively small and thus might belimited in the foreign market entry options.
Audiotechfaces all the problems that small firms face in their quest to goglobal. One of the most significant is lack of finances to power amove to a foreign market. Take for instant market surveys andfeasibility studies to such new markets are a huge cost to a smallfirm such as Audiotech which has a workforce of just 75 people.Additionally, such a small workforce would imply administrativechallenges in managing local and foreign operations.
Asa small firm with limited resources and no experience in globaloperations, Audiotech is best suited to enter into a joint venturewith a local firm in the new market. Such an option would requirefewer resources and would enable the Audiotech to make use of thelocal firm’s cultural awareness of the market, brand equity,distribution channels and perhaps manufacturing facilities which canease the expansion. Hiring a local sales force is also the bestoption. First this is appealing because the firm as it is now has alimited workforce hence it would be nearly impossible to send a teamof expatriate sales force to the new market. A local sales forceserves the new market better because they are familiar with the localbusiness culture as opposed to a team of expatriates. Awareness oflocal culture must be acknowledged as a critical business successfactor in global operations.
Ferrell,O., Hirt, G. & Ferrell, L. (2013).Business, a changing world.New York: McGraw Hill