A Brief description R.M William company
In the contemporary business world, globalization has become a major consideration by every business. The need for consideration has resulted from the competitiveness in the business market. As a result, companies are considering opening their business in international markets in a bid to get more consumers for their services and to increase the business market share as well. Similarly, the development of a business into international markets creates new business opportunities (Irani & Noruzi, 2011). In return, the companies that embrace globalization realize continuous growth following the exploitation of the new opportunities created. In addition, the business market is undergoing a revolution where globalization is not only an option but the strategy of every business. Among the factors contributing to the globalization, factor include the development in technology. Following the introduction of E-commerce technology in businesses, many businesses have opted to undertake their business through online platforms. Technology has helped solve the challenge of geographical distances between consumers and producers since transactions can take place through online platforms. As a result of this technological development, companies have to consider developing their services and products to the international markets.
During the expansion process, the company should consider some factors in the intended foreign investment. Among the key considerations that the business should develop include the business environment in a foreign country. the analysis should be developed in various categories that are cultural factors in the country, political factors, technological factors, economic environment and financial environments (Doole & Lowe, 2008). The analysis gives the company the required knowledge on the intended venture and helps in its strategic development towards achieving its growth intention. The paper compares the business environments of Europe and China to R.M Williams Company based in Australia with intentions to expand to the international market. Through the study, the paper is aimed at providing knowledge that is necessary for application in the business field more so international markets expansion.
M William was started in 1932 by Reginald Murray (RM) as a textile industry. Later RM was joined by Dollar Mick who was knowledgeable in leather work and craft. Mick offered teaching services to the RM. After a series of failure RM finally succeeded to make a boot and developed experience in the field more so in the in the best textile skills which are honored to date. Following the experience gained RM set up his first boot shop in a small housed behind his father’s. RM developed advertisement strategies for his small business where he made advertisements in the rural press and also developed a mail order business platform. RM also hired a group of men who were knowledgeable about the crafting and art field to help him in the production process. The various strategies initiated the emergence of R.M Willian company as a significant business in the Australian economy. The company has also expanded to explore international market through exports and foreign investments (R.M William, 2017). The company exports its products to more than 15 countries. Furthermore, the company has a store in London in addition to its more than 50 stores based locally in Australia. The company is among the largest companies in Australia.
While developing international expansion strategies it is always good for a business to carry perform an analysis of the intended business venture in the country. The analysis helps the company to develop strategies in line with the environment of the intended venture where compatibility assures the business of growth. The growth result from the acceptance of the business in the field since it upholds the environmental requirement of the field. Among the key factors to consider include the economic and financial environment that determines the intended performance in the field. According to analysis, China financial and economic status has steadily raised. according to statistics, it was revealed that the G.D.P in the year 2010 rose by 6%. The increase was contributed to by an equivalent increase in other business sectors such as the export field where the revenue rose by 4.3% among other fields. The labor market also showed a positive shift by declining with 4.4% in comparison to the unemployment rate in 2009 (Hong Kong Monetary Authority annual report, 2010). The decline is attributed to continued investment in the country that offers employment opportunities to the country citizens. The stock market has also portrayed a significant increase where the stock trading increased by 10.9%. In addition, there was an increase in the demand levels both domestic and external that assured business growth over the year. In the financial sector banks have developed lending terms that assure investors of capital. The motive of the capital providence is to encourage investors to invest in the country. The capital liquidity increased by 16.8% in comparison to the year 2009.
Comparative analysis
Similarly, Europe has developed strategies that have enhanced growth in its various countries. the country has allowed for the ownership of local companies by foreign investors. As a result, most investors have invested in the country since they enjoy the protection of the law. The country has also realized a significant growth where its GDP rose by 1.8% in the year 2010 in comparison to the year 2009. The growth signifies increased investment in the country. The value rose significantly over the year 2011 but it later lowered due to the pressure mounted on the banks. The effect lowered the GDP to 1.5% in the year. The drop was also a result of inflation incurred in the year. Following the decline, the country developed laws to prevent the occurrence of a similar situation in the future (ECB, 2011). The implementation of the developed strategies has assured the stability of encouraging investors into the country. The country has also facilitated the growth of private banks as sources of capital to investors through lending (Bongini, Drozdowska, Smaga & Witkowski, 2017).
China has emerged as one of the most economically efficient countries in the world. The country has developed from a poor country to a world economic power within the last few decades. The success of the country has been developed from a change in leadership. The visionary leadership has developed strategies that have encouraged growth more so through foreign investments. Among the key supportive laws to foreign investment is the Guanxi law that protects investors from exploitation that is from overdue tax by the government (Pilipszyk, 2017). The law also helps the foreign investments to adopt the cultural environment of China. As a result, the companies are accepted as a stakeholder in the China market. The administration of China has developed good international relations with other countries encouraging trade within the countries. Furthermore, the country has developed trust laws that seek to protect investors from exploitation by various stakeholders in the investment field. Due to the existence of effective administration has ensured maximum output of the internal companies in order to increase their competitiveness in the market field. As a result, the companies have ensured that they remain competitive through technological innovations that ensure maximum output.
Europe has also considered increasing FDI levels in the country. As a result, the country has developed several measures to ensure the achievement of the increase in the FDI sector. Among the strategies developed by the country include the removal of restrictions to foreign investment from the government law, that is, the removal of quotas and tariffs. The removal allows investors to access the Europe market with much ease increasing the investment levels in return. Furthermore, world politics have affected the leadership of the country to adopt a liberalized strategy of leadership. The world is focused on globalization and leaders are advocating for the implementation of laws that enhance liberalization in the country. As a result, liberalization will be realized around the world. The country has also offered inflows to banks that will boost the capital flow of the country which will encourage investors to invest in the country (Jan & Evzen, 2013).
Economic and Financial environments
China embraces its culture through its annual cultural festivals that assures the continuation of the culture of the past. The country embraces two main perspectives, that is, collectiveness and long-term orientation (Parrenin, Rau & Zhong, 2015). In addition, Chinese culture is developed in the Guanxi. The Guanxi law focuses on businesses on adjusting in accordance with the Chinese laws so as to enhance acceptance in the business market. The collectiveness and long-term perspective make attracts investment since most investors have compatible attributes. The culture adopted by the country has played a great role in its economic development since the country is not self-centered.
On the other hand, Europe adopts a hierarchal culture of leadership where an individual at the top has maximum power to make a decision. In such a regime the leadership is too far from considering economic matters and assumes an authoritarian form of leadership (Bezpaliuk, 2016). As a result, investors tend to run away from investing in the country due to restriction based on individual consideration other than communism. Secondly, the country has the attribute of uncertainty avoidance where changes have to undergo a legal process for execution despite their necessity and emergency. Such a legal frame makes it hard for a country to change its laws resulting to focus on the old laws. Lack of change affects business which is prone to change following changes in their environments.
The need for foreign investment is rising constantly and businesses should develop goals to expand to international markets. Among the implementation, procedures should be the study of the intended market venture. The study helps a business in selecting the best entry model that suits the market targeted (Tang & Liu, 2011). In addition, the analysis helps the business to identify various factors in the market that are in support of the business goal. Also, the analysis helps develop a comparison of the various market to determine which best suits the business goals and objectives, for example, R.M Willan company can choose one of the two countries that is Europe and China. However, if the company considers the effects posed by the culture obtained by the two countries the company would settle for China since it has a more diverse culture that embraces other cultures. On the hand, the company would change its perspective from investing in Europe based on the authoritarian nature of the country that results in one self-development culture. Furthermore, based on the economic development the company would settle for China since the country has a high economic development level that assures excellence in the business field. China has also developed protective measures to protect investors which lower the risk involved with investing in the country as opposed to Europe. R.M William company should consider developing its business activities in China since it is assured of immense benefits from the investment.
Conclusion
Globalization has become a necessity in in the current business world both to countries and businesses. Globalization encourages FDI in a country that plays a great role in boosting the country economy. Furthermore, the competition created in the business field by the existence of many businesses encourages innovation that promotes production and quality (Bose, 2012). As a result, the country realizes immense development both internally and in external businesses. The home companies also develop competitiveness in the international market due to the quality of their products. As a result, countries should enact laws that will facilitate foreign investment since the latter has a handful advantage to the country. on the other hand, companies should consider developing international markets to develop increase their market share and ensure their survival in the business field. In the expansion process, companies should undertake a study of the environment of the field of investment. The study helps the business in setting the business model that entails the business activities in the foreign investment. Furthermore, the business is prepared of any expected risks in the new venture. Foreign investment assures the growth of a business through the development of technology to improve productivity and enhance competitivity (Mishra, Degtereva & Paneru, 2017). Businesses should, therefore, take notice of the changing business world and adjust accordingly through foreign investment.
References
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Tang, J. & Liu, S. (2011). A network-based theory of foreign market entry mode and post-entry performance. International journal of business and social science, Vol. 2 Issue 23, pp. 50-58
R.M. Williams. (2018). Retrieved from www.rmwilliams.com.au (Accessed 10th October 2018)
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