Impact of Globalisation on Business Process of quickEsolutions
Question:
Discuss about the Measurement System to assess of market globalization.
Globalisation has its impact in every aspect of our social life, especially in the economic aspect of the society that underwent greater changes due to the globalisation. The larger section of present businesses is dependent on it to attain competitive advantage in the market by integration of different markets around the nations (Cavusgil et al, 2014). Globalisation of a business refers to the modification in the business process that to address the international market for increasing the market share and market presence, which allows the business organisation to extend their reach beyond the domestic boundaries to address the international customers (Schneider & Spieth, 2013). There are two types of globalisation that can take place in a business that are market globalisation and production globalisation. Market globalisation is the process of expanding the customer market beyond in an international level (Bazylevych, Kovtun & Ignatyuk, 2014), whereas, production globalisation on the other hand refers to the import of product materials for the international market to reduce the costing (Rausch, Sheta & Ayesh, 2013; Meyfroidt et al, 2013). This report will identify the impact of globalisation on the business process of quickEsolutions and the modification required for reducing the challenges to gain advantage in the market.
“quickEsolutions” is an Australia based IT start-up company that will provide both software and hardware solution to its clients and the company is planning to start their venture as a global company providing support to its customers based in both within and outside the boundaries of Australia. The primary international markets they are targeting are Asia and Pacific region. The customers of these target market will receive on spot quick repair service for their electronic products. However, globalisation of the service provided by the company has both beneficial and adverse effect, which can be mitigated following the recommendations proposed.
A multiple benefits can be identified that the company can enjoy in their international market due to the effect of globalisation.
- One of the primary benefits that the company will enjoy in their international market due to the globalisation is the minimisation of industrial rivalry. Expansion of the business will help cutting down the competition faced in a single market, which will in turn reduce the dependency and reduce the bargaining power of the buyer.
- Globalisation will again enable them to increase the market share by increasing the customer base (Samini & Jenatabadi, 2014). This can be further defined using Ansoff future growth matrix, which communicates that the increased target market will in turn help the company to attain products and service development and diversification (Hussain et al, 2013).
They can enjoy an increased and diversified market with various market needs. Moreover, the growth will also help in increasing the profit margin of the company.
- PESTLE analysis helped in identification of the benefits the company can enjoy from their external environment.
The technological diversity in the international target market will help them in exploring diversified technological benefits, which will again help them in taping into the advanced technologies in the developed foreign markets like China (Van Stel, Millan & Roman, 2014). This will enable them to integrate and introduce the advanced technology in their other target markets for extracting greater benefits (Narula, 2014).
- Economic and technological advancement of different foreign markets in which they will be exposed in will help them in catering different customer segment due to the interrelation of technology and economy of a country. The greater economic development will communicate the greater technological advancement attained in the country (Smith, 2013). This in turn will help quickEsolution to explore greater range of economic market, which will enable them to offer a wider range of services to their prospect customers.
- Lastly, the globalisation will help them to place their brand in the international market. Positioning brand in the international market will in turn help them in increasing the brand identity due to the exposure the company will be receiving form the multiple target markets (Wheeler, 2017). The increased brand identify and brand equity will again help them in pushing their services to the target customers as popularity of the brand is directly related to the customer perception of quality (Runfola & Guercini, 2013). Hence, this can help them in increasing the sales in the target market.
- Consideration of the capital infrastructure of quickEsolution needs to be taken into account before expanding their business in the international market of Asia and Pacific region due to the fact of being a start-up IT Company that will make it challenging to them to invest this much of money for expanding their business to this extent (Benito-Hernandez, Lopez-Cozar-Navarro & Priede-Bergamini, 2014).
- The second major challenge the company might face in their globalisation process is the infrastructure, which is directly related to the first identified challenge (Verbeke, 2013). Setting up infrastructure necessary for the global expansion will cost them a fortune (Handfield et al., 2013). Insufficient planning can reduce the infrastructure quality of the company in their international market, in turn reducing the quality of the service delivered to their target customers, which has the potentially to hamper the brand image.
- Quality inspection on the other hand will be one of the primary importances in the process of globalisation. Some of the quality issue the company might face in the process are quality and the time of the service provided to the customers in the global market, fake certification of the service providers and privacy of the clients’ products (Khan, Jaber & Ahmad, 2014).
- The next important challenge that the company is likely to face is the political and legal issues in the target nations as the legal structure of the countries quickEsolution is planning to expand considerably varies that proposes considerable challenge for the company to operate in each one of them (Deresky, 2017; Boddewyn, 2015). It makes it necessary to conduct thorough study of the legal and political factors in each of the markets.
- Moreover, the service provided by the company is similar to other IT solution providers that make it a kind of challenge for the company in their expansion process (Biermann, 2017). It will be challenging for them to create customer base in the target countries and gain customer loyalty replacing the existing competitors in the specific target market.
- The economic condition of the countries quickEsolution is planning to expand considerably various form each other as well as compared to Australia. Hence, it will propose considerable challenge for the company in the process of globalisation in particular field of pricing (Aslam, & Azhar, 2013). They will be requiring different set of pricing strategy for each of their target market depending on the economic condition of the country. They will also face challenge in adjusting salary structure for their employees in the target market, as it is dependable on the country’s economy (Mingst & Arreguín-Toft, 2013). Hence, equity in salary structure is not possible to maintain, which might again create problem in employee satisfaction.
- Geographical disparity of the population of the target population is another challenge for the company, as the company will provide quick on spot solution for the customers (Dasgupta et al, 2017). Hence, it is necessary to make sure the target population is accessible.
- The first and foremost important recommendation that can be proposed in the planning of expansion for quickEsolution in the global market is the market entry mode. Being a start-up IT solution, it will be hard for the company to penetrate the international market due to the insufficient capital and infrastructure. Hence, FDI will not be helpful in this case and might not be beneficial for the company. The appropriate market entry mode will be the joint venture. This will help not only in reducing the risk of global expansion, but also increase the pace of the entry process. They can gain potential information of the target market form the existing companies.
- The company should restrict their expansion in the technologically and economically developed countries. This will help them in initial pricing of their services. They will be able to formulate simple pricing strategy in their initial days and gain greater experience before entering the diversified markets.
- Promotion and marketing holds one of the critical importances for the success of any business organisation regardless of the industry it belongs in. Hence, it will be necessary for the company to focus on the extensive personalised promotional strategy for their global market. Moreover, the promotional campaigns should be country specific and addressing the specific cultural pattern of the target market. This will serve as advantage for the company and help attracting greater number of potential customers in the target market.
Conclusion
It is possible to conclude for the above discussion that quickEsolution will face both advantages and challenges in the global venture. The opportunity the company can explore from the globalisation will help them to grow faster in the international market and extract maximum benefit. However, being a start-up organisation, the challenges faced by the company are greater in number that has been identified. Inappropriate planning can potentially put the business under lethal threat. These threats can be attributed to the fact of being a start-up organisation in the industry. However, following in the recommendation made in the report can help them gaining potential advantage in the target global market. The company should consider joint venture for their market entry strategy to avoid devastating risk of globalisation. The recommended modification in the strategy formulation can help them sustain in the global market increasing the brand equity as planned.
Reference
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