CHALLENGES OF BUSINESSES ENTERPRISES –Business enterprise refers to a person spotting a business opportunity and setting up a business. … An entrepreneur might start a business enterprise because they believe there is a demand for the goods or services they can provide. Businesses sell all sorts of different goods and services. CHALLENGES OF BUSINESSES ENTERPRISES
CHALLENGES OF BUSINESSES ENTERPRISES
We live in rapidly changing times, especially for businesses. Consider that, in a single generation, businesses have had to adapt to entirely new marketing channels (web and social), decide how to invest in and utilize new technologies, and compete on a global stage — things that were barely imaginable to our parents’ and grandparents’ generations. CHALLENGES OF BUSINESSES ENTERPRISES
One side effect of these rapid changes and growth is that no single CEO — or any employee, for that matter — can be an expert in everything. This was, perhaps, always true, but it has never been more apparent.
This is why, in my opinion, some of the biggest challenges businesses face today are best met and addressed with qualified consultants. Bringing on a consultant helps CEOs add the expertise and skills they need to address particular problems at particular times and can provide the best possible outcomes. CHALLENGES OF BUSINESSES ENTERPRISES
Just a few of the challenges I see businesses facing that are best addressed with the help of a consultant include:
Uncertainty about the future
Being able to predict customer trends, market trends etc. is vital to a changing economic climate, but not every CEO has Warren Buffett-like predictive powers. Bringing in a consultant trained in reading and predicting those all-important trends could be the difference between a bright future and a murky one. CHALLENGES OF BUSINESSES ENTERPRISES
Many CEOs I know are ideas people; that means they’re great at the big picture and disruptive thinking, but less good with things like cash flow, profit margins, reducing costs, financing, etc. Small and medium businesses may not require a full-time CFO but would do better to employ a financial consultant who can step into the role as needed.
Using a meaningful set of rounded performance indicators that provide the business with insights about how well it is performing is key. Most business people I know are not experts in how to develop KPIs, how to avoid the key pitfalls and how to best communicate metrics so that they inform decision-making. In most cases, companies rely on overly simple finance indicators that just clog up the corporate reporting channels.
Regulation and compliance
As markets and technologies shift, so do rules and regulations. Depending on your industry, it can make much more sense to bring in a consultant to help with these areas rather than trying to understand the complexities yourself — and risk fines or worse for non-compliance.
Competencies and recruiting the right talent
Again, a small or medium-sized business might not need full-time human resources or recruiting staff, but during peak growth periods, finding the right people and developing the right skills and competencies is the key to a sustainable future. Bringing in a consultant with the expertise to find exactly the workers you need would be a wise investment.
As technologies change practically at the speed of light, companies need to innovate or be left behind — but many CEOs started their careers and businesses before many of these technologies even existed! Consultants can be vital for integrating new technologies, in particular mobile, app development, and cloud computing. CHALLENGES OF BUSINESSES ENTERPRISES
Grandpa’s generation certainly didn’t have to deal with terabytes of data or worry about what to do with it. 90% of the world’s data was created in the past two years and managing, keeping safe and extracting insights from the ever-increasing amounts of data your company produces needs to be in the hands of a qualified professional who can help you get the most return from that data.
In a world of instant gratification, customers expect instant customer service — and can take to the web to share their displeasure at less than satisfactory service just as quickly. Consultants can find ways to improve customer service and bring it into the 21st century.
In a similar vein, because customers can voice any displeasure so much more publicly and loudly than ever before, businesses have to monitor and maintain their online reputations. And while it’s an important task, it’s one best suited to a third party who can monitor and mediate with a certain amount of distance.
Knowing when to embrace change
Early adopter or late to the game? Consultants can help CEOs determine when to embrace change and when to stay the course. Not everything new is better, yet eschewing every change runs the risk of becoming obsolete. A professional outside opinion can make all the difference in these decisions.
We are living in an era of constant change for the foreseeable future: change is the new normal. Preparing for and embracing that change by investing in the right kind of advice is the best way to meet these challenges head-on.
It involves cross-border transactions of goods and services between two or more countries. Transactions of economic resources include capital, skills, and people for the purpose of the international production of physical goods and services such as finance, banking, insurance, and construction. International business is also known as globalization.
To conduct business overseas, multinational companies need to bridge separate national markets into one global marketplace. There are two macro-scale factors that underline the trend of greater globalization. The first consists of eliminating barriers to make cross-border trade easier (e.g. free flow of goods and services, and capital, referred to as “free trade“). The second is technological change, particularly developments in communication, information processing, and transportation technologies.
THE ORIGIN OF INTERNATIONAL BUSINESS
The integration and Growth of economies and Societies was the main reason for the first phase of International Business and Globalization.
Let’s try to understand major incidences that happened during the evolution of International Business or Internationalization
19th Century: The broader concept of the integration of economies and societies evolved
1870: Began first phase of Globalization
1913: GDP was 22.1
After 1913: Increased Trade Barriers to Protect Domestic Production
1919: World War I:
End of the first phase of Globalization, the Industrial Revolution in the UK, Germany and the USA
A sharp increase in the trade with import and export by colonial empires
1930’s: Declined Trade Ratio, GDP was 9.1
After the 1930s: World Nations felt the need for International Co-operation in global trade and balance of payments affairs
o Establishment of IMF and IBRD (World Bank)
o IMF: International Monetary Fund
o IBRD: International Bank for Reconstruction and Development
1947: 23 countries conducted negotiations in order to prevent the protectionist policies and to revive the economies from recession aiming at the establishment of the World Trade organization
1947: Establishment of GATT (General Agreement on Trade and Tariffs)
The 1980s: efforts to convert GATT into WTO
1995: GATT was replaced by WTO (World Trade Organization) on Jan 1, 1995
1990 – 2000: The Term International Business (IB) has emerged from the term International Marketing.
INTERNATIONAL BUSINESS AND CHALLENGES
International business means producing and selling goods and services between/amongst various countries. A business is said to be international if it produces in its home country and sells in another country. Or, it manufactures products in a foreign country but sells only in the home country. Or, it manufacturers in another country, but sells in home and foreign countries. Doing international business is appealing. However, doing international business has its own set of issues and challenges.
- Language Barrier
It is the most significant thing to take into account when thinking of taking business internationally. The language barrier doesn’t just mean a problem in communication. But, one must also consider if the name of the product fits well in the foreign language or not. For example, Mercedes-Benz when entering China chose a local name, which was similar to “Benz”: Bēnsǐ. However, in the local language, it meant “rush to death.” The automaker then has to change its name to Bēnchí, meaning ‘run.’
- Managing Global Teams
When you are doing an international business and have operations in many countries, you will have to deal with employees of different backgrounds. Managing those employees is definitely a challenge due to the differences in language, culture, and time zones. One can, however, overcome this barrier by frequently communicating with the global teams. It will help to slowly melt down the differences.
- Currency Exchange and Inflation Rate
The exchange rate is the worth of one nation’s currency in relation to the other. The currency rate between the two countries doesn’t remain constant or is always changing. You must consider the exchange rates when making any financial decision as it may increase or decrease the final payout which may affect the business profits. Along with the exchange rate, one also needs to consider the inflation rate as well. The inflation rate can vary across countries and can affect the pricing of the product.
- Foreign Politics and Policies
The politics and policies of a country play a crucial part in the performance of a company. Any new political policy concerning taxes, labor laws, and more can have a direct impact on the cost of the company. Thus, it is important for a company to closely follow the politics and policies of the country it is operating. For example, suppose the Chinese government starts giving subsidies to the local automakers. This would allow local companies to adopt aggressive pricing. Such policies would be unfair to foreign automakers operating in China.
THE FOLLOWING POINTS HIGHLIGHT THE THREE IMPORTANCE OF INTERNATIONAL BUSINESS.
(b) To Utilise Installed Capacity:
If the installed capacity of the firm is much more than the level of demand of the product in the domestic market, it can enter the international market and utilize its un-utilized installed capacity. In this way, it can export surplus production.
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(c) Legal Restrictions:
Sometimes the Government of a country imposes certain restrictions on the growth and expansion of certain firms or on the production and distribution of certain commodities in the domestic market in order to achieve certain social objectives.
(d) Relative Profitability:
The export business is more attractive for its higher rate of profitability. The higher profitability rate also gives extra strength to the firm.
(e) Less Business Risk:
A diversified export business helps the exporting firm in mitigating the risk of sharp fluctuations in the business activity of the firm.
“Around 5,200 years ago, Uruk, in southern Mesopotamia, was probably the first city the world had ever seen, housing more than 50,000 people within its six miles of wall. Uruk, its agriculture made prosperous by sophisticated irrigation canals, was home to the first class of middlemen, trade intermediaries…A cooperative trade network…set the pattern that would endure for the next 6,000 years.”Matt Ridley, “Humans: Why They Triumphed,” Wall Street Journal, May 22, 2010, accessed December 20, 2010, http://online.wsj.com/article/SB10001424052748703691804575254533386933138.html.
In more recent centuries, economists have focused on trying to understand and explain these trade patterns. Chapter 1 “Introduction”, Section 1.4 “The Globalization Debate” discussed how Thomas Friedman’s flat-world approach segments history into three stages: Globalization 1.0 from 1492 to 1800, 2.0 from 1800 to 2000, and 3.0 from 2000 to the present. In Globalization 1.0, nations dominated global expansion. In Globalization 2.0, multinational companies ascended and pushed global development. Today, technology drives Globalization 3.0.
To better understand how modern global trade has evolved, it’s important to understand how countries traded with one another historically. Over time, economists have developed theories to explain the mechanisms of global trade. The main historical theories are called classical and are from the perspective of a country or country-based. By the mid-twentieth century, the theories began to shift to explain trade from a firm, rather than a country, perspective. These theories are referred to as modern and are firm-based or company-based. Both of these categories, classical and modern, consisting of several international theories.