7 Small Business as Multinational Companies: Overcoming Barriers in addition to Finding Opp

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7 Small Business as Multinational Companies: Overcoming Barriers in addition to Finding Opp

Thornton, William, Metro Reporter has reference to this Academic Journal, PHwiki organized this Journal 7 Small Business as Multinational Companies: Overcoming Barriers in addition to Finding Opportunities Learning Objectives Underst in addition to the basic definitions of small business in addition to entrepreneurship Explain how small businesses can begin as global start-ups or follow the stages of internationalization Underst in addition to how small businesses can overcome barriers to internationalization Learning Objectives Identify when a small business or entrepreneurs should consider going international Underst in addition to how small businesses or entrepreneurs can find customers, partners, or distributors aboard Underst in addition to how new venture wedge strategies can be used in as long as eign markets Underst in addition to factors driving entrepreneurship at an international level

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What Is a Small Business “Small” business – many definitions UN: less than 500 employees The popular press: less than 100 employees U.S. small business administration has more complex definitions – Definition varies by industry, sales revenue, in addition to the number of people What Is a Small Business “Small” businesses – Over 98% businesses in Europe, N. America, in addition to Japan – Employ more than 50% of local populations – Produce nearly 50% of the countries’ GNPs – Create more than 2/3 of new jobs Internationalization in addition to the Small Business Two models – Small business stage model: process of following incremental stages of internationalization – Global start-up or Born-global firm: company that begins as a multinational company

Small Business Stage Model: Six Stages Stage 1: Passive exporting – Company fills international orders but does not seek export business Stage 2: Export management – Specifically seeking exports—usually rely on indirect exporting Stage 3. Export department – Significant resources dedicated to seek increased sales from exports Small Business Stage Model Stage 4: Sales branches – High dem in addition to justifies setting up local sales office Stage 5: Production abroad – Use licensing, joint ventures of direct investment – Difficult stage because of the risk of failure Stage 6: The transnational – Develop global integrated network Small Business Global Start-up or Born-Global Firms Key elements favoring global start-ups – Dispersed human resources – International sources of venture capital – The existence of a global dem in addition to – The lack of a geographically protected market – The necessity of worldwide sales to support the venture – The potential to avoid later resistance to internationalization

Exhibit 7.1: Major Differences on Key Aspects of The Traditional Internationalization Stages between Born-Global Firms Small Business E-Commerce Web sites offer a rapid way to go international Web site configured as long as e-commerce is low cost Quick way to sell across national borders Advantages of Small-Business E-Commerce Ability of small firms to compete with other companies Creates the possibility in addition to opportunity as long as more diverse people to start a business Convenient in addition to easy way of doing business Low cost to compete Makes domestic products available in other countries Utilize the Internet have higher revenues

Challenges of Small-Business E-Commerce Managing upgrades Language barriers Shipping in addition to returns Assuring security as long as a Web site Fraudulent activities online Receiving international payments Costs required to maintain the site Finding in addition to retraining qualified employees Overcoming Small-Business Barriers to Internationalization Liabilities of newness: a large percentage of new businesses fail within a year Liabilities of size: lack of scale to produce goods or services as efficiently as larger companies Overcoming Small-Business Barriers to Internationalization Managers’ limited international experience Managers’ negative attitudes – Belief that venture too risky in addition to not profitable – Competition seen as domestic – Ignoring of international opportunities

Developing a Small-Business Global Culture Global culture: managerial in addition to worker values that view strategic opportunities as global in addition to not just domestic Framework to underst in addition to international operations Small-Business Global Culture Characteristics of decision makers affecting development of a global culture – Perceived psychic distance to as long as eign markets – International experience – Risk aversion – Overall attitudes toward international strategies Developing a Small-Business Global Culture Changing attitudes of key decision makers – Being close in culture in addition to geography – Overcome skepticism regarding the international markets – Positive attitudes more necessary as long as global start-ups

Exhibit 7.2: Attitudinal Differences Concerning Internationalization Duties in addition to the Personal Life of the Small-Business CEO For small firm, opening new markets is CEO’s responsibility. CEO must bear social in addition to business costs – Increased travel in addition to stress from undertaking a new venture – Can adversely affect family life – Takes away from the daily management Exhibit 7.3: Training in addition to Knowledge Needs of Small Firm CEOs Entering Internationalization

Size in addition to Small Business Internationalization Size barrier to internationalization – Larger firms have more resources to support international operations Size is an issue only in the internationalization decision, however. Eventually, international sales intensity of small firms exceed that of big firms. – International sales intensity: amount of international sales divided by total sales of the company Small Business Advantage Speed becomes the small business advantage – Faster innovation – Can change products in addition to internal operations faster – Speed can overcome size disadvantages – Larger firms must often overcome bureaucratic procedures The Future: Falling Barriers as long as Small Businesses Barriers are becoming easier to overcome Government support programs as long as small businesses are increasing Trade agreements are making trade easier Increase in small businesses engaged in international operations also makes it easier

Thornton, William Birmingham News Metro Reporter www.phwiki.com

When Should a Small Business Go International If the following questions are answered positively, small business is ready. – Do we have a global product or service – Do we have the managerial, organizational, in addition to financial resources to internationalize – Is there willingness to commit resources to face the risks of internationalization – Is there a country in which the company feels com as long as table doing business When Should a Small Business Go International (cont.) – Is there a profitable market as long as product or service – Which country should be entered – Do we have a unique product/service that is not easily copied by multinationals or local entrepreneurs – Do location advantages exist upstream in the value chain – Can we af as long as d not to be a multinational Exhibit 7.4: Questions to Consider in the Small Business Decision to Go International

Exhibit 7.5 Steps in Picking a Foreign Market Getting Connected to the International Market Participation strategies – Same participation options as larger firms – Exporting, licensing, joint ventures, in addition to as long as eign direct investment – Most small businesses often emphasize exporting Finding Customers in addition to Partners: Customer Contact Techniques Trade shows Catalog expositions International advertising agencies in addition to consulting firms Government-sponsored trade missions Direct contact

Exhibit 7.8: Entrepreneurial Activity Ratings by Country Conclusion Small businesses are important aspects of economies of all nations Small businesses provide jobs, economic growth in addition to innovation Chapter provides crucial background in as long as mation on small businesses Chapter also discusses international entrepreneurship

Thornton, William Metro Reporter

Thornton, William is from United States and they belong to Birmingham News and they are from  Birmingham, United States got related to this Particular Journal. and Thornton, William deal with the subjects like City/Metropolitan News; Local News

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