During the last two decades, businesses have gone through the process of globalization, however, that has come to an end now and businesses that established an international standing have benefitted the most from it and have moved miles apart from their competition. Many companies like Proctor and Gamble, Volkswagen, and Peugeot have seen much increase in their growth as they have captured the international market by opening up locations around the world, which has resulted in an increase in annual revenue.
However, globalization is not completely dead. It has been molded into something more complex, with the previous forces still alive and well. The new and emerging international markets are the key to success for any business and during globalization, they must place themselves in such a position that they benefit from it after going through the process of globalization.
You might be wondering what your business can do to adapt to this era of globalization to ensure survival or to ensure your revenue increases and you can take advantage of such a process. Don’t worry, as today we are going to share with you what globalization is, and what businesses need to do to ensure their survival or to adapt to it. These tips are listed as follows;
WHAT IS GLOBALIZATION
The term globalization refers to moving away from a single country to being widespread across the whole world. Globalization in business occurs when organizations sell their goods and services to other parts of the world or locate themselves physically to other countries of the world to sell their merchandise and services. In short, it can be said that a country becomes globalized when it extends its operation from a single country to multiple countries around the world. As more and more businesses are becoming globalized, the competition has become tough in the international market. Making themselves global can be a difficult process for any business as they have to move certain commodities, services, and merchandise to another country. This can be accomplished by using Land Freight Forwarding to transfer goods and other business-related things to another country.
Small businesses are the ones that find it the most difficult to adapt to such a change as they lack the funds to become global and spread their operations around the world. However, there are certain things that a business can do to take advantage of it.
Companies such as P&G is one of the biggest in the world and has positioned itself in a great way globally, what they have done is made certain products that are required by a certain country. Their strategy has been to make certain products that are demanded globally and avoid selling the local ones globally. This way they have kept their production costs down. Things they do not sell globally like food and toiletries are made locally and sold locally. Medicine is something that they have chosen to sell globally and they are benefitting the most from it.
At the end of the day, it is all about positioning your business in such a way that your products sell in a country you have set up shop. If you are a small business facing the process of globalization, it is a good idea to go regional first, then after a while extend your business globally. The bottom line is, whatever your geographical positioning maybe, your approach should be dependant on the products you sell and which country can benefit the most from such products. The more a country requires certain products the more it would be beneficial for you to create and sell such products.
DEALING WITH CHANGING CONDITIONS AROUND THE WORLD
You might be a company that is familiar with your local market, however, the international market is a different story. The international market can be subject to many different changes like governments imposing different taxes, different rules, regulations, different standards to maintain, or different types of laws that pertain to the movement of goods from another country. Political issues can also be a major reason that could lead to strikes or boycotts. The fact of the matter is, the international market is something that you will not be familiar with and how it behaves will be out of your hands.
The bottom line is, your company should be agile enough and adaptable to whatever changes that take place and implement quick measures to counter such issues. The best way is to set up a ‘radar’ that monitors such changes and issues, so you get informed beforehand and implement certain countermeasures to avoid such catastrophes and issues. This way you will have a better knowledge of how to go about your strategy and change it whenever it is needed. Another thing you can do is set up joint ventures with local companies so you don’t have to bear anything alone when certain economic calamities hit your business. Having a partner will allow you to share the burden financially and you will also have more experienced people that know their country’s market and they will guide you on what to do to avoid such issues and problems.
ORGANIZE YOUR BUSINESS
With more and more businesses becoming globalized, their structure has become more complex and they have become difficult to organize. Therefore, if you try to manage your business through one hierarchical system, one headquarter, and one team, you are bound to fail. A good idea would be to set up different headquarters in different countries where you are operating. By doing this you have a better chance of succeeding as things won’t get messed up as decision making for operations in a certain country will be left on the team that has been assigned to that specific country. Staff and employees that are locally in other countries will not have any say in that specific team’s decisions.
By doing this, things will be simple and hassle-free and decisions will be made quickly without intervention. The bottom line is, you should consider developing sub-headquarters and units and assign them to specific countries. That way you can make sure that, at the end of the day, they all answer back to you, and don’t have any involvement with each other. Also, separate units can be easier to manage than a pool of people handling all aspects of every single country.
DEVELOP A GLOBAL CULTURE
For owners of global businesses, it is crucial to create a sense of unity and a common set of values for their employees and corporate team. Furthermore, it is also important to create a diverse working environment. To do this you will have to strike a balance between global imperatives and local ones. Many businesses try to implement the same criteria of hiring staff from the same schools and universities, however, this approach can be disastrous. You need people who see the world differently and have different qualities that focus on the specific country you are setting up shop at.
It is a good idea to hire people from the country you are extending your business in. This way you can create jobs and help the community get to know you positively. Many companies are doing the same by hiring staff from the countries they have set up their headquarters in. This will lead to a more competitive business environment and your employees will work at their best to try to improve themselves daily.
LEADING A GLOBAL BUSINESS
Running a global business is not an easy job. To do everything properly, you have to understand every aspect of your business and what goes on in the country your business is situated in. You cannot get this information from your corporate radar, however useful it may be. The best way would be to travel to specific countries and your business locations to get a better understanding of what is going on. If half your business is being operated globally, then you will have to spend time on the road at least 5 times a week.
Along with other things, you will also have to be a leader. You cannot do everything by sitting at home and waiting for your global staff to respond and give you updates. You will have to be hands-on with everything. As a leader, you will have to lead by example. Your employees will learn from your behavior, if you slack off, it will give them a reason to slack off as well. At the end of the day, you have to develop your leadership skills, if you lack them, convey your message to the locals in a respectful way, delegate certain important responsibilities to your country managers that report directly to you, and most of all be present physically at your business’s location, being hands-on with everything.
THE FINAL WORDS
Smart and thoughtful decision making is really important in this era of globalization and certain practices should be implemented to ensure a business’s survival. To expand your business in other parts of the country, you have to have an understanding of that specific country’s local market and what the cultural differences are, as they can vary from country to country. You will also have to be wary of any economic and political situations and take them into account if you are thinking of expanding globally. Today we have made you aware of what a business needs in the era of globalization, hopefully, you will take these practices into account when you decide to take the next step and globalize your company as it can make or break your business.