The international market in the present times has been growing and diversifying at a very high pace. The ever increasing number of players and the fierce competition which currently prevails in the global market directly emphasizes on operating with expertise. In spite of the requirement to operate in such a strict fashion, an increasing number of corporates from all over the globe are entering the international market. It cannot be denied that the international platform offers many lucrative options for the companies to go global. Some of the primary incentives which are essentially responsible for persuading these entities to expand in the international market are easy achievement of economies of scale. The only reason behind this is the size of market which is much larger than the domestic markets of different countries. It cannot be denied that the incentives offered by the global market are extraordinary in comparison to domestic market. Moreover, functioning in the home market often imposes restriction on different aspects and limits the operations of an entity within a particular sphere (Govil and Rashmi, 2013). Furthermore, global market also enable the companies to reduce the overall production costs for different reasons such as availability of labour at a cheaper cost, circumvention of trade barriers and so on. In addition, the companies are also enabled to access an increased number of the consumers which are highly diversified in nature.
However, it is also true that not every business entity can go global and survive. The manner in which economic globalization is considered as one of the best hopes for ensuring stability, it also viewed as one of the biggest threats. The international market is comprised of varied trends which are all exclusive of each other and it is not possible for a company to survive in this unknown world without understanding the different complexities involved. It is imperative for every organization to assure its own capabilities before entering the international market and become strong enough to resist the tremendous pressure persisting from varied sources (Spence, 2011). In pursuance to the same the present discussion is an effort to illustrate some of the prerequisites which every corporate shall undertake before stepping into this highly complex and vast market. Moreover, the discussion shall also enumerate certain considerations which an entity shall comply with before entering into a transaction at the global platform and the ramifications of Non-Compliance.
Prerequisites For Entering Into Global Market
Before an organization embarks into an international market, it is highly imperative for them to prepare themselves to be able to deal with differing forces of market and trends never witnessed before. In pursuance to the same it is imperative for the management to understand the specific cultures which it is going to deal with, traditions and customs, demands and so on. This shall only enable the entities to tailor their product in accordance to the needs of the new customers. Moreover, it is also crucial for the management to identify and effectively communicate the primary motivations which persuaded them to undertake the decision of entering the global market (Rodrik, 2011). Moreover, it shall also be assured that the current strategies which are being used for operating in the domestic market are also modified or replaced to adapt the trends of the new international target market. Some of the specific measures which shall be undertaken for entering the international market are
Understanding customs and trends
One of the foremost requirements is that the management shall educate itself and the employees in respect to all the customs and trends which exist in the common business parlance at the international platform (De Loecker and Goldberg, 2014.). Every market has its own way of working and manner of behaving with other players, similarly the international market also has certain business etiquettes which are peculiar to this market, and are essential for every player to follow. In pursuance to the same it is highly crucial to be informed about the history of the particular nation, and the customs as well as traditions which still prevail. This shall enable the company to better understand the market and the genesis of different forms of behaviour. In addition, the management through this manner shall be able to innovate some products and services suiting their demands and requirements in a more appropriate manner (Gorodnichenko, Svejnar and Terrell, 2010). Moreover, it is also essential to know the prevalent format of communication through various means, the timings which are preferred for working, the way of greeting people and so on. Only after adapting this behaviour the concerned organization can become a part of international market and be able to understand the varied forms of gesture.
In addition, the concerned personnel of the organization shall be able to overcome language barriers and understand the common jargon and phrases which are prevalent in the market. This shall not only enable the company to understand the information being transmitted from the host country's end, it shall also establish a clear and effective system of communication between the respective parties (Outlook, 2010). Understanding the culture in an enhanced manner shall not only customize the different strategies being formulated, it shall also remove the marketing barriers which the company may face. It is important to understand that marketing is one such function which is highly dependent on the culture and beliefs of the community. Thus arises the need to understand the culture in an effective manner so as to effectively promote the product or services in the market and leave a strong message in minds of potential consumer. For instance, comparative marketing is one such concept which is condemned or disapproved in certain jurisdictions; however, there also exist markets which accept comparative marketing. In addition, there are various legal barriers which exist for foreign players for entering into certain markets (Gerber, 2010). There could be imposition of additional taxation, custom duty, restrictions on import and so on. Therefore, it is imperative for the management to include all these costs in the decision to enter global market and be prepared to face the same. Thus, is it imperative for the business organizations to educate themselves effectively with all the prevalent trends and customs to gain a better understanding.
Understanding the dynamics of market
Economy of the nation plays a highly crucial role in determining the fate of any business, especially if the company is operating in a foreign market. This shall enable the business corporates to stay prepared for all the uncertainties and contingencies which may arise in the due of course of time (De Mooij, 2013). Moreover, the company and its management design and develop strategies considering the dynamics of the market. For instance the company prepares a business plan which has the potential to explore the opportunities at an optimum level. However, the same plan when being executed after few months may not be able to reap the desired results as the forces of market may have been changed. Thus, arises the need to foresee the trends and opportunities which may arise in the market over the period of time (Competing in a Global Market – What’s Your Competitive Advantage?, 2012). In order to ascertain the future trends in an effective manner it is essential to understand the historical data of various fluctuations being subjected to the market. Some of the specific data which shall understood by the companies are in relation fluctuations in the currency value, the timelines of export and import and so on.
In addition, it shall be imperative for the companies to understand and be aware of different form of marketing barriers which exist in the market of host country. It has been known that this element is deeply connected to the cultural values of the region. For instance certain markets shall prefer to order a meal to go, on the other hand, other markets shall prefer meals with leisure and comfort. Thus, it is highly crucial for businesses to be aware of these forms of preferences which may not be written anywhere, but could be deciphered only after analysing the trends in the market. Moreover, the manner of advertising, the form of messages and content shall be required to be modified after considering the ongoing trends and emotions of the market (Matanda and Ewing, 2012). Moreover, the channel to be chosen for promotion may further be modified on the basis of educational patterns and the demands of potential consumers. For instance there are certain jurisdictions which allow comparative advertising, while others may consider it destructive for the market. Therefore, there are numerous aspects which the business entity needs to consider before entering into global market, which is completely unknown to the company.
Understanding Competitive Landscape in Foreign Market
In order to attain a competitive edge in the market it is imperative for the companies to undertake an effective analysis of the competitive landscape of the concerned market. Analysis of competitive landscape of a market enables a company to identify the existing rivals which exist at different levels of a market. For instance this form of analysis may commence with identification and understanding of the current competitors (Boone and Kurtz, 2013). One of the best and effective strategies to compete with the competitors is to understand the measures which have been deployed by them to capture a significant portion of the market. In addition, it is also required to ascertain the strengths and weakness with which the entity is operating in the market. Once all these determinations are made, the company may decipher potential areas which may have a scope for improvement and enhancing the processes being undertaken by the companies.
Moreover, attaining a competitive advantage in an alien market is a highly complex and difficult process (De Mooij, 2010). This could be either achieved by entering into a niche market. The company shall be able to grasp a foothold in the market through delivery of unique products which caters to the need of a specific group or niche group of consumers. This shall require the company to effectively identify such a niche market, understand the needs and areas which are still unexplored. Some of the specific measures which shall enable the company to effectively tap the niche market are usage of high and advanced technologies as well as production systems in producing products in small batches. Another measure could be targeting a small segment across large markets which shall generate enormous profits (Leidner, Alavi and Kayworth, 2010). Lastly, focusing on a niche market shall be a stepping stone in any of the mainstream market, especially in the case of foreign markets. However, if the company is not willing to target a niche market, then competing in highly crowded markets shall require supreme quality products which can be delivered at low cost to the end users. This shall enable the business to form a space for itself within the intensely competitive markets. All these decisions shall also be dependent on the needs and demands of the target market and the manner which is most suitable to address each of the issue.
Global market exposes a business enterprise to various clients which may come from a different background or have a distinct set of expectations from the services being provided. Thus, international transactions require a corporate to undertake an effective risk management mechanism so as to be prepared to face any form of uncertainty. However, there are many other aspects which shall be considered by organizations before indulging into such global relations. In pursuance to the same it can be stated that risk management merely constitutes to be the first step for being cautious and alert (Mander, 2014). It is imperative to identify all the possible uncertainties before they cause any form of loss or injury to the business. Hence, in order to assure no such disruption is caused to the developmental process of any enterprise, the following compliance considerations shall be undertaken by the organizations.
Know Your Customer
It is a process which requires the business enterprises to identify and verify the specific identities of all the clients which they purport to transact with, across the borders. The primary rationale behind imposition of this process is that it is imperative for the organizations to assure the existence of an actual client. In addition it is also essential to understand the financial background of the customers so as to leave no scope for any form of uncertainty in the transactions. It has also been observed that this process is also employed by the corporates of different sizes to ensure that the concerned client is compliant of anti-bribery (Trompenaars and Hampden-Turner, 2011). Thus, the fundamental objective behind employment of this process is to protect the business from being exposed to frauds or misrepresentation in an intentional or unintentional form. Thus, in addition, it also ensures customer being dealt with is free from any form of criminal element and is capable to undertake financial dealings in a reasonable manner. On the basis of all these ascertainment an organization is able to manage its risks in a prudent manner. In pursuance to the same, every business enterprise intending to transact with a global consumer shall frame or develop its own Know Your Consumer (KYC) policies so as to follow a consistent approach towards all its stakeholders (Rosenbloom, 2010). A KYC policy is usually incorporated with certain elements which are in the nature of a customer policy, procedures for ascertaining and verifying the true identity of a customer, installing an effective mechanism for monitoring the entire transactions and lastly, a holistic risk management mechanism. Though the list of these elements is not exhaustive in nature, it represents the major components which shall be incorporated within the policy to make it effective and efficient to fulfil its fundamental objectives. One of the important facts which need a mention is that when transacting at an international level, the business organization is surrounded by varied forms of uncertainties which have the potential to disrupt the business at a major level (Shin, 2010). These ambiguities arise from the facts that the company is not known to the manner in which the host market operates common business trends and customs, expectations of customers, financial history and capacity to undertaken commercial transactions.
Enhanced Due Diligence
In furtherance to KYC Enhanced Due Diligence (EDD) shall also be required as the customers and level of transactions in such cases is much larger. In accordance to these processes efficient due diligence policies shall also be developed in order to detect and report instances which are questionable or not favourable in nature. Another factor which needs to be considered in this context is that the rules and regulations in any one jurisdiction cannot have a global prescription and hence the companies are positioned to liability for standards which are differing to the applicable regulatory environment (Dauvergne, 2010). It is further important to state that employing EDD over and above the process of KYC shall ensure a robust as well as rigorous investigation procedure in respect to understanding the customer. Moreover, it shall also cater a reasonable assurance in respect to the validity of customer’s identity, ascertainment of relevant information or data which is adverse in nature. The business enterprise by deploying the EDD shall also be able to understand and authenticate the profile, commercial activities, business and such other elements. The specific characteristics of the process of EDD are:
- The findings and steps undertaken shall be documented for future reference. However, the management is required to ensure that the process shall be scalable and proportionate to the level of risk or resources deployed for a particular transaction (Agarwal, Malhotra and Bolton, 2010). In addition, it is also essential that the entire process is consistent, accurate and thorough
- The process is conducted on the basis of certain data and information which is required to be reliable and valid in nature. In pursuance to the same assistance shall be taken from Commercial Intelligence Companies which operate in the country of respective consumer and makes available information from their comprehensive database.
- Relevant adverse information refers to such data which has a direct or indirect indication of involvement of the customers into such activities which are either criminal or fraudulent in nature (Solomon, Russell-Bennett and Previte, 2012). Hence, it shall determine if the customer is attached with any form of detrimental activity, which has the potential to cause harm to the business in any form.
- The primary benefits which shall be produced by undertaking these activities are mitigation of regulatory, financial and reputation risks, which may be imposed on the operations a business enterprise (Jones, 2011). Hence, this shall amount to be the first stage of the entire process of risk management which require the companies to ascertain the risks and the extent to which they have potential to make detrimental effects.
Suitability or Appropriateness
When targeting a particular segment of market it is crucial for the market to ascertain if the concerned product is suitable to the needs of market and is appropriate to cater to the specific requirements. Determination of the same shall be done by ascertaining the local trends and modifying the products or services in accordance to the needs and requirements. In pursuance to the same a company shall be required to undertaken an effective survey of all the target customers (Gillespie and Hennessey, 2010). This could be done by offering them samples of the product to be launched, as this shall enable the company to understand the precise reaction of the costumers, in terms of how satisfactory the features of the product were for the concerned customers or whether they would prefer the product with certain form of modifications. The company through these measures shall be enabled to ascertain the precise preferences and tastes of target market. Therefore, every move or strategy of the business shall be warranted only by ample research. On the basis of findings and determination of a survey the company can introduce small modifications in the packaging, distribution channel or targeting a distinct customer niche. This shall also tweak the plans which are developed by the company for marketing the products (Peter and Donnelly, 2011). Therefore, with the assistance of these surveys and research the company shall be enabled to understand the prevalent local trends and demands, and on the basis of same shall develop a product which is suitable for the kind of customers which exist in the market, and is appropriate enough to cater to their specific demands. By considering the factors of suitability and appropriateness of the product and attaining a deep knowledge in respect to the same, a business enterprise shall be able to successfully position itself on path of growth.
Expanding on a global platform infers that it is essential to make an effective communication of all the information and messages which are necessary for undertaking the transaction and selling the product. In addition, operating in a foreign land shall also mean introduction of the product to the target consumers, in the local language, which might not be known to the management in a thorough manner. Unless a person is not comfortable with a particular language, he/she can never persuade others to buy their product (A 5 Step Primer for Entering an International Market, 2011). Therefore, communication occupies a highly crucial role in determining the success of any business. It is further important that the consumers and other dealers are able to understand what the company is trying to say and is persuaded enough to make the purchase. Thus, arises the need to be appraised with cultural, social, linguistic and politic situations prevalent in the targeted market. A preliminary research is required to be undertaken by the business so as to establish a clear and direct connect with the consumers. Only after being aware with the mentioned factors the company shall be able to persuade the target market to purchase their products. Informing the consumers in their own language and through usage of local terms, which the market is already accustomed to, shall give a sense of familiarity and security to the consumers and enable them to develop trust for the concerned products. Therefore, an effective communication strategy shall be developed by the company which shall be inclusive of development of brochures, leaflets, websites, newsletter and such other elements in the local language of target market (Wu, 2011). In the event the management of the company itself does not learn the language and decides to hire a translator for the same, it may have to face unforeseen difficulties. For instance, the translator may not be able to translate every content by communicating the precise intention or view, thereby transmitting wrong or not so precise information.
When dealing with a consumer in the foreign land, it is highly imperative for the business enterprises to adopt sales practices which are fair as well as clear in nature. After understanding the communication modes and culture prevalent in the target market, it is imperative for the concerned entity to develop sales practices which are able to reach maximum number of consumers and is completely in consonance with their culture and business trends. Moreover, it shall be assured that the company is completely in compliance with the applicable consumers laws of the nation (Adams, 2011). For instance the Consumer protections/rights Act which is prevalent in the concerned country or the other regulatory requirements which the government imposes on the corporate world. This implies that the company shall be required to undertake a complete analysis of the consumer as well as competition laws before introducing its product in the market or even developing a strategy for marketing in the concerned market. Moreover, it is also vital for the companies to assure that all their actions are ethical and lawful in nature. In pursuance to the same, the companies may develop a code of ethics and conduct, which shall be in consonance with the cultures and traditions of the host country. In this manner, the management shall ensure that these ethical considerations are inculcated within the general working practices of the entire organization. Moreover, it shall promote practices of high standards and reduce the risk of breaching the applicable norms (Ethical Sales Practices, 2016). Demonstrating ethics in the sales practices shall also enable the enterprise to earn trust as well as loyalty in the target market and build a strong brand reputation. In addition, it shall also eliminate the possibility of attracting legal or any other form of liabilities on the business, thereby reducing the risk factor to a significant level.
This is one of the fundamental and highly complex portion of the marketing efforts which are undertaken by the company in order to reach to their target consumers. In effect, it reflects all the measures employed to transmit the information and messages in respect to the product. Some of the specific constituents of this form of communication are advertising, public relations, networking, personal selling, direct marketing, sales promotion and so on. It is highly critical for a business enterprise to ascertain appropriate marketing communication strategies to effectively reach the consumers and make them understand the value of their product as well as services (In Today’s Global Marketing Environment, Familiarity with Your Customers is Essential, 2015). Moreover, in order to attain consistency in the operations and developing a global brand message, it is crucial for such companies to develop a coordinated strategy both at domestic and global level. The primary objective of Marketing Communication is to successfully sell the product or service to the target consumers and undertake such activities which has the potential to stimulate the foreign consumers to purchase the product. These could be in the form of in-store demonstrations, displays at various stores, distribution as samples or gifts with other products. A company expanding in the global market shall make an application of the marketing communication through the following techniques – Customer Segments, Distribution Networks and Sales Force. Advertising at the global level is highly sensitive to the cultural differences which exist among the nations (Terpstra, Foley and Sarathy, 2012). Therefore, utmost care shall be taken while advertising in the global market, as the response of the consumers shall be derived from their value system, beliefs and perceptions. Moreover, this also infers that it is very important to be precise and clear in communicating the messages and information, so as to enable the audience or the potential consumers to not commit any form of error while understanding the intention of the company.
Conflict of interest
This is the situation wherein a person or business organization is attached with more than one area of interest, which at the same time is in conflict of interest of the consumers or the target market. Before indulging into transaction with consumers from a different country it is highly important for the concerned company to ascertain the interests of all the stakeholders to assure non-existence of a conflict of interest situation. Avoiding of such situations is a necessity because it creates a large possibility of creation of risks over the professional judgement of the people involved in the process (Leidner, Alavi and Kayworth, 2010). In other words, there is possibility that one set of circumstances has an influential impact on the other set of interests, thereby leading to a detrimental situation. Therefore, the company expanding its operations in another nation or at an international level shall stay devoid of such situations, because it may have an impact of compromising on the interests of either the consumers or the target market, thereby incurring significant amount of losses.
Striking the right balance
Every strategy and policy shall be developed by the company to ensure an intimate customer experience, if the company intends to capture a majority of market share. This shall take the supreme position in the operations of the company, and in pursuance to the same every effort shall be made by the company (Wu, 2011). One of the important considerations are development of a skilled and dedicated team who strives to attain excellence. Support from highly motivated and dedicated workforce shall enable the company to realize an enhanced level of production both at micro and macro level. Moreover, the quality of the product shall also be enhanced with the support of a supportive workforce. Therefore, every effort shall be made by the company to ensure development of a dedicated workforce and a quality product. However, it shall be assured that the level of investment required in these objectives is within the limits to allow the company to sustain in the market with financial stability. It is an established fact that if a business intends to prosper, attainment of financial stability occupies an important position. Therefore, the management shall strike a balance between the enhancement of the quality of product and amount of investment being made to expand in the new market (Boone and Kurtz, 2013). Moreover, a highly diversified team shall be developed by the company, which is able to address issues arising from different aspects of market. This shall further enable the company to analyse demands of the consumer from different perspectives and make a deduction in the form of a highly effective strategy.
Market Conduct and Market Abuse
International transactions are undertaken only if the other party is reliable and stable in its performance. This perspective is held both by the company as well as the customers who are involved in the transaction. From the view of a customer it is imperative that the company with which they are going to deal with is secured and stable both in terms of their economic viability and performance. In pursuance to the same, it is imperative that all the operations of the company are in compliance with the applicable legal framework as well as ethics. It has been observed that apart from the regulatory requirements, the consumers tend to prefer entities which are conducting themselves in an ethical manner (Lasserre, 2012.). Therefore, such companies who intend to target international market shall develop a code of ethical conduct. In pursuance to which all the operations of the company shall be in compliance with the ethical requirement. Moreover, it is important to understand that the value and ethics may differ from region to region and dealing with an international customer means being applicable to their set of ethics. In consequence to same all the operations of company as well as conduct shall be in compliance with set of ethics of both the jurisdictions.
Apart from the ethical conduct, it is also essential that the entities shall ensure that all its policies and strategies are not anti-competitive in nature or may have an effect of disrupting market competition. In other words, the business enterprise shall stay away from activities which are in any form abusing the market. Market abuse comprises Insider Trading, Market Manipulation, spreading rumours and such other activities which have the effect to disrupting the market conditions or are misleading in nature (Wheelen and Hunger, 2011). Insider Trading refers to directly or indirectly using a confidential information to generate personal benefits. In order to make a person liable for insider trading, it is necessary to establish that the concerned entity was not entitled to make use of the information in this manner. Market manipulation is another aspect which refers to trading on the basis of deceptive strategies so as to manipulate the market. Moreover, the company shall at no instance make statements which are false or misleading in nature to assure compliance with regulations. It is imperative to understand these activities may have an impact on reputation of the company which has a direct bearing on the decision of a consumer to enter into a transaction.
Execution of strategies occupy a highly crucial position for achieving business goals and objectives. It has been observed that successful and effective execution of strategies is one of the major concerns which are being faced at a universal level. Development and formation of strategies constitute to be only half of the task, the rest of the part is constituted from execution of the strategies (Kvint, 2010). The success and performance of a company is dependent on effectiveness of the process of implementation of these strategies. It is important to note that if a company consists of an expert team for development of a strategy, it still may not be able to attain success if the team responsible for execution if not efficient enough to implement the plan or strategy in an appropriate manner. Moreover, execution of strategies is also dependent on the customer needs and demands. Thus, in pursuance to the same it is imperative for the companies to determine and understand preferences and demands of the global consumers who are being targeted by the entity. Fluctuating market conditions and customer needs influence the manner in which strategies are developed and executed. Therefore, there arises a need to undertake planning and execution of strategies by the same or mutually dependent team. Practically speaking formulation of strategy and implementation are two separately distinct tasks enumerated in the process of strategic management (Hitt, 2011). If viewed in a logical manner, implementation follows the process of formulation, and it is impossible to implement strategies till they are formulated. However, in order to assure successful execution in a business enterprise, overlapping the processes of planning, execution and adaptation shall enhance the effectiveness with which the entire strategy is executed. The interdependence of these two areas of strategic management process shall improve the possibility of desirable outcomes of execution of the strategy. Considering the fact that the company is required to make an implementation on the global level, it is highly imperative for them to develop an approach which is the best suitable for circumstances (Khanna and Palepu, 2013). It has been observed that if the persons responsible for executing a strategy are not involved in development of the same strategy, there may be various risks which the process shall be prone to.
In order to produce the best results from execution it is imperative for the companies to understand the fact that it is a dynamic and adaptive process which is prone to unanticipated events. These imperatives tend to challenge the personnel responsible for executing the entire strategy. Moreover, the time duration consumed for implementation of a strategy shall require time frames which may be highly prolonged in nature. In consequence to which there is a high possibility that the managers may be detracted from the primary goals, especially if the execution is being undertaken in a completely different jurisdiction. In order to respond to all these issues in an effective manner, the management shall install appropriate mechanisms keeps the concerned personnel abreast of any form of external shocks and amendments (Ford and et. al., 2011). Moreover, a control mechanism shall also be installed in order to generate feedback of the entire process of executing the strategy. In furtherance to the same it shall be assured that not many people are involved in the process of execution, as it increases the level of complexity involved in communication. In addition, it may become cumbersome to link strategic objectives with the daily objectives at different hierarchical levels. Therefore, in pursuance to the same companies before transacting with global consumers shall develop a separate team who shall be responsible for formulation of the strategy as well as implementation of the same (Lewin and Volberda, 2011). This shall reduce the complexity level involved in communicating at different levels.
Ramifications Of Non-Compliance
Non-compliance with various regulatory and ethical requirements by a company, entering an international transaction, has an increased probability of facing serious liabilities and consequences which may also be deterrent to the structure of an organization. Some of the potential elements which the company may have to face in result of non-compliance are increased risk of detection along with sanctions imposed in the form of high penalties. In addition, the businesses may also be subjected to certain enforcement measures which may require payment of compensation to the tune of damages sustained by other parties. It has also been observed that certain violations of law may attract criminal liabilities of the companies or individuals involved in the alleged act of non-compliance. These forms of breach may attract international authorities to regulate or investigate into the case. Thus, in pursuant to fact another ramification which may be imposed by the burden caused to the operations of company by being subjected to investigative measures by the concerned authorities (Schlinke, Jennette, and Stephanie Crain, 2013). It shall be stated that these investigations are cumbersome processes which may consume significant time and cost of the business. Moreover, there is a high risk of damaging the reputation, which is turn may be followed by hostile reactions by the global consumers, thereby further impacting the overall value of the firm. Apart from the other legal requirements, infringement of ethical and moral values may also hamper the business in a detrimental form.
Entering into an international transaction without ascertaining the whereabouts and authenticity of the customers has the potential to generate extreme amount of uncertainty and repercussions which may hamper the business (Cocheo, 2011). With assistance of this process the business enterprise is enabled to determine the financial and operational viability of the concerned party. It is often stated that the cost of conducting due diligence is far overweighted by the expected or anticipated benefits which may be generated and also by elimination of risks which may arise on failing to conduct the process of due diligence. Moreover, it is important to state that though the entire risk may not be eliminated by conducting due diligence, there is high probability of detections of any form of risks which may be existing. KYC is another tool for better identification of customers where it hereby depicts the verification procedures of the organisations carried to acknowledge the intent of their transactions all across the border. It is together in consideration of yet another fundamental importance where the client getting into the transactions should depict a factual identity. However, in case of breach in this undertaken policy of KYC, this may lead to some severe consequences like paying for AML fines for being offensively responsible for the breakage of such potent concern of verifying client's realistic identification (Kavali, Nikolaos and Michael, 2009). It is where such ignorance is mostly apparent to allow some fraudulent individuals to get into official transactions with an erroneous identification by together making fallacious use of the other consumer details. It is thereby important for the official bodies of an organisation to properly guide their deputed employees with regular training measures to develop their knowledge for a likely maintenance of customer details by together confirming it with a more vigilant outlook.
Dealing with customers from another jurisdiction, raises an important concern of uncertainty and unawareness in respect to prevailing trends and preferences. Targeting a customer without knowing their taste and preference shall not yield any benefit as it would fail to attract the customers towards its product or services. Moreover, entering into a new target market requires a business enterprise to establish its brand among the huge number of companies already existing in the market. One of the best measures to assure the same is supplying products or services which is able to specifically cater to needs and requirements of the market. For instance targeting a niche market, by provision of products which exactly match their needs shall has high probability of success. However, in order to implement such a business plan it is important for the management to ascertain the specific requirements which shall be able to attract the attention of market. Building a brand in a new market requires the product or service to be precisely suitable and appropriate to the needs of consumers (LeClair, Thorne and Linda, 2010). Thus, in the event the company fails to adhere to the requirement of this consideration, it shall not be able to position itself in a new market, thereby, even making survival an issue.
Another prime consideration which every company entering into international transactions shall abide by is of establishing an effective mechanism of communication. In international transactions communication occupies a highly crucial role in determining the success of any business enterprise. In pursuance to the same it is highly important for the management to be fluent in the language which is prevalent in the concerned jurisdiction (Poska and Ballard, 2010). In the event of not being able to understand the language being used in the target market, the concerned company shall never be able to understand the true nature of trends and preferences of such a market. This in turn shall hamper the understanding of company in respect to the target customers, and impact the effectiveness of the strategies. Therefore, non compliance with the consideration of communication shall also hamper the process of positioning the brand in the new market. Similarly, to assure right communication of the intention to the consumers it is imperative for the organization to make a communication in a language which is understood in the target market (Webb, Dan and Steven, 2013). In the event, company is not able to perfectly understand the language it shall not be able to undertake effective promotional activities. The rationale behind the same is that advertisements and promotions undertaken in the local language gives a sense of familiarity and security to the consumers. Thus, not adherence of this consideration shall also hamper the marketing strategies of the company. In furtherance to the same it is also essential for entities to adopt sales practices which are in compliance with all forms of regulatory and ethical requirements (Pawlak, 2010). Violation of these considerations shall directly impact the business of the firm by attracting attention of competition or other authorities. In pursuant to which an investigative process shall be carried out to ascertain the violations undertaken by the company. These process could be highly cumbersome, thereby requiring investment of time as well as finances. Further, in the event the company is proved guilty for any of the offences, liability may be imposed under Consumer Protection legislation or any such statute which has been breached. In consequence, the business shall be required to pay high penalties or/and compensation for any nature of injury or loss sustained by other parties. It is important to note that non – compliance of these considerations shall not only attract legal liabilities, but shall also impact the reputation of the firm, thereby impact the purchasing behaviour of consumers in respect to the concerned product.
The undertaken strategies of an organisation plays a greater role in depicting an enhanced business structure. It is however with a prime consideration of applying those strategies in the best possible manner as a way of achieving the organisational goals and objectives on time. Whereas, there exists a large number of business establishments who often deals with a problematic state to properly execute there actions plans in an effective manner (Kaufman, Brian and Gary, 2013). It is where execution is referred to be a foremost consideration of an enterprise rather than its development. Herein, executing strategies is mostly concerned with a prior fulfilment of consumer’s needs and demands where for this particular tact, the organisations must hire an effective team for the same. However, in case this particular tactic of execution is being ramified, then the enterprise may face a tremendous loss by getting fail in corresponding to the latest market trends where execution is entirely based on fulfilling the imperative needs and demands of the users. As a result to which, they may together deal with a non profitable state by negatively impacting upon their targeted intent of positioning at a gainful position.
On the basis of another influential consideration namely market conduct that means to pursue the prevalent trends of the market by undertaking the exact pricing structure and policies dominating over there. This is referred to be another most considerate way of fetching the interest of a large set of consumers where a prevailing market structure is in accordance to the factual needs and demands of the users in the market (Culnan, Mary and Robert, 2013). It is where the market conduct in turn impacts upon the undertaken decisions of the sellers by framing accordant strategies for compatibly serving the consumers. However, the ramification of this particular consideration may directly result into the failure of retailers in selling their goods and services where there offered commodities will not intend to match with the dominating trends of their market. This in turn will directly impact upon their earnings where they will fail to meet out their targeted goals. Another prompt consideration is to strike a right balance where the firms are hereby required to opt for a balanced perspective to serve their users in such a way that not only enhances their satisfaction level but together escalates their earned revenues and market shares. It is however on ramifying this pertinent consideration. This is for instance the companies are only concerned about benefiting themselves with more earnings without considering to benefit their customers, then this may lead to destruct their brand image (Takas, 2014). Where on another hand, they only concerned about fulfilling the realistic preferences of their consumers with a low priced strategy with no economic benefit for themselves may also bring them to the state of bankruptcy. Lastly, there exists conflicts of interest where the venture may get into adopting two or more practices without concentrating upon the fulfilment of a single tact. This in turn results into a perplexed situation where the organisations duly gets confused about their targeted set of users. This practice should be in turn avoided by the entities as a way of operating into a balanced orientation of their work operations.
The international market is framed of varied trends which are all exclusive of each other, thereby making it impossible for companies to survive in this unknown world without understanding the different complexities involved. In pursuance to the same it is highly imperative for entities expanding in international market to acknowledge and implement all the regulatory and ethical considerations to avoid all forms of liabilities and repercussions. With the assistance of enhanced due diligence the company shall be enables to gain a reasonable assurance in respect to the validity of customer’s identity, ascertainment of relevant information or data which is adverse in nature. This is a process which is over and above the consideration of Know Your Customer, which only entails determination of documentary identity of the concerned party. Once, the company is sure of authenticity of the concerned consumer, it is important to assure that all the internal processes of the company are in compliance of the considerations. Some of the internal elements which shall be considered are the communication processes, sales practices, avoidance of conflict of interest, formulation of policies and strategies in accordance to Consumer as well as competition laws. In the event, a company fails to adhere to the requirements of all the stated considerations, it shall be imposed with ethical or legal liabilities, thereby disrupting the entire business of the concerned organization.
Related sample: Internet Marketing
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