The following sample essay on doing business. Friend-Zs coffee shop is a small business venture which began as a college project between two friends and me. We started out as a small coffee shop in Siloam Springs, Arkansas and we have been open for 5 years now. Friend-Zs coffee shop has grown into one of the best coffee houses in this small college town and has expanded all over the United States. With Friend-Zs success it has sparked the interest of its owners to take our small business to the next level by expanding into the global market.
With Friend-Zs competing globally it would allow them to take advantage of a larger customer base, opportunity to be a stronger competitor, and thrive in the environment in another country. This business move is dependent on global market in the business worldwide. The advantages of Friend-Zs going global are promising, but we have to consider the possible negative factors as well.
We have to determine what international region that would be a good business move to expand our company to. We have to take into consideration of the advantages and disadvantages of Friend-Zs to determine moving forward into the global trading world.
Competing within a global market Friend-Zs will have challenges associated with politics, culture, and economics. Factoring in the region and country, Friend-Zs must investigate the role environment factors that play into the global market industry. When considering a country, it requires businesses to look at the whole picture such as its morals, values, laws, finances, and customs.
We also have to look at what is acceptable cultural, political protocol, and the economics. What is acceptable in the United States might not be acceptable in another country. For example, U.S.-style pay-for-performance systems that emphasize the performance of individuals might not work well in Japan, where individual performance in pursuit of group goals is the value that receives emphasis (Jones and George 191). Some advantages of being a global business is we will have a new revenue potential, the ability to help more people by offering jobs, a greater access to talent, learning a new culture, and improving our companys reputation. Some disadvantages are gains may not be seen in short term, it may be years before we start reaping the rewards of our effort, we may have to modify our products and packaging to suit the local culture, such as language, having to hire a lawyer/professional to help with the legal and financial issues since we will not know every legal aspect of this country.
Doing business globally will be challenging and it will present a risk factor such as those of economics and political dimensions. Economically the development of corporations, banking, trade, capital, and money. Political forces include any type of influences from the law, and government. Friend-Zs has to make a major decision on how it intends to enter the global market. Friend-Zs entry mode of business development favors an exporting strategy. Exporting appears to be more of a solid venture with the least amount of potential risk for a small business overseas. A large proportion of aggregate trade growth in New Zealand over the past decade has come from expansion in the range of export activities undertaken by incumbent exporters (Faling, Grimes, Sanderson 138). Friend-Zs can export their goods to host markets. This exporting mode will help Friend-Zs control their distribution and sales until they can gain more experience with the global market. Licensing and joint ventures appear to be less advantageous than exporting. Those would require Friend-Zs to cooperate of other contracts and less control of their releasing of rights. With Friend-Zs not being locked into the exporting entry mode partners can review the progress the business has made and may determine if other modes of doing business maybe be more profitable. If Friend-Zs makes a profit and if they ever wanted to, they could franchise out and make more of a profit themselves.
Friend-Zs has selected New Zealand to open its new business in. According to Worldatlas, New Zealand is the first pick to start a new company in. In New Zealand, starting a business only takes a few hours of an entrepreneurs time thanks to a simple online procedure. In the past few decade, New Zealand has been transformed from an agrarian economy, largely dependent upon the British market, into a world-leader among industrialized, free-market economies. Ever since the country emerged from a recession in 2009, it has achieved a 2-3% annual growth rate in the time since. The World Bank report indicates that New Zealand is the best country when it comes to protecting minority investors, as well as the best for starting a business. Its free trade agreements, pro-competition regulations, efficient tax codes, and an open political system are all contributors to its high ranking (Dillinger). New Zealands economy is stable and the best place for welcoming a start-up business.
However, we will have to take into consideration of the environmental influences that might present challenges for start-up companys like Friend-Zs. New Zealand has a lot of competitors, so any place will experience influx of visitors. A larger corporation such as Starbucks may feel some pressure from comparable business. However, Friend-Zs will not feel the same amount of pressure because it has more of a flexible business opportunity, and they are not restricted by a franchise contract. Also, Friend-Zs will not have to worry about how customers tend to be treated. In New Zealand Caf?s are characterized by democratized space, where customers tend to be treated the same no matter their social status. Caf?s there appear to be a realization of the normal formal rules of hierarchy, control and power of organizations (Sayers). Friend-Zs will have to become part of the countys socio-culture, so they do not become just a passing trend. The increased popularity of coffee has prompted a growth industry with new caf?s and coffee roasting outlets springing up all over the country (100% Pure New Zealand). New Zealand has embraced information and communication technology and has made it a priority to the business environment. With technology being such a big thing in New Zealand Friend-Zs should not have a problem marketing their company to grow their customer base. Friend-Zs will have to educate themselves on laws and policies in this country to conduct any type of business. New Zealand is known for their stable government.
In conclusion, Friend-Zs will be a bright and entertaining coffee house that is moving to a global market. With opening a company in New Zealand, we will know more about the environmental forces we will likely face. We will have an understanding about the political, legal, technological, economic forces with opening up our new global business. With Friend-Zs knowing more about New Zealands forces we are ready to take on this adventure and start our new company, Friend-Zs International Coffee House.