You are on page 1of 2

GLOBAL BUSINESS

This topic covers the business expansion globally. It refers to the import and export of the products across the national boundaries. The company has to make thorough research about the market it is targeting, has to study the consumer demands and understand the market requirements. As the company entering the global market has to compete with the local market there, they need to have their advantage over the local market. The company can offer product choices and several price options and need to differentiate itself as a brand globally. There are several entering modes in the global market which are as follows :

1. Export mode- it involves agents which can be direct or indirect. It is generally considered by small companies and is a non equity mode. 2. Contractual- It is considered by medium and large firms and involves licensing and franchising. An international licensing allows foreign firms to manufacture a proprietors product for a fixed term in a specific market. The proprietors right includes intangible property rights such as patents, trademarks, managerial skills. eg. Disney land 3. Investment mode- It involves merging (when two firms join together to form a new firm), acquisitions (when a strong firm acquires a weaker firm), strategic alliance or joint ventures (when companies mutually come together and work as one organisation).

Important considerations for foreign market entry: 1. 2. 3. 4. 5. Eclectic paradigm of DUNNING OLI work. Ownership advantages- internationalisation and location advantages. International Product Life Cycle (Ray Vernon). Stage of Development Model (Johnson and Paul). PESTLE of entering country and SWOT of product in business development.

The company we are doing our term paper is on GOBIND INDUSTRIES LIMITED. The company deals in manufacturing farm machinery and agricultural machinery. Equipment for tillage, sowing, irrigation, plant protection and threshing which is widely accepted by the farmers. The company is specializes in Potato planting and mechanization. The company exports its agricultural machinery to Nepal, where the economy is dominated by agriculture.

The people in Nepal want quality products and they do not much care about the prices so the companies are in a tight competition with each other as each one wants to provide their customers with the best quality products at reasonable prices.The Company imports many of its products to Nepal as it is a very lucrative and competitive market. Thrasher etc. . Mahindra is the top competitor with Ford. The company therefore decides to expand itself globally to increase the revenue. The company directly exports its products through a dealer in Nepal. Gobind Private Ltd. Indian companies are much involved in exporting because of a good reason which is that Nepal has very low tariff-rates which in turn gives a good chance to Indian companies for exporting their products into Nepal. following in a close line. As agriculture is the prime occupation of people in Nepal that is the reason why the agricultural market is thriving and is of such a competitive nature. FUTURE ASPECT OF THE COMPANY GLOBALLY: In future the company decides to export its agricultural products to Malaysia. As Nepal has very less producers therefore manufacturers from India export the essential agriculture machinery like Potato planter. After studying the market requirements the company decides to invest in the Malaysian market as there is not much local competition and the company has major chances to establish itself as a major brand and differentiate its product in the local Malaysian market.