FREE ESSAY ON GLOBALIZATION

GLOBALIZATION

Going Global
Some small companies never thought about going global, or in other words, becoming
international retailers. They think of selling their products in foreign countries and
think of ways to do so. Before you know it, they have become global marketers. Many
companies know that by doing business in other countries, they can broaden their
potential buyers. By selling to foreign customers, though, retailers are stumbling upon
roadblocks. Selling their product in international markets is not the same as selling in
the United States. Retailers, especially small businesses with limited resources, are
realizing large capital expenditures in order to accommodate sales in foreign markets.
However, many companies are doing quite well in the international markets depending on
their strategies. The resources, I based this paper on, talk about four different ways
that small companies can use to sell their product in global markets successfully. 
The first method is to find a foreign distributor. By using a foreign distributor, the
small company owner can get a hold on a market that is familiar to the distributor.
Otherwise, it would take an unfamiliar American a long time to do. The foreign
distributor already knows the market so it easier for him/her to find buyers for the
product. This is a low-cost and low-risk way to get your products sold in foreign
countries. The distributor already has a relationship with the market in his/her country.
They buy the products from the American owned company, provide the sales support and then
sell it to the consumers. Companies need to be careful of which distributor they use;
otherwise they may not make as many sales as they have the potential to do. Foreign
distributors need to be checked out thoroughly before you do business with them. 
The second method to going global is by forming a partnership or a joint venture.
Depending on what type of business you are in, you can find similar companies in other
countries and form a partnership. This gives the seller more recognition in the foreign
country. But, it is usually more costly due to the added expense of another office. By
forming a partnership with a company that is in the country you want to do business in,
the partner possibly has a list of contacts, already. This makes selling the product or
service a lot easier. Still though, companies wanting to expand in foreign markets must
be careful in choosing their partners. If they are not careful whom they choose as a
partner, they could risk losing control of their product or service. And, they need to
pay close attention to the day to day activities of selling. Some small businesses get
too hasty because they want to expand their market and gross profit, so they make bad
judgment calls when it comes to finding a company to form their joint venture with. 
The third method is by using a licensing agreement. Basically, the foreign
company/business buys the rights to the American product. They become the licensees. This
would seem the simplest method, since the licensee, it seems, would sell the product then
send you a check every month or so depending on the contract. However, you have to be
careful of this strategy as well. Some licensees buy the product and then shove it back
on the shelves so it won't compete with their product of the same nature. And if the
contract is not worded just right, the licensee can do whatever they want with the
product. The American licensor no longer has any rights or "say-so" as to how the product
is made or sold. 
The last and most costly method of going global is to go it alone. This is probably not
going to be an option for small American companies. But if a large company does its
homework, a foreign market can be very profitable. For instance, bicycle helmet producer,
Giro Sport Design Inc. of Soquel, California, did extensive research on marketing their
product in Europe before attempting to sell it there. They found out that France had more
licensed competitive cyclists than the United States. They visited parks in France and
actually stopped cyclists to get their opinion on what they liked or disliked about
bicycle helmets. This company finally decided to expand their business in Ireland. 
Every method of going global involves some risks. And like many entrepreneurs in the
article state, "it is a learning process." You can't guess at what kind of stumbling
blocks you might run into. Every culture is different and what means one thing to an
American may mean something totally different to a person in another country. Extensive
research and development is the best way to go before jumping into the foreign market.