Global expansion Essay Example | Topics and Well Written Essays - 750 words

Global expansion - Essay Example policy-making and hearty climate of foreign countries. Local levyes and regulatory systems. Currency risk and Foreign exchange counseling. Transfer pricing and supply chain management. Local workforce. Diversified cultures of multinational markets Cultural differences substantially impact the way companies do businesses. It is important to be aw atomic number 18 of the disparities that will be at your disposal in the target market. When expanding into multinational market, the accustomed norms, values and behavior of the local citizens mustnt be ignored. A bottle of American whisky can be an offense in middle-east countries. Political and social climate of foreign countries A shelter political and social system can be beneficial for the company which intends to expand whereas unrest and destabilized political system can create new issues for it. Local taxes and regulatory systems It is crucial to determine whether the tax regime for internation alist businesses is friendly or competitive. Corporate tax rate with low headline is always appealing for the companies. Currency risk and foreign exchange management Companies must determine whether the local currency is stable or volatile. It should also stumble if currency hedging can be obtained at a reasonable cost. Transfer pricing and supply chain management Development of effective supply chain helps to generate the companys cash flow more quickly. Brief information should also be self-contained regarding the transfer pricing policies of the foreign countries. Local workforce Effective communication of the local workforce has the ability to make or break the progress of business. It is the insane asylum of success for every business. Right people at the right location that is, financers, staff, suppliers, regulators, quality of customers can provide a competitive edge to the business. 2. Explain what ethnic barriers and diversity issues are commonly encountered by interna tional/multinational (MNC) and global organizations. Cultural Barriers and Diversity Issues MNCs usually promote consumerist culture by producing standard commodities for modify cultures. Yet, culture often become barrier and creates distances. The following are the primary reason of diversified cultures all over the world. Communication and Language Barrier- Different languages are spoken in different countries which become a hindrance for MNCs. It is an essential means of communicating with customers, retailers, suppliers etc. therefore, language often becomes a barrier in diversified cultures. Religion- Religious backgrounds usually have substantial impact on the individuals. People do not psychologically and emotionally accept something which is not adjust with their religious values. This often becomes hindrance for MNCs while tapping into diversified nations and cultures. Accustomed/diversified Culture- Socio-cultural differences, norms, beliefs, values, attitudes, perceptio ns congregate to form a certain cultural background of a country. These aspects go from country to country and therefore construct a diversified nature of the world. 3. Why has diversity become such an important topic in the international arena? Importance of Cultural Diversity Cultural diversity plays a vital role for a company. The criteria diversifies customer groups on the basis of gender, race, ethnicity, age, educational background, beliefs, lifestyles, language,