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Introduction - International Business Operations Assignment
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The legal, technical, and competitive forces that deter or block potential rivals from accessing a market are known as barriers to entry. Barriers to entrance can be quick and easy to overcome, such as the price of buying commercial space, or they can be highly restricting. The current essay aims to examine the barriers to entry for the international organisation that seek to exploit the overseas market.
Examine the ‘barriers to entry’, while an organisation seeks to exploit a market overseas
In relation to the ‘barriers to entry’, it can be stated that the international firms (monopolies) intend to gather the economic profits in a significant manner. Here, in order to exploit the market overseas, these profits tend to attract vigorous competition in this regard. According to Kwak et al. (2018), the legal, technical, and market factors that deter or block potential competitors from accessing a market are known as barriers to entry. Barriers to entrance can be quick and easy to overcome, including the cost of renting retail space, or they can be highly restricting (Kwak et al. 2018). As discussed in this study, as for example, there are numerous numbers of the available radio frequencies in the international organisations that are available for broadcasting. Herein, once the rights to all of them get purchased, the international business competitors tend to enter the global market. As argued by Suryanto & Komalasari (2019), Barriers to entry can sometimes contribute to monopoly. It can also restrict rivalry to only several companies in some situations. Barriers to entry may exist even though the existing company or firms in the sector are profitable.
As a result, it would not be true that unusually high earnings could draw new ventures in markets with substantial barriers to entry. Therefore, based on the discussion made above, from a personal standpoint it can be analysed that businesses often make the error of looking for new markets (Suryanto & Komalasari, 2019). Overall, is not really a shortage of rivalry really a positive thing. Unfortunately, there are two problems with this approach, a shortage of an existing community could be a huge sign of a complete absence of purchasing power. Apart from that Competition, on the other hand, frequently introduces additional obstacles to entrance into a market, and there are several other factors which can obstruct market entry. Established brands often have higher advertising budgets than newcomers to a market, allowing themselves to "annihilate" potential entrants by investing aggressively on ads and thereby blocking out the potential entrant's message. Potential consumers may have been more familiar with these well-known products, and as a result, they are expected to be suspicious of the particular entrant.
Using specific business examples analysing and explaining the reasons for success or failure
In terms of specific examples, it can be stated that common barriers to the market entry is mainly the marketing and advertising. As explained by Meriton & Graham (2017), until committing to enter the market, it is essential for potential entrants to thoroughly examine the way through which they can tackle the supply chain and what the cost could be. This could be a success for the international organisation as the new entrants’ organisations could have experienced the larger budgets through the advertisement strategy. Here, in terms of the relevant techniques, the direct exporting could be considered (Meriton & Graham, 2017). According to this technique direct exports entails exporting exclusively into the market of your choice, first and foremost to use the own money of the organisations. When a distribution policy has been developed, several companies turn to distributors and the dealers to serve it in the industry. Agents and dealers serve the interests in near collaboration with the global organisations (Dai, Bai & Anderson, 2020).
Therefore, it is worth mentioning that the example of capital costs could be considered here as another example. As such, the expense of entering a market is among the most common obstacles to entry for new players. They have to pay for the machines they use to produce their goods, as well as the houses they live in and the manufactured goods they use (Saeed & Kersten, 2019). Capital costs in certain markets prohibit everything except a few potential new entrants from joining. Considering the operating costs of building a new telecoms network, billions of dollars in funding drastically decreases the chances of launching their own business. Here, the fact can appear as a failure for the international business organisations. Resource monopolization is another example. In certain cases, the capital used to produce the final product is linked to a single producer or suppliers. As for example, the UK has effectively dominated solar panel manufacturing by ensuring that International firms have preferential access to the necessary silicon (Saeed & Kersten, 2019). It is a commodity on which the UK has a wide (but not complete) monopoly. It can lead to success for the organisations because Established competitors in a market could have competitive supply of raw materials or favourable worldwide positions, allowing for lower-cost manufacturing. Hey could also have built or patented advanced inventions that render producing related products quite costly for a potential entrant. They are also more probable to get the skills needed to lower manufacturing costs, something a new entrance will neglect.
It is to be concluded that the contracts with existing businesses can either preclude or heavily encourage retailers in those sectors from ever doing business with competitors. This makes it impossible for a potential industry entrant to bring their goods in front of consumers, where they can be adopted.
For most industries, global supply chain management has become increasingly relevant. Logistics cost savings, buying risk management, sales growth, and other factors are driving this pattern. The current segment aims to evaluate the several kinds of supply chains and it also analyses the effective supply chain strategies and its impact upon organisations in global context.
Explaining the different types of international supply chains
There are six different supply chain frameworks, each of which falls under one of two divisions. Either as the types prioritize performance or prioritizes accessibility. Although all supply chains contain components of growth and innovation, each supply chain type might prioritize one or the other.
In high-demand scenarios with such little deviation, the steady supply flow provides continuity. The continuous flow will enable businesses who generate the very same products frequently with such little variation. It has some of the most conventional supply chain systems and is suitable for market economies.
The fast-chain method is suitable for suppliers who create innovative goods with limited development cycles. It is indeed ideal for a company that has to update products on a regular basis to bring them out quickly before the pattern fades. This is a versatile framework.
The successful chain strategy is ideal for firms operating in highly dynamic environments whereby end-to-end performance is a top priority.
Specific configurations are emphasized in the customized configured frameworks, particularly throughout installation and development. It is indeed a cross between the agile and continuous modelling techniques, a type of blend.
The agile paradigm is essentially a supply chain management strategy that is very well suited to companies that deal with custom orders. It is indeed a paradigm that emphasizes the supply chain's potential to ramp up in certain situations while remaining stable in others.
Companies can reach high demand fluctuations as well as handle extended stretches of lower margin activity thanks to the modular framework. It is easy to turn up and down.
According to Koberg & Longoni, (2019) in handling a global supply chain, there are several concerns to address.
The business must make a decision on its overall outsourcing strategy. Any facets of the supply chain might well be held closer to domestic for whatever purpose. As argued by Kim, & Chai, (2017), strategic sourcing is yet another problem that would be addressed in a multinational supply chain management approach. Evaluating bids from a variety of multinational vendors can be challenging. Companies want to focus on the cheapest cost rather than spending the time to weigh any of the other factors. Considering the global context, international companies must specify the number of vendors they can use. Lower production costs, quantity reduction through pricing policies, content understanding costs, organized redeployment, increased buyer-supplier product development collaboration, and therefore increased customer support and brand recognition might indeed benefit from reduced deliveries.
Critical examination of the strategy’s managers can use to ensure the efficiency and effectiveness of their organisation according to the type of supply chain in operation
A business may penetrate an international market in a number of different ways. There is no one-size-fits-all market penetration approach that works with all foreign markets.
Licensing is a much more skills and equipment in which one company sells the license to use a good or service to another. This is an especially effective tactic if the license buyer has a sizable customer base. Licensing may be used for either marketing or manufacturing.
Piggybacking is a one-of-a-kind way to get into the overseas market. If you offer an especially fascinating and special product or service to major domestic companies that are actively important in foreign sales, and if the product or service can be added to the inventory for international markets (Chen et al., 2019) .
It can be concluded that while the use of international vendors is on the rise, most businesses seem to find the adjustment to global procurement difficult. Few businesses have the resources in place to make this working performance. In the other direction, although importing from low-cost economies will save money, it also entails greater geographical ranges, longer lead times, and heightened incidence. It can be concluded that the international companies need to focus more on the R&D team towards global supply chain strategies and trends as well in order to accomplish the effective global supply chain.
Chen, B., Wang, X. B., Li, Y. L., Yang, Q., & Li, J. S. (2019). Energy-induced mercury emissions in global supply chain networks: structural characteristics and policy implications. Science of the total environment, 670, 87-97.
Dai, T., Bai, G., & Anderson, G. F. (2020). PPE supply chain needs data transparency and stress testing. Journal of general internal medicine, 35(9), 2748-2749.
Kim, M., & Chai, S. (2017). The impact of supplier innovativeness, information sharing and strategic sourcing on improving supply chain agility: Global supply chain perspective. International Journal of Production Economics, 187, 42-52.
Koberg, E., & Longoni, A. (2019). A systematic review of sustainable supply chain management in global supply chains. Journal of cleaner production, 207, 1084-1098.
Kwak, D. W., Rodrigues, V. S., Mason, R., Pettit, S., & Beresford, A. (2018). Risk interaction identification in international supply chain logistics. International Journal of Operations & Production Management.
Meriton, R., & Graham, G. (2017, September). International supply chain resilience: A big data perspective. In Proceedings of the 21st Cambridge International Manufacturing Symposium (pp. 158-164). Institute for Manufacturing, University of Cambridge.
Saeed, M. A., & Kersten, W. (2019). Drivers of sustainable supply chain management: identification and classification. Sustainability, 11(4), 1137.
Suryanto, T., & Komalasari, A. (2019). Effect of mandatory adoption of international financial reporting standard (IFRS) on supply chain management: A case of Indonesian dairy industry. Uncertain Supply Chain Management, 7(2), 169-178.