International commerce

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Promoting and selling products or services are no longer restricted to the original domestic market but it became international. Not only huge businesses but all sizes of companies are adopting international marketing to expand their activities abroad. However it hasn’t always been like that, a few years ago companies that want to enlarge their business needed to spend a lot of money and probably more than they gain, and this is why they usually prefer working on the original market over taking risks elsewhere.

Selling in foreign countries now is a necessity for some companies that might lose their domestic market to competitors or the foreign market present more opportunities to grow and sometimes the companies enter to different markets to spread the risks and avoid the lost.

This is why only large companies would take the risk but the development had changed and influenced everything.

But before taking a forward step to the international marketing, some differences must be taken in consideration because the foreign market is not at all similar to the original one.  

For example, the political differences like the changes in the government might influence the activity and this is the case in the Middle East, the revolutions had scared the companies and pushed them to think twice before investing.

 Economic and social differences are so important because it has a direct interaction with the behavior of customers such as the GDP factor, taxes and the social structure (role of women in the society) so location has a strong impact on marketing strategies.

Legal differences, this point is all about the country laws, for example some products in some countries such as marijuana is legal while in other countries are forbidden.

 Cultural differences are totally different than the last point (legal differences) because it is not written but it requires studying very well the new market like the language.  

And we must not forget the differences in business practices such as the formalities in creating enterprises; in some places what takes few days takes years in other places.

After taking in consideration the differences from the original market to the new one, the company should know how to make an entry into international markets.

Exporting is the practice of shipping goods directly to a foreign country but this method can be done either directly through the company website or indirectly by an export intermediary like trading companies.

International franchising is simply when company gives another one the right or the license to use its trade name, products and services and provides the franchisee with exercise, support and control.

Join ventures is when two or more companies combines their efforts to control one common business. Sony Mobile Communications is one of the most success joint venture between Sony and the Swedish telecommunications equipment company Ericsson.

Licensing involves giving another company the license to products its goods. This form reduces costs and time of exportation but it requires a full control on the terms of quality. Still, it has a bad influence on the company’s reputation is this form is used under bad conditions of production.

Direct investment in the subsidiaries is common form used by almost all companies because it avoids the company conflicts and cultural clashes between the original country and the new one. Creating subsidiaries to manufacture the product reduces the costs of production such as the workforce.

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