For example, a company was pioneering new banking industry about a decade ago. It has had a great deal of success. It is nature in the business arena that when (first mover) one company is successful in a particular field of business, attracted and lured by the impressive success of it, other companies hurriedly come into this field of business. This makes competitions more stiff and hard.
This competition will erode the market share and revenue of the first mover if they are not more innovative and creative because when people have choices, they always use the one which match their preference and economic status. Further more, over time, the services and products of companies in this field will become homogeneous.
When facing this kind of competition, why not find new markets by expanding the business overseas or different regional where there is less competition.
In doing so, the company has many advantages and benefits to leverage as explained below:
First: Exploit and leverage the knowledge and expertise
The company knows the know-how and expertise in this business. So, why should a company sit with all these skills and knowledge in the congested market when there is a wider and more profitable market out there. It is a waste of skill and knowledge. Use it, leverage it!
Second: Spread the risk
For example, by expanding the business overseas, a company can avoid total downturn of a business which can be caused by such factors as government regulations, natural disasters, increasing income from new market by using the old knowledge. When one country has domestic economic crisis, the company from another country can support in terms of finance and other resources. All the businesses hinge on the favor of the local government and the mercy of natural disasters. It is better not to put all the eggs in one/a single basket.
For example: A company has two branches “one in Thailand and another in Vietnam”. When there was a political turmoil in Thailand, the branch in Vietnam can support the Thai office and cover the cost because it does not have any problem in the country which hurts the company.
Third: Accruing knowledge
When operating in two or more different countries, the company will learn more about the international market and culture appropriate management which will be more than useful in competing with the competitors anywhere in the market. In this scenario, the notion “Think global, Act local” of ACCER CEO is applicable. Especially, when operating in totally different culture like Asia and Europe. The company can exploit immeasurable knowledge transfer from one country to another without having to invest in it.
Of course, international business has its own setbacks; it would primarily be concerned with local rules and regulation of that particular country and cultural factors of different countries.
Forth: Cross market subsidization
• Can support competitive offensives in one market with resources/profits diverted from operations in other markets
• Competitive power of cross-market subsidization results from a global firm’s ability.
• Can take its resources and profits in other country markets to mount an attack on single-market or one-country rivals
• Can try to lure away their customers with lower prices, discount promotions, heavy advertising and other offensive tactics because they have different resources from different markets.
Please try not to be content with your existing market. Sooner or later, your competitors will come to eat your profit and market share.
Think early to expand overseas or different market to get upper-hand on your competitors and to fill your revenue full.
But when you over-expand, your turnover/income will not cover your cost. So, remember your target group and mark size first. Is there enough population and do that population have purchasing power? Plan More!
This competition will erode the market share and revenue of the first mover if they are not more innovative and creative because when people have choices, they always use the one which match their preference and economic status. Further more, over time, the services and products of companies in this field will become homogeneous.When facing this kind of competition, why not find new markets by expanding the business overseas or different regional where there is less competition.
In doing so, the company has many advantages and benefits to leverage as explained below:
First: Exploit and leverage the knowledge and expertise
The company knows the know-how and expertise in this business. So, why should a company sit with all these skills and knowledge in the congested market when there is a wider and more profitable market out there. It is a waste of skill and knowledge. Use it, leverage it!
Second: Spread the risk
For example, by expanding the business overseas, a company can avoid total downturn of a business which can be caused by such factors as government regulations, natural disasters, increasing income from new market by using the old knowledge. When one country has domestic economic crisis, the company from another country can support in terms of finance and other resources. All the businesses hinge on the favor of the local government and the mercy of natural disasters. It is better not to put all the eggs in one/a single basket.
For example: A company has two branches “one in Thailand and another in Vietnam”. When there was a political turmoil in Thailand, the branch in Vietnam can support the Thai office and cover the cost because it does not have any problem in the country which hurts the company.
Third: Accruing knowledge
When operating in two or more different countries, the company will learn more about the international market and culture appropriate management which will be more than useful in competing with the competitors anywhere in the market. In this scenario, the notion “Think global, Act local” of ACCER CEO is applicable. Especially, when operating in totally different culture like Asia and Europe. The company can exploit immeasurable knowledge transfer from one country to another without having to invest in it.
Of course, international business has its own setbacks; it would primarily be concerned with local rules and regulation of that particular country and cultural factors of different countries.
Forth: Cross market subsidization
• Can support competitive offensives in one market with resources/profits diverted from operations in other markets
• Competitive power of cross-market subsidization results from a global firm’s ability.
• Can take its resources and profits in other country markets to mount an attack on single-market or one-country rivals
• Can try to lure away their customers with lower prices, discount promotions, heavy advertising and other offensive tactics because they have different resources from different markets.
Please try not to be content with your existing market. Sooner or later, your competitors will come to eat your profit and market share.
Think early to expand overseas or different market to get upper-hand on your competitors and to fill your revenue full.
But when you over-expand, your turnover/income will not cover your cost. So, remember your target group and mark size first. Is there enough population and do that population have purchasing power? Plan More!
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