BUSINESS MANAGEMENT

Strategic International Business Management



Strategic International Business Management

Introduction

International business management is different from local/domestic business management. International Business Management refers to managing business across the borders. Each regional market is unique in terms of characteristics, environmental factors, social & cultural attributes, and business opportunities. International business management explains practical realisation of external and internal environmental pressures. For that matter, multi-national enterprises firms design international business strategies. The strategies mitigate the pressure effect with efficient strategic management. Business world has become too competitive due to rapid globalisation. International Business techniques offer strategic planning for business management. In this regard, theoretical practices present more practical & realistic ways for expanding businesses. It is essential to understand the factors which influence the success of business expansion strategy. Country demographics, consumers' behaviour, Foreign business policies, and economy are some the factors influencing success of a business.

The write up explores the implications of international business management. In this regard, Carrefour's future expansion strategy has been discussed. The write up begins with a brief introduction of Carrefour group. The market identification process is presented to offer a rational for selecting location. The report analyses the macro-environmental factors and presents recommendations for business expansion.

Discussion

Carrefour: Company's Overview

Carrefour group has a number of stores, large workforce, and diverse customer base. The group has over 9900 stores around the globe. Carrefour is the second largest retailer, operating in 33 countries. It is based in France, but it has expanded its business operations in Europe, UAE, Saudi Arab, China, Brazil, and some parts of Asia & Latin America. According to Fortune's report, Carrefour generated revenue of $120, 296.8 millions in 2011. The report projected that the group managed to generate the net profit of 573.5 million dollars (Carrefour Financial Report 2011). The company has employed over 412,000 employees. The group has four kinds of business unit; Hypermarkets, Supermarkets, Convenience Stores, and Cash & Carry Stores. Carrefour is a multi format, and multi-channel business group (Aerts, 2011, p.4). The organisation has been known for its business concept which is “Everything under One Roof”. A brief discussion is presented over location determining factors.

Location Determinants

Regulatory & Economic Factors

Industrial Policies: These regulations manage & control new entrants' business affairs such as profit margins, taxation and competition level etc. When selecting location, a company has to analyse industrial policies, and see if policies are friendly for an international business.

FDI Policies (Foreign Direct Investment)/ Special Economic Zones: Some countries allow Tax free zones, Free Trade Zones, and Special Economic Zones. Some countries permit foreign business in limited geographical locations. For instance, China allowed foreign banks to operate only in the cities they are located. However, after the entry in WTO China revised its policies pertaining to geographical restrictions (Oded & Yadong, 2004, p.n.d).

Socio-Political Factors

Political Instability: A stable political situation is ideal for international business. Instable political situation demonstrates high corruption, and low transparency.

Cultural Barriers: This factor elaborates the firm's adaptability to the social context of the host ...