Strategic Challenges Options In International Markets Commerce Essay


In order to propose a long term growing scheme for Metricum, we will reexamine the bing strengths, failing, cardinal drivers, possible markets, concern construction, growing barriers, etc closely & A ; consistently. The direction of Metricum has already concluded that the Eastern Europe market is where there is growing potency for the industry & A ; they have strong disposition, to optimise the capacity use of Romania fabrication works. It is understood, that the above has been concluded on the footing of market intelligence accumulated through assorted channels.

The client-side mentality of market research is examined by market intelligence which besides enumerates the booby traps and jobs when naming, catching, authorising, briefing and utilizing market research. ( Callingham, 2004 ) Pg. 228.

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Scheme of Metricum

In order to hold a full penetration & A ; comprehension of international scheme, in this subdivision we will depict scheme at each degree of the organisation –

Corporate Strategy is best explained as scheme shaped by directors understanding the relationship between the organisation & A ; the environment.

-Provide industry of stuffs managing equipment and intelligent handling solutions

-Collaborate with or get international spouse, to guarantee uninterrupted growing

-Explore New Markets

-Optimize in underutilise capacity of the organisation

Business scheme, which is soon being implemented, is-

-Collaboration with rivals, to minimise competition

-Globalization & A ; evolve new market entry schemes, to tap undiscovered markets

-Minimize operating expenses by increasing production at competitory locations & A ; downsizing at expensive fabrication locations

-Transfer of engineering throughout the organisation

-Safeguard supplies & A ; increase net income border, when right chance arises & A ; right rating

Functional Strategy, which is of import to implement concern scheme, is –

-25 % of company turnaround from each fabricating unit

-Building linkages between old & A ; new portion of the organisation

Organization Structure of Metricum

Organization construction of the company consists of independent concern units, largely working footing coaction with each other & amp ; negligible cross-functional integrating. This is a really weak construction & A ; will non appeal to client, looking at integrated & amp ; unvarying worldwide services, for intelligent managing solutions.

The commercialisation of new engineering requires “ associating creativeness and technological expertness, with capablenesss in production, selling, finance, distribution, and client support. ” ( Grant, 2005 ) , Pg. 149

Collaborations of Metricum

Company has so far concluded to successful abroad coaction, that is one with a Swedish company & A ; other with an aggressive Chinese ex-competitor. Its note worthy & A ; must be mentioned that both the coactions, have an equal fabrication portion as the Metricum based at East England. It should besides be highlighted that the Swedish fabrication unit is capable of invention as good, where as the Chinese fabrication unit is entirely involved in the production of standard merchandises. Changing chances and challenges offer coactions.

Some advantages of strategic coactions are –

-Agreement on aims

-Comparable part & A ; wagess

-Compatible Schemes

-No resignation of nucleus assets

However, there are important disadvantages of international coactions such as –

-Conflicts of involvement originating due to difference in strategic aims

-Issues on sourcing & A ; pricing policies

-Cultural differences easy making misgiving & A ; misconstruing

-Pilferage of competences & A ; right of first publication issues

( John & A ; Gillies, 1996 ) Page 257

Acquisitions of Metricum

Metricum has coordinated a successful international acquisition of Rumanian house, when the province was in the procedure of re-privatising it. This has helped the company to incorporate & amp ; procure the supply side, along with chances of increasing net income border.

Although this fabricating unit is merely executing at 20 % of its capacity, but this acquisition has created a foundation for the company to come in the East European Markets & A ; has immense possible for invention of merchandises.

Sum uping the grounds for international acquisition –

-Reinforcement of competitory advantage

-Achieve enhanced net incomes

-Rapid method of corporate growing

-Enhance trade name image

( Grant, 2005 ) Pg. 261

Key Value Drivers


Value Drivers

United kingdom

Enhanced Corporate Image for Metricum & A ; entree to EU market section

Easy entree to Engineering Endowment

Easier to get directors, who can easy accept re-locations & A ; work as exiles at other international fabricating units e.g. Romania


Better entree to North European & A ; Russian Markets

Easy entree to Engineering Endowment

Easier to get directors, who can easy accept re-locations & A ; work as exiles at other international fabricating units e.g. Romania


Entree to the Far East high growing markets

Efficient production concatenation


Gateway to East European markets

High Potential for invention

Skilled & A ; educated work force for mill work

Strategic Challenges for Metricum

In this subdivision we will make analysis & A ; reappraisal of the company ‘s scheme, in visible radiation of future enlargement. Simultaneously, suggestions will be made where the company may be able enhance its scheme & A ; international concern direction.

SWOT Analysis

The get downing point in explicating a scheme is typically SWOT analysis. “ SWOT is an acronym that stands for strength, failing, chances and menaces. SWOT analysis is a careful rating of an organisations internal strengths & A ; failing every bit good its environmental chances & A ; menaces. ” ( Griffin, 2007 )



-Market presence in 40 states, across the Earth. Hence, company ‘s past public presentation high spots get the better ofing cultural diverseness on route to enlargement

-Successful in international coactions

-Successful in international acquisitions

-Market experience of about three decennaries

-High technology accomplishments, supplying advanced & A ; customized solutions

-Successful in restructuring & A ; cut downing operating expenses by downsizing operations, in expensive locations

-Bridging links between assorted parts of organisations, to heighten technological accomplishments


-Weak organisational construction with negligible transverse functional integrating

– Lack of dedicated selling endowment, at several fabricating units

-No anterior experience of endowment resettlement, which enhance integrating

-Underutilization of capacity of some units, therefore loss of gross


-East European markets serve great growing chances, in propinquity to Romania

-Higher net incomes, if better direction of underutilized capacity

-Dedicating market squad or relocating endowment in propinquity of turning markets, nowadayss ample range of growing for the company

-More Collaborations to increase market presence, benefit of successful strategic confederations footing utilizing past experience & A ; schemes

-Capitalize on smart international acquisitions, which are in the procedure of being re-privatised by province


-Political instability & A ; loss of foreign investing

-Terrorist onslaughts on foregoing investing

-Competitors try to catch strategic join forcesing spouses

– Misinterpretation due to cultural spread, subsequent loss of investing

-Government intercession due to unionisation

PESTEL Analysis

A well-established type of analysis to place important factors in the distant concern environment is PEST analysis. PEST itself is an acronym for political, economic, societal & amp ; technological factors. PEST is a well-known model frequently used when carry oning a market analysis to back up concern planning & A ; scheme development. ( Smith & A ; Raspin, 2008 ) Page 63


Political Issue

-Political stableness is still an issue in East European Markets, hence changeless alterations may be witnessed in trade ordinances

-Presently EU states trade freely with East Europe markets, but this may be affected if there are any extremist policy alterations

-Constant alterations in foreign policy of China, could jeopardize the strategic confederation

-In Romania, the province is known to modulate & amp ; command private companies. This may adversely impact the enlargement programs


-Exchange rate losingss within the Organization, as different spouses have different currencies

-Difference in per captain income benchmark in different states, could be an issue for planetary integrating

-Profit coevals & A ; net income sharing issues, may come up in coactions

-Liquidation issues of organisation plus, if misinterpretation in strategic confederation may non happen at market value

-Amendment in revenue enhancement Torahs

-New excise responsibilities being created


-Culture diverseness could bring forth misinterpretations in strategic confederations

-Different life criterions & A ; distinction in wages, therefore making complexnesss

-Misunderstandings due to linguistic communication barrier

Technological Issue

-E Commerce dependance among client alternatively of direct dealing

-Inadequate web site information of the company, therefore making vacillation in head of the client


-Change in ownership policies for international acquisitions

-Work Licenses for exile employees

-Taxation construction


-New environmental policies non compatible with company ‘s bing production line

-High new environmental criterions defined, bing machinery unable to run into conformity

Strategic & A ; Competitive Actions



Reducing of Overheads & A ; costs

Increase capacity

Decrease Dependence on strategic coaction spouses, more trust on acquisition

Innovation outsource to Romania, one time skill spread is bridged

Reduce Supply Costss

Tactical ACTIONS

New coactions

Increase production in propinquity of turning markets

Relocate proficient & A ; dynamic directors, to Romania

Market Intelligence

Internal Skills, Knowledge & A ; cultural Valuess

Internal accomplishments & A ; knowledge up step are changeless challenges for companies, with organisation construction such as Metricum. However, the direction needs to concentrate on heightening internal accomplishments, in synchronism with long-run growing scheme. Some benefits-

-Increase in productiveness & A ; net income borders

-Enhance client impact, hence additions market portion

-Promotes larning civilization in the organisation

-Motivates employees & A ; addition assurance in the procedure

-Encourages safe work environment & A ; healthy civilization

Ideas to develop internal accomplishments & A ; knowledge –

Relocating talented directors – relocating is a really complex & A ; an expensive procedure. However, in long term there is a batch a value sweetening is the campaigner with right attitude has been shifted. This will non merely promote information sharing, but besides actuate the employees to finish. This procedure besides assists in cultural spreads between the organisation & A ; provides better organizing, between assorted parts of the organisation located worldwide.

Global videoconference – With the assistance of engineering, planetary videoconferences should be coordinated sporadically. This provides a suited platform for directors & A ; squad members, to portion critical issues. Prior such conferences, there should be pre-decided docket & A ; there should be added session on experience sharing. Exercises such as these, non merely help in information sharing & A ; increase the engagement, of all employees in the organisation.

Global R & A ; D undertakings – direction should originate the research & A ; development, across international boundaries. This helps in coherence & A ; integrating of technology endowment, in the organisation. Not merely will it heighten research accomplishments, but besides create a solution, which would be practical for planetary markets, instead than domestic markets.

Seminars, workshops & A ; conferences – Such industry events should be used an chance for international employees, to casually tie in with their planetary co-workers. Research shows ad-lib environment is best juncture to increase societal integrating, in an organisation.

Information Technology – With development in recent old ages, in field economical information technological AIDSs such as net meeting, voice courier, nomadic applications, turrets, etc. , easier & A ; faster ways of networking within the organisation have evolved. This has helped in encephalon picking within the organisation & A ; coincident solutions or disciplinary actions, required to carry through undertakings. A company should be invested in such tools & A ; along with create ideal support, for uninterrupted development of such resources.

External Training – Worldwide uniforms criterions of preparation by an external adviser, is besides yet another manner to promote the procedure of heightening internal accomplishments & A ; cognition sharing.

In any international organisation the importance of cultural value is a nucleus issue, which should be carefully evaluated utilizing “ Hofstede ‘s value dimensions ”

Hofstede ‘s work was one of the earliest efforts to utilize extended statistical informations to analyze cultural values. ( Samovar, Porter, & A ; McDaniel, 2009 ) Page 198

Hofstede ‘s Value Dimensions is a good tool to measure compatibility of directors & A ; workers, when relocated in international offices or when different civilizations are interfacing in the organisation.

Culture differences are said to be easiest beginning of struggle & A ; may gnaw synergisms quickly, created over clip, particularly for a company such as Metricum, dwelling of coactions it is all the more of import for direction to explicate ways to manage the cultural diverseness.

Global Scheme

A globalisation scheme normally involves streamlining and the subsequent enlargement of strategic confederations. Directors must take the fabrication location, which offers an unexcelled combination of quality, cost, and engineering in order to accomplish rationalisation. This means different parts and constituents are frequently produced in different states and that merchandise design and selling are basically the same in all markets. As such, distinction and specialisation in local markets is minimized.

Decision Making Procedure

The organisation construction should be such to hasten the determinations doing procedure.

How to make fast decision-making procedure –

-Real clip information sharing, through engineering

-Empowering the right directors

-Continuous preparation plan

-Adequate investing, to obtain market intelligence

The benefits of faster & A ; smoother decision-making procedure –

-Gain entrepreneurial chances, become first movers

-Achieve competitory advantage

-Ahead of market in contriving new schemes, to guarantee long term fight

( Hitt, 2002 ) Page 10

Staffing Policy

It is advisable for Metricum to recommend & amp ; implement a staffing policy promoting trans paras. Firms with a purely planetary staffing orientation no longer subscribe to the policy of an ethnocentric feeling of a native or host state. The enlisting of the finest Directors takes topographic point from within or outside of the company, and ethnicity or nationality is of no effect. This policy provides a greater pool of appliers to take from. Third state subjects bring cultural flexibleness. To originate a alteration, Metricum can implement foremost egoistic attack & A ; eventually transform into trans paras theoretical account.

( Adler & A ; Gundersen, 2008 ) Page 274

Options in International Markets

In the quickly turning markets there are huge chances stuffs managing equipment and intelligent handling solutions. The cardinal drivers for such concern & A ; services are economic systems focussed on substructure development & A ; excavation. East Europe states belt is known to be rich in resources & A ; engineering in this country hardly used. Companies such as Metricum position this as major growing chances.

Understanding Unfamiliar Markets

Cultural and lingual differences- a apprehension of the local concern ethos is indispensable in accomplishing success since these disparities consequence relationships and communications inside the company, and outside with clients and besides the authorities.

Quality and preparation of local contacts and employees – measuring the accomplishment sets and finding if the local staff is qualified is a cardinal factor for success.

Political and economic issues-companies need to find the grade of exposure they can defy, if policies undergo frequent alteration.

Experience of local partner- measuring the experience of local spouse in the market, with the merchandise and distribution, is indispensable.

Market Intelligence-it must be verified that beginnings are reliable & A ; experienced. Market intelligence garnering procedure in uninterrupted.

Additionally, the company needs to make a systematic hazard appraisal which will include the undermentioned key issues –

Political and cultural differences

Global competition



Social duties, their images, and their competitory schemes

Market Entry Strategy

This subdivision examines the assorted entry and ownership schemes available to houses, including service-sector outsourcing, exporting, offshoring, ready to utilize operations, licensing, direction understandings, contract edifice, joint ventures, franchising, and entirely owned subordinates set up by the organisation and e-business. These options are non reciprocally sole ; several may be employed at the same clip.

International enlargement can be started or tested out an abroad market by following exporting as a low hazard method. Using or prosecuting a director or establishing an export section can originate it.

Licensing: International licensing understandings provide the mandate to a corporation in the host state to fabricate or sell a merchandise, or instead do both. In mature stages of the merchandise life rhythm, Licensing is besides highly desirable.

Franchising: The franchiser licenses merchandises, hallmark, runing rules, and services for a preliminary fee and on-going royalties, thereby prosecuting comparatively small hazard.

Contract Fabrication: is the procedure of using cheaper labor overseas to contract for production of comprehensive goods or constituent parts.

Offshoring: when a company moves one or all of its mills from the “ place ” state to another state to avoid trade barriers or take advantage of lower costs of production.

Management Contracts: is outsourcing the rights to a foreign company to pull off the day-to-day operations of a concern. This right is non extended to doing determinations sing ownership, strategic, fiscal and policy alterations.

International Joint Ventures ( IJVs ) : are contracts by two or more companies to make a merchandise or service hand in glove. Metricum and a local spouse portion ownership, typically. This scheme enables fleet entry into new markets since one spouse is already recognized and has local contacts in add-on to being familiar with local operations. IJVs are a frequent attacks for corporate growing universe broad ; they besides offer a agency to impact trade hindrances, to obtain managerial and technological accomplishments, to accomplish considerable economic sciences of graduated table for development of a lasting competitory place, to get extra natural stuffs, and to set out the hazard attach toing working in a foreign environment. The hazards of expropriation and persecution in the host state are besides condensed by IJV.

E-Business: E-business is an entry scheme at the local degree.

( Buckley & A ; Ghauri, 1994 ) Page 330

Barriers for New Markets

In this subdivision we will discourse a few barriers, which a company can anticipate to confront, when come ining new markets –

Informational Barriers – spreads created due to skewed market intelligence, undependable informations, hapless market research methodological analysis.

Functional Barriers – hard currency flow issues due to hapless banking construction, deficiency of managerial supervising, deficiency of skilled labor & A ; work force, substructure issues.

Marketing Barrier – merchandises & A ; services non compatible to the market due to miss of market experience, host state non compliant to international criterions hence making cheaper options in domestic market, issues on recognition installation due to miss of recognition evaluation study of purchasers therefore fring to local rival, complexnesss of foreign distribution channels, unable to make the right quality of after gross revenues service due to negligible market experience, inordinate operating expenses such as transit, insurance, warehousing due to negligible market experience.

( Craciunoiu, 2002 )

Competition in New Markets – Porter Analysis

This subdivision helps in analysing the competition in new international markets footing Porter analysis ( Porter, 1981 )

The footing of competition and its strength derive mostly from the interplay of five competitory forces: possible rivals, present rivals, the bargaining power of providers, replacement merchandises, and the bargaining power of purchasers or clients. Jointly, on an synergistic footing they determine the industry ‘s long-run attraction. By measuring the competitory environment Porter ‘s theoretical account, which consists of the undermentioned five factors, is used ( Porter, 1981 ) :

A· Industry rivals. Low

New market, therefore limited competition

Limited deepness & A ; apprehension of Metricum ‘s concern services, soon in East European Markets

A· Potential entrants. High

Acute involvement from other European brotherhood based makers to perforate this market

Proximity to good developed markets

A· Substitutes. High

Customers who are non seeking alone stuff managing solutions, may easy switch to other criterion merchandises

Chinese makers, are good in copying solutions & A ; may make inferior alternate solution at a lesser monetary value

A· Suppliers. Low

Supplier side integrated after the acquisition of Romania unit

A· Buyers. Low

Limited replacements available in the market on a short term footing



Prior Entering International market, Metricum should –

a. Research the market scientifically and diagnostically, inclusive of the human facet taking the clip therefore to larn about the state and its civilization.

B. Understand the characteristically idiosyncratic concern and regulating relationships that impact the industry

c. Once a company has decided to come in the international market, it needs to suit into the local concern mind and civilization and larn how to run within it.

2. There are three primary considerations in strategic pick, which Metricum must measure prior come ining new markets –

( 1 ) Evaluation of the advantages and disadvantages of each entry scheme with the focal point being the house ‘s capablenesss

( 2 ) The important environmental considerations

( 3 ) The influence that each pick would hold over the across-the-board mission and purposes of the company.

3. Many variables need to be successfully transposed into a system that cohesively complements that desired scheme.

Form example and collaring agreements with providers.

Operating like a local by making the prep of cognizing a state ‘s civilization.

Hire locals.

Maximize liberty.

Tweak regular board merely somewhat from topographic point to topographic point.

Build market portion by maintaining monetary values low.


1. Metricum must research Global e-business, which is an of import facet of the altering technological environment. E-business is the incorporation of systems, value ironss, concerns, processs, with across-the-board markets utilizing Internet-based and related engineerings and impressions. The e-business and Internet provide a figure of advantages in planetary concern such as:

a. Convenience in carry oning concern worldwide

B. Access to an electronic meeting and trading topographic point

c. Ability to pass on rapidly and cheaply

d. Consumer power by supplying entree to more picks and information

e. Efficiency in distribution for many merchandises and services

Advise Metricum to put criterions in there employee enchiridions in international markets, refering to –

Make no deliberate injury ; esteem the unity of the ecosystem ; and take due stairss for continued consumer safety.

Produce more good for the host state.

The host state ‘s development, should be a factor and parts should be made to it by whatever agencies are at the disposal.

Respect the human rights of their employees.

Respect the local civilization and work with it every bit long as your ethical norms are non violated, and non against it.

Pay their menu portion of revenue enhancements.

Expand and implementing merely contextual establishments, by working in concurrence with the local authorities.

3. It is imperative that Metricum alters and transforms it ‘s Organizational constructions to suit the house ‘s altering internationalisation to maintain up with world-wide competition. Additionally, it is necessary for the construction of the house to be complimentary to the application of its scheme. Hence, the construction must “ suit ” the attack, for it to be productive.

Mitigation & A ; Alternative Schemes

Basis above research, we will reexamine some favorable agencies of adaptation

Devel Taoka and Beeman suggested these agencies of version:

a. To take down the hazards based on political state of affairss joint ventures with subjects should be initiated. These would come under the range of Equity sharing.

B. The direction needs to be participative. To pull off the subordinate, subjects including those in the authorities or labour organisations must be actively sought out and use.

c. Local manners should be taken into history during the procedure of localisation of the operation by accommodating the name of the subordinate, it ‘s direction manner, and so forth, to suit the local pallet. Localization aims at transforming the subordinate from a foreign house to a native 1.

d. The house needs to be actively involved in substructure development such as ( local sourcing of stuffs or parts, procuring external debt, engineering transportation, direction preparation, foreign-exchange coevals, and so forth ) . This is besides termed as Developmental aid.

2. Metricum when come ining new markets, must exert appropriate cautiousness footing –

A. Expropriation without speedy and appropriate wage.

B. Involuntary sale of equity at or below the debased monetary value, to the subjects of the host state.

c. Prejudiced intervention of foreign houses in the application of host state Torahs and ordinances.

d. Hindrances to directing place of financess be it net incomes or equity.

e. Loss of engineering or rational belongings rights

f. Intrusion into and limitations in managerial decision-making.

g. Fraudulence by authorities decision makers.

Appendix 1 – Contemporary Organizational Structure for a Global SME








Will Haton
















SWEDEN Fabrication Unit of measurement







Appendix 2 – Sample Market Data for Key Locations

Kd – pls insert, if cant five pls elete

Appendix 3 – Market Intelligence Report ; Ukraine


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