Management - Small Businesses and Globalisation
Currently thanks to advancing technology businesses are able to now reach a global market and as Priestley expresses (2011), ‘businesses that have less than 10 staff but aren't limited by geography. They have reach into cities all over the world and could easily be making millions in sales despite a relatively small headcount,’(p.2)- in order to compete more and more small businesses are finding it necessary to integrate into to globalised entities. Globalization as defined in businessdictionary.com:
For small business there has been a common approach for them to go from a domestic company to a global company, usually going through the following phases as presented by Williams and McWilliams (2010); exporting, cooperating contracts, strategic alliances and wholly owned affiliates all of which compose the phase model of globalization(p.160). within this phase model businesses may enter at various points and get contrasting results. The model itself is presumed to be a representation for businesses of all sizes, though individual companies of different sectors enter the model in varying ways to best suit their conditions. Now the question is how a small business with limited resources should best approach the model in order to get their product out into the global market, considering the advantages and disadvantages of each phase in the model.
Many small businesses opt to sell products they’ve manufactured based in one location to foreign consumers, exporting is one of the phases preferred by companies because it allows the business to have more control over research, design and production decisions, and they’re less dependent on sales in the local market alone. Though those are great aspects there are some associated inherent disadvantages with exporting such as being susceptible to tariff and non-tariff barriers and transport costs that can considerably increase the cost of the exported goods. Among those disadvantages there is also the risk of clerical error
For small business there has been a common approach for them to go from a domestic company to a global company, usually going through the following phases as presented by Williams and McWilliams (2010); exporting, cooperating contracts, strategic alliances and wholly owned affiliates all of which compose the phase model of globalization(p.160). within this phase model businesses may enter at various points and get contrasting results. The model itself is presumed to be a representation for businesses of all sizes, though individual companies of different sectors enter the model in varying ways to best suit their conditions. Now the question is how a small business with limited resources should best approach the model in order to get their product out into the global market, considering the advantages and disadvantages of each phase in the model.
Many small businesses opt to sell products they’ve manufactured based in one location to foreign consumers, exporting is one of the phases preferred by companies because it allows the business to have more control over research, design and production decisions, and they’re less dependent on sales in the local market alone. Though those are great aspects there are some associated inherent disadvantages with exporting such as being susceptible to tariff and non-tariff barriers and transport costs that can considerably increase the cost of the exported goods. Among those disadvantages there is also the risk of clerical error