DEPARTMENT OF BUSINESS ADMINISTRATION

ASSIGNMENT OF INTERNATIONAL BUSINESS

1
 ASSIGNMENT NO: 01

Topic: CHALLENGES AND OPPORTUNITIES OF

INTERNATIONAL BUSINESS

SUBMITTED BY: RIJA CHISHTY

CLASS: BBA IV-B

SUBMITTED TO: MISS NIDA MOHSIN

SUBMITTED ON:14-JULY-2020

2
 Table of Contents
ACKNOWLEDGMENT:................................................................................................................................................. 4
EXECUTIVE SUMMARY.............................................................................................................................................. 5
INTRODUCTION:...........................................................................................................................................................6
CHALLENGES FOR MANGER WHILE GOING GLOBAL:.......................................................................................6
1. LANGUAGE BARRIER:.................................................................................................................................... 6
2. CULTURE OR RELIGIOUS DIFFERENCE:.................................................................................................... 7
3. QUALITY (TQM) AND PRODUCTIVITY:...................................................................................................... 7
4. OWNERSHIP ISSUES:....................................................................................................................................... 7
5. ENVIRONMENT:............................................................................................................................................... 8
6. STRATEGY FORMULATION:..........................................................................................................................8
7. ETHICS AND SOCIAL RESPONSIBILITY:.....................................................................................................9
8. LAWS AND REGULATIONS:...........................................................................................................................9
9. PACKAGING:..................................................................................................................................................... 9
10. CURRENCY ISSUE:.......................................................................................................................................10
11. CHANGE:........................................................................................................................................................ 10
12. EMPOWERMENT:......................................................................................................................................... 10
13. INFORMATION TECHNOLOGY:................................................................................................................ 11
OPPORTUNITIES FOR MANAGERS WHILE GOING GLOBAL:........................................................................... 11
1. WORK WITH FOREIGN PARTNERS:........................................................................................................... 11
2. FASTER GROWTH:......................................................................................................................................... 11
3. ACQUIRE NEW MARKET:.............................................................................................................................12
4. OBTAINING DIVERSIFICATION:................................................................................................................. 12
5. ACCESS TO NEW TALENT:...........................................................................................................................12
6. OBTAIN COMPETITIVE ADVANTAGE:......................................................................................................12
7. BRAND RECOGNITION:................................................................................................................................ 13
8. REGIONAL CENTERS:................................................................................................................................... 13
EXAMPLE OF P&G (PROCTER & GAMBLE).......................................................................................................... 14
RECOMMENDATION:.................................................................................................................................................16
REFERENCES............................................................................................................................................................... 17

3
 ACKNOWLEDGMENT:

We would like to thanks our honorable instructor, Miss Nida Mohsin for her kind patience,
guidance and support for the preparation of this report. We will always be indebted to her for the
valuable suggestions and time that she had spent for guiding us throughout the course.

4
EXECUTIVE SUMMARY
Globalization is the process in which organizations and business interact and integrate on the
International scale (world wide). There are challenges faced by companies when they work
internationally which includes language barrier, cultural difference, ownership issues,
environment and etc. Whereas there are some opportunities as well which organization can obtain
while working internationally it includes faster growth, acquire new markets, obtain
diversification, work with foreign partners and also obtain competitive edge. As example of P&G
is also been discussed as the company also faced challenges while working internationally and
currently due to worst economic conditions there are some issue which effect the growth of P&G.
There are some suggestion that a company can used so they can enter in global environment in
which company firstly works on PESTLE analysis of the country, beside this the organization
should do market segmentation and make strategy according to it which vary from country to
country. The organization should also focused on the local advertisement by maintaining the
standardized message around the globe in order to get successful.

5
INTRODUCTION:
Globalization is the spread of products,
technology, information, and jobs across
national borders and cultures. In economic
terms, it describes an interdependence of
nations around the globe fostered through
free trade.

CHALLENGES FOR MANGER WHILE GOING GLOBAL:

Following are the main challenges for manager of the organization face when they work (overseas)
globally.

1. LANGUAGE BARRIER:

It is considered as key factor for any

successful business. When the organization
move global so they have to hire the native
staff in order to run the operation of their
company smoothly and to sale the product
to their consumer easily . But it create a
huge barrier for manger if he/she don’t
understand the language of that native
country in which he/she is doing business,
it could lead the organization backward, because of lack in communication. This deficiency might
effect the decision making process and make it slow because the employees and manger don’t
understand each other. Beside this if the organization don’t hire the native staff so it also effect the
sales of the organization because the communication gap (language barrier) also occur between
sales person and client. So as consumer wont acknowledge the product so they don’t purchase it
either.

6
2. CULTURE OR RELIGIOUS DIFFERENCE:

The culture and religion of each country is differ so, if the culture of particular country cannot be
followed so it become a huge challenge for managers to work on global standards, as consumers
will resist to their product because it don’t stand on there cultural values. As far as religious
aspect it is also important factor to concerned about because it creates an huge issues if the
products standard are not according to the religious values of consumers they they don’t accept it.

3. QUALITY (TQM) AND PRODUCTIVITY:

In this quality mean (total quality management) As

manager is moving globally so the major challenge
which he/she face is quality and productivity of the
product as in the international market there were
already have a large number of competitors who
already established in the market and provide the
best quality in their product and services. So if
mangers don’t focus TQM in there production so they cannot stratify there consumer need
because now the consumers are more aware and they focus and demand the quality from the
organization so if any organization don’t full fill it so they loose there consumers.

4. OWNERSHIP ISSUES:

It it another challenge which manager need to be concerned of because there are huge number of
international investors who are attempt to buy the most stock of newly entered companies in
international markets. Due to this ownership can easily be transfer which effect both the
productivity and profitability of the company. Beside this if ownership is transfer there are
chances that leadership changes as the owner is changed.

7
5. ENVIRONMENT:

As each country have different surrounding,customer preferences and competitors so the main
issue for manger is to identify the intrinsic and extrinsic environment of the company as well as
of country in order to stable in the country and get successful.

6. STRATEGY FORMULATION:

The culture, environment, political conditions of each country is different from each other so it
would be a challenge for manger to formulate the strategy while going global as it could deeply
effect the reputation of organization either in positive or negative way. As different country have
there own demographics so the market segmentation is also differ due to which the strategy also
differ with country. In order to obtain goals manager need to designed there strategies in an
effective way.

8
7. ETHICS AND SOCIAL RESPONSIBILITY:

As the organization is going global so another challenge which the manager face is ethic and
social norms of the country regarding business. As different country have their own social norms
and ethics of the business so while working internationally the manger need to keep working
under these norms. As if it is violated so is could adversely effect the organization, as through this
good will of company can be effected.

8. LAWS AND REGULATIONS:

Every country has its own rules and regulation

which vary from country to country. The
government of the country control the health, tax
law and also measure the safety standards of the
peoples. So it is challenge for mangers to look at the
operations of government and do all possible
research, so that company won’t work involve in nay
activities which are prohibited by the government or which are against the laws, because it would
negatively effect the organization or due to violation of laws government can banned the
companies or even charge heavy penalties.

9. PACKAGING:

As packaging standards are differ from country to country and each country as its own rules and
laws regarding packaging so while working internationally manager need to focus on these laws
because it creates a huge problem if it is not considered and it adversely effect the product and if
organization don’t follows these standards there products would not been expected by the
consumers.

9
10. CURRENCY ISSUE:

As organization is going global so it mean that they are

dealing with foreign currency. So in order to perform
effective and efficient transaction the manager need to
consider the conversion cycle and also look after the
currency exchange rate because it become a huge
challenge if it not properly handle and due
miscalculation of manger organization face huge loss.

11. CHANGE:

The most difficult job for manger to work on is change while organization is going global. As
change is a continues process so organization need continuously to work on it in order to
successfully enter in the market. If manager don’t work on it so the operations of the firm might
be stop which negatively effect the company.

12. EMPOWERMENT:

As it is already discuss that communication is

essential in order to run organization successfully so
while entering in the global market and hiring new
staff the manger responsible to empower their
employees to work together and aim for the
organization and as well as for individual goals. This
is also consider a huge challenge for manager to keep all employees on one platform and make
the decision fairly without and any biased feelings.

10
13. INFORMATION TECHNOLOGY:

It includes the resources required for the information regarding company so it create a challenge
for manger to pick right information for the organization which should be useful. If manager work
on unnecessary information so it would be waste of time and money for the organization and it
also hold back organization performance.

OPPORTUNITIES FOR MANAGERS WHILE GOING GLOBAL:

Following are the main opportunities organization and manager would obtain while they get
global.

1. WORK WITH FOREIGN PARTNERS:

When organization is working internationally so it gets the

opportunity to work with foreign partners which could lead
towards the better understanding towards the cultural practices of
their country as well as collaborating with foreign partner could
lead towards good relation with them which result in greater
benefit or chance of growth for manager and for organization as
well.

2. FASTER GROWTH:

As working overseas (internationally) it allow business to grow by expanding it boundaries

internationally. As working globally mean working with different partner and due to which
investment occurs in the organization beside this when working globally organization experience
new audience which lead the organization toward the fast growth and further expansion.

11
3. ACQUIRE NEW MARKET:

When working in global market managers have opportunities to discover the untapped markets
and grab consumers around the globe. Beside this the organization conquer new territories which
could lead towards development and grow new consumer based due to which extra benefits as
well as better sales and profit can be obtained.

4. OBTAINING DIVERSIFICATION:

When company does international expansion it includes the opportunities of diversify business in
which organization have different areas for investment. From business aspect acquire new market
mean to obtain new assets, working on efficient operation in order to survive in competitive
market in different countries, While working on new strategies and it also allows business to work
on sustainable operation in order to run their whole operation smoothly.

5. ACCESS TO NEW TALENT:

As expanding the boundaries of the company by working internationally the mangers and
organization get opportunities to work the resources available locally in the country where the
company is doing business which including natural resources as well as the talent in that country
(work force). It enhance the external environmental operations of the companies by utilizing the
resources in efficient way. The resources and talent required for production includes raw material
for production, machines, labour and etc. Due to this international talent company can increased
there level of output and it also open up the gates of innovation.

6. OBTAIN COMPETITIVE ADVANTAGE:

When company reached the untapped market in the international business the organization get
first mover advantage or competitive edge over there competitors and beside this it also crate a
prominent brand name and image of company. In additional companies can easily access to the
new technologies and companies can get saturated markets.

12
7. BRAND RECOGNITION:

As organization are moving globally with there

product it mean they are expanding there
boundaries due to which their brand would also
recognized in other countries as well which
increased there credibility and market worth.

8. REGIONAL CENTERS:

When organization move global they try to built reliable service center to satisfy there
international clients. This strategy can be a great benefits to the company as it reduce the
operational cost of the company. Beside this by hiring local employees or worker so they can
easily communicate with the clients and consumers without any complexity due to which
company image is developed and through this organization can also reach wider international
audience.

13
EXAMPLE OF P&G (PROCTER & GAMBLE)
Procter and gamble known as P&G is American company deals mostly with FMCG products and
is the renowned brand which was establish in 1880’s with soap products but after further
development it built a variety of products. Then company start to expand its boundaries in year of
1990’s in different countries after which P&G further introduce more brand names and explore
new areas which includes shampoo brand, detergents, disposable diapers,skin and personal care
products, beauty products and many more. It operates in more than 180 countries which includes
New Zealand, Middle East, Africa, Asia, Australia, North America, Latin America, Europe and
many more.
When P&G starts it operation globally it face some challenges which includes the production on
masses level so to main the quality of productivity according to the cultural and religious norm is
quiet difficult.the company makes flexible production according to the cultural and religious
aspect e.g in a Muslim nation the product ingredient should be halal because if is not so the
consumers won’t except it..Beside this as each country have its own culture so the other problem
which the company faced is advertisements issues as it should not be standardize but vary from
country to country but maintain the message of the product. Whereas company also need to
concerned with the political conditions in each country as it also differ with country to country so
the company need to work with stability because if the political condition in not stable so it
creates an uncertainty for the company due to which investor resist to invest in the company.
Although expanding in different country at a time the major challenge for P&G is to focus the
marketing mix as it vary from country to country and due to this diversification in country or as
well as product strategy of the company differ which create complexity for the company to work
efficiently in each country. As laws of each country is differ so the organization try it’s best to
avoid the violation of laws and beside this P&G also identify the compliance and non compliance
issues and try to resolve as soon as possible, because it effect the brand name. The other issue
which P&G faced is by there competitors which includes uniliver and nestle as they are also the
global companies. As for the current situation company is dealing with many challenges in which
firstly as the management bound shipping distribution in Brazil, Saudi Arabia, Nigeria and Egypt.
So this sudden country-specific issues encompass with competitor challenge and make company
growth slow in these countries. As the commodity cost increases it reduces price and due to which

14
profit margin declines. Beside this the company faced the major challenge due to world recession
and the COVIRD-19 because of this the production of the country becomes slow and due to
which the growth is also be on slow pace.

15
RECOMMENDATION:
When company goes global so they faced the challenges which are discussed in report so in order
to avoid these challenges or minimize their effect the companies need to forecast for any possible
challenged they faced and find it’s solution in advance. It involves legal patterns of country,
culture of country, consumers taste and preferences, religious aspect and political condition of
country. When companies are working on this they need to respect the religious and culture
values and follows the rules and regulation of the country and try not to involved in illegal
activities. Beside this the companies should also focused in the quality of production and it should
be according to consumer taste. While considering all these things the organization should work
om market segmentation and make there strategies according to is as it differ form country to
country. The company should also advertise their product with local standard but maintains the
standardize message world wide in order to get successful around the glob.

16
REFERENCES
https://www.investopedia.com/terms/g/globalization.asp
https://yourbusiness.azcentral.com/challenges-faced-managers-operating-foreign-countries-28423.
html
https://www.linkedin.com/pulse/20140325200143-1687653-going-global-4-major-management-c
hallenges-and-how-to-cope
https://www.businessmanagementideas.com/notes/management-notes/organisational-change/10-
main-challenges-faced-by-managers-organisation/5301
https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2017/12/5-benefits-of-internati
onal-expansion.html
https://www.worldwideerc.org/news/pros-and-cons-of-international-expansion
https://www.fool.com/investing/2018/08/09/how-procter-gamble-can-overcome-its-biggest-challe.
aspx
https://www.thebalancesmb.com/market-research-history-brand-management-at-pandg-2297141

17