Strategic Planning In International Business Business Essay

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International economic integration is not a new phenomenon. Some communication and trade took place between distant civilizations even in ancient times and since the travels of Marco Polo seven centuries ago, global economic integration-through trade, factor movements, and communication of economically useful knowledge and technology-has been on a generally rising trend. This process of globalization in the economic domain has not always proceeded smoothly; nor has it always benefited all whom it has affected. However, despite occasional interruptions, such as following the collapse of the Roman Empire or during the interwar period in this century, the degree of economic integration among different societies around the world has generally been rising. Indeed, during the past half century, the pace of economic globalization has been particularly rapid. With the exception of human migration, global economic integration today is greater than it ever has been (Crafts).

Three fundamental factors have affected the process of economic globalization. Firstly, improvements in the technology of transportation and communication have reduced the costs of transporting goods, services, and factors of production and of communicating economically useful knowledge and technology. Secondly, the tastes of individuals and societies have generally, but not universally, favored taking advantage of the opportunities provided by declining costs of transportation and communication through increasing economic integration. And thirdly, public policies have significantly influenced the character and pace of economic integration, although not always in the direction of increasing economic integration (Mussa).

International business research is about enterprise development in another country. Enterprise development, especially as it relates to micro, small and medium enterprise development is a complex endeavor with many facets such as looking into the policy environment, entrepreneurship, innovation, competitiveness, subcontracting, etc. These facets of international enterprise development require investigation and research ("Enterweb").

International Business Entry

Many countries make it attractive to incorporate in their area, even when activities are to be conducted elsewhere. In fact, there are so many tax efficient jurisdictions that an initial problem for most organizations wanting to form an international business company, is how to select from the available options. Belize is such a country that entered the offshore industry after carefully analyzing and adopting the best features of some of the best offshore jurisdictions in existence. Its long history of democracy and stability, enhanced by its legal system which is based on English common law, have made it the premier source for easy market transition ("Belize Offshore Consultants"). Multinational Corporations

A multinational corporation is a company or enterprise operating in several countries, usually defined as one that has 25% or more of its output capacity located outside its country of origin. The world's four largest multinationals in 1994 were General Motors, Ford, Exxon, and Shell. Their total sales exceeded the gross national product of all of Africa, and the top 100 multinational corporations controlled $3.4 trillion in financial assets. In 1993, multinational corporations accounted for one-third of the world's industrial output, with sales of $4,800 billion. They are seen in some quarters as posing a threat to individual national sovereignty and as exerting undue influence to secure favorable operating conditions. Unsuccessful efforts were made 1992, under UN auspices, to negotiate a voluntary code of conduct for multinationals, but governments and corporations alike were hostile to this idea. In 1993, 11 of the 100 largest multinational corporations were British ("Hutchinson Family Encyclopedia").

Strategic Planning in International Business

The strategic plan must be developed and owned by the management team that has the job of implementing it. Strategic planning in international business must be objective. After international business research, the international business must define a first year operating budget, build an infrastructure flexible enough to meet expansion needs, and prepare the company for expansion. It must understand different growth options available for developing transatlantic operations, and know the risks and rewards of each. The international business must also build a long-range plan, and then adhere to that plan. It must find the right mix of direct and indirect operations, and the right rollout sequence to keep risk low while maximizing longer-term market share and revenue potential. To craft a good business strategy for international success, the company must have broadened awareness, coupled with business experience. Specialized organizations such as Atlas Venture help international businesses formulate the strategic plan ("Atlas Venture").

International Marketing

International Marketing Services, Inc, (IMS) is a uniquely positioned international marketing firm. Since 1986, it has assisted over five hundred US, European and Russian companies export products, develop joint ventures, locate foreign investment, and form strategic relationships. Its extensive experience with business practices and culture in North America, East-Central Europe and the C.I.S. is the foundation of its success. IMS' cross-cultural perspective allows it to rapidly overcome significant obstacles to export sales and joint ventures that most firms are unequipped to deal with alone. The company also brings broad analytical skills to bear on its global projects. This includes substantial international trade and joint venture negotiations expertise, market and competitive assessments, macroeconomic, financial and statistical analyses, and political risk evaluations. In addition to broad skills, IMS' employees hail from diverse backgrounds and industries. The company offers a full spectrum of services ranging from one-time primary market research assignments to marketing and strategy consultation where it walks its clients through each difficult stage of expanding their business presence abroad ("International Marketing Services"). The successful operation of IMS indicates the factors needed for lucrative international marketing. These factors include knowledge of culture, political risk evaluation, etc.

International Services

International businesses like Shell provide international services. Shell Services International provides, among many other specialized services, electricity in the US. Shell Energy was formed in 1997 to pursue new growth opportunities in the retail electricity and gas markets that have recently been opening to competition. Today, Shell Energy serves more than 300,000 gas and electricity customers in Ohio and Georgia ("Shell Services International").

International Logistics and Supply-Chain Management

International logistics are about international freight forwarding, moving and storage, warehousing and storage, project shipping, office building and letters of credit. Currently, there are organizations that specialize in making the task of international logistics easier for international business ("International Logistics Management"). A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to consumers. The geographic placement of production facilities, stocking points, and sourcing points is the first step in creating a supply chain. The strategic decisions include what products to produce, and which plants to produce them in, allocation of suppliers to plants, etc. Inventory decisions refer to means by which inventories are managed. And the mode choice aspect of transportation decisions is the more strategic ones (Ganeshan and Harrison).

Multinational Financial Management

International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations are increasingly becoming multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have formulated policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available and this field is that of multinational financial management (Reid).

Countertrade

Countertrade simply refers to listening to the company's international customers and meeting their needs. This could be in the areas of hard currency generation, technology transfer, or marketing assistance ("The American Countertrade").

International Accounting and Taxation

In Malta, taxation of an international trading company (ITC) is based on the Tax Refund Mechanism. An ITC is taxed at the normal company rate of tax, which is currently about 35%. Non-resident shareholders of an ITC are taxed at a flat rate of 27.5% on all distributions received from the firm. Non resident shareholders of an international holding company which has a participating holding in a non-resident company qualify for a full refund of the Malta tax paid by the Maltese company on income arising from these foreign holdings. Such refund is triggered upon a distribution of this income to the non-resident shareholders of the Maltese firm ("Accounting and Taxation").

International Human Resource Management

Effective management of expatriate managers is one of the most important areas in human resource management, and there is abundant research on expatriates of American, European, and Japanese multinationals with large expatriate populations. In the age of globalization, strategic management of human resources is becoming critical for organizational survival. Global business environments demand flexibility and rapid response and there is a growing realization that the human dimension provides the key to flexibility and adaptability in organizations. Multinational and transnational corporations have been increasingly aware of the growing necessity to have not only international business strategies, but also international human resource strategies. Just as international business strategy is likely to have unique features and needs to be understood well, international management of human resources has its own peculiarities that have to be managed well to be able to flourish in overseas operations (Naresh).

Organization, Implementation, and Control of International Operations, and their Future

Effective management of international business operations includes efficient management of finance, personnel, product development, marketing, and communication. This is so that the organization, implementation and control of the operations go well. The future of international business is bright as globalization and the need for universality continue.

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