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The importance of international business and exporting for SMEs: Challenges of Dubai companies that want to export their products to the UK.
Dubai is located in Asia and forms part of the UAE it is the second largest country of the federation but has the largest population with an estimated population of 1,450,000.
Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East.
Its low logistical and operational costs and excellent infrastructure, international outlook and liberal government policies are attracting investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.
All in all these indicators point to the fact that Dubai is alive with possibilities for expansion in all areas. Although experiencing it's current economic rescission Dubai has still outperformed expected rates in terms of economic growth and development.
1.3 RATIONALE FOR CHOSEN TOPIC
In today`s developing and growing world it is getting harder everyday to expand your business internationally. So the importance of choosing right strategic plan has become a factor that needs to be considered and implemented broadly by the companies which want to survive in today`s global market. For the purpose of struggling against some additional difficulties when going internationally, companies have to consider of the importance of international business and being awareness of implementing an effective strategy on an international level .
1.3.1 The Importance of International Business
International business is a process that all business transactions are private and governmental. It involves two or more countries. To understand the importance of going internationally, it would be good to find out the answer of this question; "why is international business important especially for domestic companies?" The simplest answer is that international business has a large and growing portion of the world's total business. Today, many companies all around the world, large or small, are influenced by global issues and competition because most of them sell output to and/or secure suppliers from foreign countries and/or compete against products and services that come from abroad.
International business is a kind of opportunity for the countries and the consumers to be exposed to these services and goods which are hard to find in their own region. Clothes, food, jewelry, stocks, wines, spare parts etc. and many more products are always ready to use all the time in international markets. Providing a service is also done with some ways such as; banking, consulting and transportation, and tourism. The goods and services that are bought from the global market are called imports and the goods and services that are sold in the overseas market are called exports.
"International business is also an opportunity for developed countries. It provides them to use their resources effectively such as technology, capital and labour. As large number of the countries already have natural resources and different assets (labor, technology, land and capital), they are able to produce many products more efficently and sell at cheaper prices than other countries." (Ricky Hussel, 2008)
A large number of the international business researchers disscus that exporting is one of the most logical entry methods, which let the companies understand the target country's sutiation, using the suitable marketing mix, developing a marketing plan based on the use of the mix, making a plan through a strategy and finally, using a control method to ensure the strategy is doable. This exporting process is revised and evaluated regularly and modifications are made to the use of the marketing mix, to take account of market changes affecting upon competitiveness.
Today`s business situation around the world, both large and small, cannot ignore the impact that the global economy is having on their performance.Â Globalisation, the internet, and information transparency have led to an increasingly mobile workforce, ever more rationale customers, and rapidly changing technologies and business models.Â
1.3.2 Competing on an International Level
It always seems to be quite difficult for companies to start competing on an international level. To get this, an international marketing strategy has to be developed related to the products and services that the business plans to offer to their customers. It is also important to understand what their long term goals. There is very little point for a company to target their domestic market on a few short term goals. This means preferences need to be determinate for all of these markets. This will require a well founded research.
1.4 AIM AND OBJECTIVES OF RESEARCH
In the light of identified rational following objectives are set for this study;
-To examine the reasons of going international for domestic companies.
Many companies start their overseas marketing involvement from the basis of a well-established home market. The answer of the question of "why go international markets" can be given due to variety of reasons;
Saturation of Home Market
The facilitate growth
To achieve lower unit costs
Depressed demand in the home market
-To classify different marketing levels.
It is important and vital to understand the major diffrences among the market types such as domestic market, international market and global market as they are all interconnected to each other.
-To identify international marketing environment.
The international marketing environment is most likely to face a complex constellation of demands as it attempts to enter competition. It is one of the most significant issues to identify customer values in international market, so it requires a sophisticated perception of differentiated expressions of customer needs.
-To analyse environmental influences on international marketing.
Growing through foreign market expansion has become an increasingly important strategy by the domestic companies as previously closed foreign markets open and as economies all around the world globalize. Technological advantages in transportation and communication encourages the smaller firms to find it easier to expand its border internationally.
-To understand the differences and similarities between Dubai and UK markets.
It is clear that there can be big cultural, social, economic differences between 2 different, especially if they are from different conntinental. So, it will be much better for the companies that want to go internationally to take into account these differences.
-To gather the right primary and secondary data to be able to advice for them.
Researchs always aim to show the right way to the people to the organizations on their road. So, the data need to be collected properly and correctly.
2- LITERATURE REVIEW
2.1- CLASSIFICATION OF DIFFERENT MARKETING LEVELS
2.1.1 Domestic/Home Marketing
"Domestic marketing includes companies managing a series of controllable variables such as advertising, price, distribution and the product or service attributes in a largely uncontrollable external environment which is made up of different economic structures, competitors, cultural values and legal infrastructure within specific, political or geographic country boundaries." (Doole, 2008)
2.1.2 International Marketing
As a simple definition, international marketing includes the companies making one or more marketing mix decisions across national boundaries. As a more complex definition, it includes the companies establishing manufacturing/processing facilities around the world and coordinating marketing strategies across the globe. At one extreme, there are some firms which select international marketing simply by making a distribution agreement with a foreign firm who then takes responsibility for pricing, promotion, distribution and market development. "At the other extreme there are massive global companies such as Toyota with an integrated network of manufacturing plants worldwide and who has hundreds of country markets. Thus, its most complex, international marketing becomes a process of managing on a global scale. These different stages/levels can be defined in the following terms". (Doole, 2008)
It also includes managing operating across number of foreign country markets in which not only do the uncontrollable variables differ significantly between one market and another. "The controllable factors such as cost and price structures, opportunities for advertising and distribute infrastructure are also likely to be different significantly. It is these kinds of differences that lead to the complexities of international marketing." (Doole, 2008)
2.1.3 Global Marketing
This kind of management is a larger and more complex international operation. There is always a company coordinates, integrates and controls a large numbers of marketing programmes into a substantial global effort. "The primary objective of the company is to achieve a degree of success in the overall operation so that by taking advantage of different exchange rates, tax rates, skill levels and market opportunities the organisation as a whole will be greater than sum of its parts." (Doole, 2008)
2.2 DIFFERENCES BETWEEN INTERNATIONAL AND DOMESTIC MARKETS
"There are many factors within the international environment which substantially increase the challenge of international marketing. These can be defined as followings;
Culture: often diverse and multicultural markets.
Markets: wide spread and sometimes fragmented.
Data: difficult to obtain and often expensive.
Politics: regimes varity in stability - political risks become an important variable.
Governments: can be a strong influence in regulating importers and forcing business ventures.
Economies: varying levels of development and varying and sometimes unstable currencies.
Finance: many differing finance systems and regulatory bodies.
Stakeholders: commercial, home country and host country.
Business: diverse rules culturally influenced.
Control: difficult to control and coordinate across market." (Doole, 2008)
2.3 COMPARISON AND COMPLEXITIES OF THESE LEVELS
For achievement in all these levels, the core point is to operate a good marketing strategy and being able to analyse and perceive the difficulties of each PESTLE factors (Political, Economic, Sociological, Technological, Legal and Environmental) of the international environment and how they affect a company's marketing strategies across their international markets.
When domestic and international marketing are compared, it is argued that"what differences there are between these two markets ". Actually, the key elements are still same. "The concept is not likely to change to any market degree when a company moves from a domestic market to an international market. However, two main differences can be defined. First, of them, there are different approaching levels depending on international scope, and second, the company will be likely to face complexities and difficulties as the result of international marketing environment factors as it mentioned above." (Lowe R., Doole I., 2001)
When management gets involved in international area they will face some extra complexities. To sum up, a successful marketing research may be even more important in an international environment because of these extra complexities as well as the additional risks and the consequences of failure.
2.4 ENTERING A FOREIGN MARKET
For the majority of companies, the most important international marketing decision that they are most likely to take is how they should enter new markets, as these decisions which they make will directly affect every part of their business for many years in the future. There are advantages and disadvantages with each market entry method and critical in the decision-making process are the firm's assessment of the cost and risk associated with each method and the level of involvement the company is allowed by the government, or want to have in the market. "These factors determine the degree of control it can exert over the total product and service offer and method of distribution." (Chee and Harris, 1993) There is, however, no ideal market entry strategy and different market entry methods might be adopted by different companies entering the same market and/or by the same company in different markets.
Before entering international marketing, if we reflect on our perception what marketing means itself, we will face a few important definitions. According to Chartered Institute of Marketing, marketing is a "Management process which is responsible for identifying, predicting and providing customer requirements profitably". (Lowe R., Doole I., 2001)
providing customer needs and wants,
finding out best ways and methods to provide these needs and wants,
orienting the firm towards the process of focusing on that satisfaction,
Meeting organizational objectives.
In this way, it becomes important for the companies or organizations to prepare themselves to achieve competitive advantage in the market. "They will then need to work on taking this advantage in the market. They will also need to work on taking advantage by manipulating controllable functions of marketing, within the uncontrollable marketing environment which is directly affected by SLEPT factors, i.e. Political, Economic, Socio-Cultural, Technological and Legal." (Lowe R., Doole I., 2001)
2.5 CHALLENGES IN ENTERING A FOREIGN MARKET
When deciding to enter a foreign market, a company may face a significant number of barriers. According to Keren (2002) "the comparative disadvantage of transition economies (TEs) in the provision of business services is, by definition, a comparative advantage and a profit generating opportunity for foreign firms to step in". Furthermore, 'given the description of the business environment in the early stages of transition, one may expect objective difficulties for a foreign company to operate". However, there might be also "intentional barriers which change according to interests of domestic monopolistic providers."(Keren et al., 2002).
According to Buckley (1989), SMEs are likely to face some ample barriers when they go internationally because of their small sizes, limited financial and human resources, information constraints, insufficient management experience and market imperfections and regulations.
2.6 THE INTERNATIONAL MARKETING ENVIRONMENT
As it was mentioned above, the key difference between domestic marketing and marketing on international environment is the multidimensional and complexity of the many foreign country markets can operate in an international marketing researcher needs to have a knowledge and awareness of these complexities and implications they have for international marketing research. There are a lot of environmental analysis models that analysis the impact of the complexities faced by international marketing researcher.
For one of the purposes of this assignment, SLEPT approach will be used and various aspects and trends in the international marketing environment will be examined through the social/cultural, legal, economic, political and technological dimensions as it shown in figure 1.
Less developed economies
Legal domestic laws
Home domestic law
The electronic superhighway
Values and Attributes
Environmental influences on international marketing
Figure 1. The Environmental Influences on International Marketing (Doole, 2008)
2.6.1 Socio Cultural Environment
The social and cultural environment has a significant impact on international marketing. Variations in social conditions, religion and material culture all influence buyer mind and patterns of buying behaviour. "It is this structure that determines the extent to which customer across the globe are either similar or different and so determines the potential for global branding and standardisation". (Doole, 2008)
A failure to understand the social/cultural dimension's of a market are complex to manage. A good example of this can be shown as Mc Donald's found in India. Mc Donald had to deal with a market that is 40 percent vegetarian, and also they had an aversion to either beef or pork among meat others and hostility to frozen meat and fish, to make consumer happy. McDonalds has discovered it needed to be done more than provide the right burgers. Customers purchasing vegetarian burgers wanted to be sure that these meals were cooked in a separate area in the kitchen and by using separate materials and sauces such as McMasala and McImli were developed to satisfy the Indian taste for spice. Interestingly however, these are now innovations they have introduced into other markets.
2.6.2 Cultural Environment
"Cultural differences and especially language differences are one of the most important factors on the way a product can be used in a market, its brand name and advertising campaign". (Doole, 2008)
A large number of examples can be given about how cultural factors affect it dramatically. For instance;
Coca Cola had a big problem in China as coca cola sounded like kooke koula which translates into" a thirsty mouthful of candle wax". They managed to find a new pronunciation "Kee Kou Keele" which means "joyful tastes and happiness".
General motors whose brand name is Nova was unsuccessful in Spain, because "no va" means "ne go" in Spanish.
Pepsi Cola had to change its campaign name Come Alive with Pepsi in Germany as it means "Come Alive Out if the Grave"
In Japan Mc Donald's character Ronald Mc Donald was unsuccessful because hic white face was seen as a death mask.
Running effectively internationally requires recognition that there can be significant differences in the different regions. A campaign by a soap company that showed a husband washing his wife's back in the bathroom was a big success in France but failed in Japan because Japanese women viewed the prospect of a husband sharing sometime as a huge invasion of privacy.
As examples have shown cultural factors has a considerable influence on international marketing.
2.6.3 Legal Environment
Legal systems vary both in content and interpretation. A company is not just bound by the laws of its home country but also by those of its host country.
It is important for the company to know the legal regulations in each of its markets. The legal environment in international marketing is more complicated than in domestic market since it has 3 dimensions:
Local domestic laws
Domestic laws in the home country
Laws directly influence the marketing mix in terms of products, price, distribution and promotional activities. For many company, the legal regulations they face in international markets are almost twice more difficult. Firms often face ethical challenges in deciding how to deal with differing cultural perceptions of legal practices.
2.6.4 Economic Environment
It is very important for an international marketer to understand economic developments and how they affect marketing strategy. Amongst the 194 countries in the world, economic conditions vary from one to other. Gross national income in the world is not shared equally across the world. Another key challenge facing companies is about how they can develop an integrated strategy among number of international markets when there are different levels of economic development.
2.7 STRATEGIES FOR ENTERING AND DEVELOPING INTERNATIONAL MARKETS
"As it has still been identifying by the companies that the process of entering to an international market and then being succesfull in it is a difficult and complex task. With the other words, entering to a new country`s market is very similar sutiation like start point in a race, without sales, without marketing infrastructure in place, and a bit or no experience of the market. In spite of this, companies are most likely to get this as if it was a development of their business." (Arnold, 2003) In fact, it is is more likely to see the international markets as opportunities to increase the sales of existing products and so to get used to a "sales push" more than a market-driven approach. The relation between this perspective and a view of international sales as incremental business is self-evident. And, after all, a lot of firms penetrate new country-markets through the indirect channel of a local independent distributor or agent, in which case the multinationals will not know their costs and thus their operating profitability in the markets. "Although more mature firms have been changing the way that they select and penetrate into new international markets, the mixed results in the past, in 2001 recession demonstrate that this remains a challenging phase of internationalization." (Arnold, 2003)
2.8 INTERNATIONALIZATION AND SME PERFORMANCE
"Small and medium-sized enterprises (SMEs) play an important role in today`s global economy. While it makes a substantial contribution to competitiveness, innovation and job creation in local economies, at the same time, provides a condiderable shares in investment, production and trade within and across countries." (Acs and Audretsch, 1998) "Expanding borders by going internationally, the companies become profilic producers of technology, transfering it to the use of firms of different sizes across borders, initiating and/or facilitating revolutionary changes in production techniques." (Marcotte and Niosi, 2005) "SMEs are likely to affect the general process of political and social liberalization in a society, while they also have economic and structural roles." (Futo and Kallay, 1994) According to Reynolds (1997), developed economies of the future will not be dominated by old and large companies. Therefore, it can be expected that the economy of the world will be more related to SMEs activities.
While some literatures have agreed that internationalization will benefit the performance of many companies, the relationship is less clear for SMEs mainly related to concerns about their international constraints and ability to be competitive in international areas. Since many studies (Lu and Beamish, 2001; Oviatt and McDougal, 1994; Smith, Gannon and Mitchell, 1998) have noticed that SMEs are not simply smaller versions of huge multinational companies and have some differentations in ownership, resources, organizational structures and management systems.
2.9 THE CONTRIBUTION OF MARKETING INFORMATION TO EXPORT SUCCESS
"Despite the agreement that marketing information is the key point for business success in both domestic and international areas, there have been surprisingly few empirical studies which examine the relationship between marketing research and firm performance in international market domain. Various empirical studies have concluded that marketing research is really a significant factor in firm`s success in international area." (Hart and Tzokas, 1999) For instance, Hooley and Lynch (1985) mention that the level of using marketing research has a positive affect on firm`s effectiveness. While Hart (1987) and Baker, Hart and Black (1988) suggest that more successful firms give more importance to research than the others. Especially for small firms, Dollinger (1984) explored a positive relationship between the use of the environmental information and small company`s financial success.
There will be some similarities and differences between Dubai and the UK about international marketing environment that need to be analysed perfectly before Dubai Company starts exporting. As it was citied by Lancaster, Massingham and Ashford (2002), these similarities and differences are likely to be between the following factors;
Economic: Population figures, salary levels and distribution, price levels, inflation, resources, economic structure, economic stability.
Market: Size; stages in product life cycle; market penetration level or average consumption level per annum; market segmentation; availability of media, services, distribution.
Cultural: Material culture, (for example, role of women); social structure and family relationships; social relationship, religion(s), language.
Political Environment: Incentives for joint venture/wholly owned manufacture (e.g. tax exemptions), protection against competitive imports (tariffs and quotas). Risks of appropriation or domestication of foreign owned manufacturing plant.
Legal: There is no true international law, despite attempts to reconcile different legal practise have been made. For instance, in Spain, The Madrid Convention protects trade marks of signatories in all member countries.
2.10 INTERNATIONAL MARKET PLANING
Entering an international marketing with a developing plan means that your company is entering both a new country as well as a new market. The entry mode (export, contractual or investment) determines the level of company`s control over the marketing program in target country. "For instance, indirect exporting and pure licensing allow little or no control over the marketing programme". (Lowe and Doole, 2004)
2.11 WHY DO EXPORTING?
Exporting can be seen as either an opportunity or a threat, especially for a small company. If its aim covers short term or is related to personal idiosyncrasies of executives, or if no country or market examination is carried out, exporting is likely to be a threat. On the other hand, a lot of small firms shy away from exporting believing that they lack resources and expertise or in general terms are not suited to such a risky venture, but in reality, size can not be a hindrance, if the company is competitive and committed.
According to Cannon and Willis (1985), when a comparison is made with large firms, small firms have a number of advantages;
The small firm can react quickly to export opportunities.
It might be easier to control the management activities of exports.
The management of a small enterprise is always quite easy. Therefore, foreign consumers may deal with the same people over a period of time getting to know each other and making a business relationship.
As customers have a high level of knowledge, it may come to incentive to deal efficiently with them, something bigger firms can not be noted for.
Although at the first time a SME usually does not have employees with export experience, there are export support organizations in many countries which are able to give support and training about export management.
According to Financial Times (1987), however, some threats exist, as exporting cannot be suitable for every company and the minority on small company resources when a costly foreign market failure can be a big problem for the entire future of an enterprise. As it has been suggested by the British Overseas Trade Board (BOTB) in the UK, the unprepared potential exporter may face with the following problems;
The export opportunity usually appears when a firm struggling within domestic market.
There is usually no correlation between the size and the capability of the firm and the scale of the opportunity.
The larger the opportunity, it is more likely to happen that the firm is deluded into consideration that they may win the business.
The closer one gets to the opportunity, the more illusory it becomes.
The key features underlying the comments above are that for the firm to be successful, it has to be committed to exporting and has to be reasonably organised and prepared in its approach to foreign markets.
As it has been mentioned a few times earlier, exporting overseas is a strategy that firms use for at least some of their markets. "Since a large number of countries do not offer a large enough occasions to justify local production, exporting may allow a firm to produce its products for several markets, therefore, to obtain considerable revenue. Moreover, since exports provide an additional volume to an already existing manufacturing operation located elsewhere, the marginal profitability of exports tends to be higher". (Hennessey, 2001)
According to Albaum, Stranskov and Dowd (1998), it can be assumed that some forces that drive the firm either start exploit export activities are that the firm wants to utilize and improve its resources depending upon its short-term and/or long-run economic objectives are served. As a consequence, export motives will be interrelated to the basic goals of the company. These general export motivational factors are;
growth and profit goals
managerial urge and risk diversification
exploitation of foreign market opportunities
economies of scale
extending sales of a seasonal product
Excess capacity of resources
seeking unsolicited orders
the existence of a small domestic market
stagnant or declining home market
2.12 WHY FIRMS START TO EXPORT?
"Studies on export behaviour have shown that there are varieties of reasons why firms start exporting. Bilkey and other researchers concerned with the initiation of the export process have tended to focus on the effects of change agents, either external to the firm or internal within the firm." (Bilkey, 1978) External change agents include chambers of commerce, industrial associations, banks, government agencies and other firms. "The latter appears to be overwhelmingly the most important external agent and includes firms that buy out smaller companies and then encourage them to export, foreign importers and export agents. Studies by Simpson and Kujawa and others have asked companies what first stimulated them to start exporting." (Turnbull and Valla, 1986)
In many cases, the firm's first export order was unsolicited. Hence for a lot of companies the start of their export experience is not planned in any formal way but simply arises, seemingly by chance; and certainly for companies that fail in their export efforts it would seem that quite often a haphazard and ad hoc approach to exporting had continued.
According to Cavusgil and Nevin (1981), "it is also evident from the literature that the internal change agent tends to be a member of the firm's top management who is interested in and enthusiastic about exporting. Several studies have already identified management characteristics as an important factor in the export initiation process."
Cavusgil found that export behaviour appears to be explained by four factors, including the expectations of management and the strength of managerial aspirations, concluding that: "variations in export activity can be explained, to a significant extent by organisational and management characteristics. Expansion of export activity among the firms studied is clearly related to management's expectations concerning the effects exporting will have on firm's growth, market development and profits: technology orientation of the firm; management attitudes towards risk taking and desire to develop new markets; and the extent of resource allocation to exporting as exemplified by systematic exploration of foreign market opportunities, and the formulation of a fixed export policy." (Cavusgil, 1984)
Bilkey (1978) argued that four factors were related to whether or not management took the initiative in exporting:
Management's impression of the overall attractiveness of exporting as an abstract ideal, independently of whatever particular contribution exporting might make to its own firm. Note the latter cannot be known by management until they explore the feasibility of exporting or gain export experience.
The degree of the firm's international orientation. Some studies suggest that this is determined by the firm's background and traditions and by the foreign attitudes of its top managements correlate, in turn, with whether or not they had to studied a foreign language in school; whether or not they had lived abroad sufficiently long to have experienced cultural shock; and whether or not that foreign experience was attractive. The manager's ages are also relevant, younger ones tending to be more internationally minded than older ones.
Another determinant is management's confidence in the firm's competitive advantage. This is measure as a composite involving management's perception of whether or not the firm's product have unique qualities; management's perception of whether or not the firm has technological, marketing, financial or price advantages; whether or not the firm possesses exclusive information about a foreign market or customer; whether or not the firm has a patented product; and whether or not the firm has an efficient distribution network.
A fourth determinant of whether or not management takes the initiative in exporting is adverse home market conditions, causing management to explore exporting as a means of ensuring the firm's survival. The relationship of this initiative to general economic conditions varies greatly among firms, because of the differential impact of macroeconomic conditions at any given time on particular industries.
Literature reviev can be defined as the inputs of the research. It might be called skeleton of the dissertation. It is a good determinant to draw the research`s general picture in our mind. This picture will be supported in data analyses chapter by gathering primary and secondary data.
It can also be compared to a foundation of a building. As it is known that without laying the foundation, the structure will not be strong. Because of this, in this chapter, existing literature which cover all literature regarding the research`s aims and objectives has been studied so far.
3. RESEARCH METODOLOGY
Methodology is the analysis of the principles of methods, rules, and postulates employed by a discipline.
In methodology literature, research is defined as "the systematic collection and interpretation of information with a clear purpose to find things out" (Saunders et al., 2003) and there are two different philosophies in the research methodology which are called positivist and phenomenological philosophies.
In the process of this study, several methods and techniques will be used in which this part provides information about why and which methods will be chosen in conducting this research.
3.1 RESEARCH QUESTIONS
Accordingly, this study will answer the following questions;
What challenges is a Dubai SME (small medium-sized enterprise) likely to be faced when it wants to enter the UK market?
What are the main differences between Dubai domestic market and the UK market?
In which level may an effective marketing research contribute the success of Dubai Company?
Why is exporting frequently considered the simplest way of entering foreign market and favoured by smaller firms?
What are the alternative entry modes for a Dubai SME to enter the UK market?
3.2 RESEARCH APPROACH: QUALITATIVE APPROACH
"Qualitative data are non-numerical data that have not been quantified. They result from the collection of non-standardised data that require classification and are analysed through the use of conceptualisation." (Saunders et.al, 2003)
Quantitative method is more objective than Qualitative method. At the root of Qualitative approach, analysing and reflecting on the intangible aspects of research subject such as values, attitudes, perception, emotion and feeling, are important points. In this proposal, qualitative approach will be implement pretty more than quantitative research, because most of the key points of the proposal are more theortical. The most of the core points are about environmental structures that impact companies. These key points are related to people`s belief, cultural and social values, legal factors and etc. "Qualitative approach depends on data that cannot be subjected to quantitative or numerical output in order to examine these value, belies, attitude and feeling between organizations and accordingly people. It is associated with phenomena that cannot be or is difficult to quantify." (Lancaster, 2005)
3.3 DATA COLLECTION METHODS
As the qualitative approach is required, following research methods will be suitable for this study.
3.3.1 In-Depth Interview:
"In-depth interviews, that are main source for primary data in Multiple Case Narrative, are in many if not most cases, the only data resource of research." (Shekedi, 2005)
This research method is generally used for qualitative researches. The aim of this interview is neither easy to get answer to question, nor to test hypotheses. "At the root of this method, the important goal is to perceive the experience of other people and the meaning that they make of experience. Interview provides contact to the context of people`s behaviour and also enables researchers to perceive the meaning of this behaviour." (Siedman, 1991)
In the dissertation this method will be taken as a part of qualitative approach. Some people from top management level will be interviewed.
"It is one of the best known and widely used data collection methods. Questionnaire enables the researcher to get the data by asking all, or a sample of people, to answer to same questions." (Saunders, Lewis, Thornhill, 2003).
In this study, the questionnaire method will be used as well. Related questions will be prepared in a form format.
In this part of the analysis, a survey form which will be prepared by the researcher is going to be sent to 15 respondents as it has been done in questonnaire. Prepared survey questions will be sent them via internet. The questions that are likely to be asked will be as followings;
Which reasons have you pushed to do international business?
What can you say about differences between domestic and international market?
How can environmental factors such as social, legal, economic, political and technologic factors influence your international business performance?
As a SMEs (Small and Medium-sized enterprises), what are the advantages of exporting for you?
Which exporting strategies have you implement so far, and why?
What do you think about impotance of implementing a right export decision process?
What kind of challenges have you already faced in your exporting activities?
3.4 DATA ANALYSIS
"Analysing data is a process that converts data into information which can be served to provide easier perception of concepts, theories, and explanations". (Lancaster, 2005)
This chapter provides example of study, and data analysis about example, and result of the findings of this research, and the suggestion of the findings in relation to existing literatures and project aim.
In this dissertation, regardless of which research method is preferred, to reach the right answer every single element of methods will be analysed. The purpose of this chapter is to provide the output of the research, data analysis about example, and result of the findings of this research, and the suggestion of the findings in relation to existing literatures and research aim.
Sampling which is collecting data from a representative SAMPLE of the population that they are interested in. In this research, sample will be ten Dubai SMEs which have already been doing exporting to the UK market. They were selected by the researcher because they had the longest history on doing exporting to the UK. They had also been doing business with many different countries all around the world. So, it can be said that they have considerable amount of experience of doing international business especially an exporting.
Companies, especially small and medium-sized enterprises (SMEs) have been competing to each others to get a share from big cake of the global world markets. Because of this, the situation of SMEs has also been getting more and more significant. SMEs which are able to have the perception of the importance of this importance are likely to reach to the success. For this reason, to understand the importance of going internationally, it would be good to pay more attention on this and try to find out why international business is significant, especially for SMEs?
The first thing to be carried out for SMEs when it has decided to go internationally is to determine its international business strategy and find out the best way to enter the foreign markets. That decision needs to be related to company size, its objectives, target market potential and how much involvement the company needs to do.
Some companies select the way that entering the market with a minimum investment, while the others are make much bigger investments of capital and management effort to launch and provide a permanent and specific share of global markets. Both selections may be profitable according to firm`s capacity, its previous experience in foreign markets and its product variety.
When a company has made a decision to go internationally, it must choose an appropriate entry mode. This decision should reflect an analysis of market potential, company capabilities and the degree of marketing involvement and commitment.
A company`s approach to a foreign market can require minimal investment or a company can make large investments of capital and management effort to capture and maintain a permanent and specific share of world markets. Both approaches can be profitable which is dependent to firm size, its experience in international area, its product variety and so on.
As mentioned above, there are many foreign market entry strategies. Each has particular advantages and shortcomings depending on company strengths and weaknesses. From this perspective, it can be said that exporting is one of the most appropriate foreign market entry strategies especially for small and medium-sized enterprises which have no experience in international areas. When a company has decided to enter the international markets by exporting from the home country, this means that that company has selected the easiest and the most common approach which is employed by companies taking their first international step, because the risk of financial loss can be minimised.
Briefly, the systematic plan of dissertation has been analysed so far. Even if there might be some little changes in some parts, the main structure will be like this. To get the best results data collection process will start as soon as possible by using the methods which mentioned earlier.
5- TIME SCALE
Read Methodology Literature
Devise Research Approach
Draft Research Strategy and Method
Draft Findings Chapter
Update Literature Read
Complete Remaining Chapters
Draft to Supervisor for Feedback
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