This paper intends to discuss the risk associated with the internationalization process. The case study of Global Furniture Ltd. has been considered for the purpose of this study. Moreover, the impacts of internet on the export strategy formulated by the company has been analysed in the paper. Based on the analysis, recommendations have been provided to improve the export strategy of the company.
Internationalisation is the process of expanding the activities of the company in the international market for gaining competitive advantage in such an era of global competitive market and become a reputed brand cross the globe (Hitt et al., 2016), Buckley and Ghauri, 2015). The main purpose of this assignment is to analyse the existing risks of internationalisation for the brand Global Furniture Ltd for identifying an appropriate strategy for exporting and importing so that the brand can expand their services across the globe. This assignment provides a scope to analyse whether exporting is the right strategy for the firm Global Furniture Ltd or not. Through effective analysis, it is possible to understand the right strategy of the brand through which they can internationalise the business successfully to a new international place. After identifying the right strategy, it is also important to understand the impacts of internet on the export market strategy and recommend some suitable payment methods through which the brand can export their products and provides efficient services to the customers worldwide (Regner and Zander, 2014). In this regard, it is also essential to suggest effective internationalisation strategies for the brand so that they can place it in new international place and gain competitive advantage over other competitive brands in the market.
2. Risk associated with internationalisation
There are several risks for the small business firms such as Global Furniture Ltd for expanding the brand in new international market. Due to the risk factors, the small enterprises sometimes fail to adopt the right expansion strategy for expanding the brand in the new market (Musso and Francioni, 2014; O’Callaghan, 2016). The risk factors for the organisation Global Furniture Ltd can be evaluated below:
There are mainly four risks for which the brand may suffer in expanding their business activities in new market place such as commercial risk, cross-cultural risk, currency risk and country risk (Brush, 2015). The risks for the organisation Global Furniture can be described further:
3. Commercial risk:
In such an era of globalisation, the organisations face commercial risk in expanding their business activities in a new market place. Commercial risk may arise due to inefficient partners of expanding the business and operational problems. If the partners of doing business in a new international market are not efficient, it will be difficult for the company to conduct their operations efficiently by understanding the internal and external business environment in the country (Verbeke, 2013). Time to entry and gaining market information are important for the small size firms such as Global Furniture Ltd so that it can internationalize the brand successfully.