Context of international business簡述國際商業環境現狀

如今國際業務已經越來越關注經濟增長和創造價值。面對激烈的全球性競爭,企業都傾向于充分利用全球資源。令人驚訝的是,這種策略的確起作用了。因此,在今天,很多公司都很重視全球化的過程,努力擴大國際業務。這已成為一個很重要的營銷策略(賈斯汀,2008)。例如,福特汽車(Ford motor)正嘗試在世界不同地方經營著不同的業務,以試圖提高自己的生產效率。

 

 

1901年,亨利·福特公司成立,后來成為了福特汽車公司。通過幾十年的努力,福特汽車已經通過市場試驗期,繼而發展成一個大型且領先的汽車公司(哈德,2011)。然而,由于美國高昂的老齡化勞動力醫療保健成本,市場份額也存在不同程度的下降，福特汽車于2005年的銷售額度也有所下降。為了改變這種狀況,實現可持續發展,福特汽車采取了很多的措施,包括擴大自身的經營規模目前越來越多的企業進入外國直接投資模式(Les和吉姆和詹姆斯,2010)。

 

Nowadays, international business has been paying more and more attention on the growth and creation of values. Where the global competition is fierce, enterprises tend to make full of the global resources, and surprisingly, it works. Therefore, a lot of companies today have concentrated on the process of globalization and are managing to expand their business internationally, which has made up an important part of their marketing strategies (Justin, 2008). For example, the Ford motor is trying to establish its different businesses in different places of the world, as long as it helps improve efficiency. 

 

 

In 1901, the Henry Ford Company was founded, which became the Ford Motor Company later. Through decades, the Ford Motor has gone through thin and thick and developed into one of the biggest and leading automobile companies (Gerhard, 2011). However, due to the high US health care costs for an aging workforce, declining market share and an over dependence on reducing SUV sales, the Ford Motor has gone through a decline in its sales and its status was also downgraded a lot in 2005. In order to change this situation and achieve sustainable development, the Ford Motor has taken a lot of measures, including expanding more and more of its businesses into foreign countries by mode of foreign direct investment (Les & Jim & James, 2010). 

 

 

FDI has been defined as a cross-border movement of funds, technology, etc for companies to get or enlarge their control over the assets that can create values or make profits for them. In fact, foreign direct investment has become an important way for transferring international capital from country to country. What’s more, through the past decades, foreign direct investment has grown quickly. 

 

As for the main drivers for Ford Motor’s FDI, there are a lot of different opinions. Generally speaking, there are two main drivers for Ford Motor’s direct investment to foreign countries—the revenue-related ones and the cost-related ones (Marco, 2006). 

 

By directly investing to foreign countries, the Ford Motor is managing to enter into markets where there promises better benefits for it (Jonathan & Colin, 2006). What’s more, the Ford Motor is able to enlarge the demands for its products in the country where it invests. Another driver is related to the restrictions for trade and international diversification. Besides, foreign direct investment is also an effective way for entering into a foreign market (Ehud & Amit, 2011). When the Ford Motor has already entered the market, the delivery times of its products will be reduced. In addition to these, there would be fewer tariffs for the Ford Motor in terms of trade with the host country. However, when speaking of foreign direct investment, to build new factories in the host countries is one mode, which means that the fixed costs of assets will be increased. Generally speaking, there would be a trade-off between the two. 

 

There are a lot of factors that are driving the Ford Motor to invest abroad. And these factors are mostly cost-related. For example, through foreign direct investment, the Ford Motor is able to realize the economies of scale. What’s more, by investing in other countries, the Ford Motor is allowed the access to many benefits that are only possible by mode of foreign direct investment (Thomas, 2006). For example, the Ford Motor can make use of the local workers to minimize its labor costs. What’s more, it can also learn from the advanced technologies in the host country. More importantly, the raw materials in the host country can also be used by the Ford Motor to support its production in that it will save the costs of transporting the raw materials from its mother country. 

 

The foreign direct investment has posed a lot of market opportunities and production and resource opportunities as well as threats on the companies. During the past decades, trade barriers have reduced a lot while the opportunities of productivity and resource have increased due to some certain advantages in the countries. What’s more, researches have shown that the globalization of business is positively related to the profitability of the companies.

Since each country has its own competitive advantages over others, it is generally accepted that an analysis and understanding of the local environment is necessary to a company’s development strategy (Hwa, 2008). These environmental factors are assessed in the market of the host country in order that the companies can adopt the right mode and build the right structure for their international businesses. The below table shows a variety of environmental factors that influence the Ford Motor when it is accessing a foreign market. 

 

   

Take one political factor as an example. When the Ford Motor is accessing Chinese market, one of its major concerns was the stability of Chinese government stabilities. Generally speaking, Chinese government is stable and has a free market economy. Both the political and economic situations ensure that Chinese economy enjoys a stable increase and is not disturbed by the degree of inflation on the whole. All these should promise the Ford Motor an increase for its profits. In china, as the politics are stable and economy is keeping developing, people’s wealth is keeping rising, which means that their buying will grow and the market for car consuming will expand (Kenneth, 2008). 

 

 

Legal factors include employment laws and bilateral contracts between countries. By foreign direct investment, Ford Motor is establishing direct contact with its foreign clients, especially with those whose country has already established bilateral contracts with it. With bilateral contracts, the host countries are giving special favors to the Ford Motor, which include easy market entry and fewer tariffs. What’s more, with the development of multinational business, the Ford Motor will become stronger and stronger in foreign direct investment and its profits will grow more and more. 

 

 

By emerging markets, people refer to mainly those under-developed and developing countries. Besides, it also includes those non-western economies. The emerging markets are also known as newly industrialized countries that are going through rapid industrialization and are enjoying high annual growth rates. 

 

The emerging markets are keeping offering huge opportunities for multinational companies (Francis, 2007). Being a company in the automotive industry, the Ford Motor has been faced with a lot of advantages in market entry and products sales in the emerging markets rather than in developed ones.  

 

Generally speaking, the emerging economies are offering more support to the Ford Motor as it is equipped with advanced technologies and management styles (Lausberg, 2010). On the one hand, the Ford Motor’s makes a technology transfer to the emerging markets, which will help them grow quickly and get rid of the poor situations. On the other hand, by direct investment, the Ford Motor usually builds up a lot of factories in the local area, which will increase the rate of employment and tax in the country. 

 

Most of the emerging markets are eager for fast economic growth, rapid industrialization and high rate of employment. Therefore, they hope to attract as many foreign investments as possible (John, 2012). In order to realize this goal, most of them have offered easy market entry access to multinational companies. In addition to this, the emerging markets seldom set up too many trade barriers to the multinational companies. 

 

As emerging markets are not very powerful and advanced in automobile industries, the entry of the Ford Motor has well compensated for it. And the domestic needs for automotives will generally go to the Ford Motor, which promises a big market share for it.  

 

While emerging markets like China is politically stable, some like Saudi Arabia are not. Compared with the economic aspect, challenges from the political respective are more easily influenced by a countries making of a law, changing of national leaders and even population growth and other activities such as demonstrations. 

Due to this reason, the Ford Motor has conducted a lot of political risks analysis in the emerging markets. What’s more, it also consults many professionals who concentrate on the analysis on political risks in these markets. 

 

Researches have shown that emerging markets are more easily affected by the world economy. Therefore, this has constituted a big challenge for the Ford Motor. Whenever there is volatility in the world economy, the emerging markets will be affected (Isabel, 2005). The results may include a change in its interest rates, the rate of tariffs and may be also the change of laws relating to the economic side. All these are challenges to the Ford Motor as regards the emerging markets. Luckily, the Ford Motor is now paying a lot of attention on the analysis of market environments in an attempt to avoid economic risks.  

 

As its definition shows, most of the emerging markets are the under-developed and developing countries, which means that they are not very rich, and that their national wealth is not too much. Therefore, their purchase power for the automobile is relatively low. This is a great challenge for the Ford Motor. 

 

The selection of the appropriate market entry modes is of great importance to the majority of multinational companies. For those companies of small and medium-size, the thing of importance is to identify their target market, while for well established ones, it is important to decide which market to enter and how. 

 

 

The Ford Motor has adopted the mode of contract manufacture as one of its international market entry modes. In fact, contract manufacture is a local manufacture which produces and sells products for its parent factory. The Ford Motor has build up a lot of contract manufacture around the world. From the income and profits perspectives, this is an especially successful mode for the Ford Motor in that it saves a lot for the labor costs and transportation costs. What’s more, by arranging contract manufactures, the Ford Motor can better focus on the purchasing, producing and selling activities because its investment has already been fixed. 

 

It is a good idea for the Ford Motor to set up companies especially for assembling in the host countries. And actually, the Ford Motor has already done so. By doing in this way, the Ford Motor is saving a lot for the tariffs because normally, the tariffs on components are much lower than that on finished goods (Dusko, 2005). Besides, as cars are usually large products, there is another advantage for setting up assembly companies that is to save the costs for large products as well as to reduce the transportation expenses. There are also other advantages. For example, to set up an assembly company is one way of realize the specification of the work, which can help the Ford Motor to gain an economy of scale. 

 

 

Early in the 1980s, the American automotive industry has gone through a depression. Ever since then, the Ford Motor has made a lot of trials in attempts to reduce the costs. One of them was the move to put accounts payable together with other departments in the company. Leading by this way, the Ford Motor has adopted the Mazda. And luckily, the Ford managers finally realized their goal.

 

 

The Ford Motor has always been taking a leading role in marketing, thus providing accurate and valuable analysis for many of the countries in which it invests. Therefore, the past decades have witnessed the fast growth of the Ford Motor’s businesses in different countries (Manrai & Manrai, 2001). As for marketing, the Ford Motor has adopted a lot of different methods, such as cross-cultural research, foreign research and multi-country research. Anyway, these marketing methods have helped the Ford Motor to identify the local market chances and grasp the market trends. More importantly, marketing helps to determine the strategies for development.

 

 

For the automotive industry, one of the biggest challenges now is relating to the topic of how to move on from a single engineering manufactures to a company with multifunction (Robert, 2010). As a matter of fact, the Ford Motor has many actions for a better future of itself, for instance, the customer focus and current development of products and the improvement of after sales services. However, management innovation has now appeared as a brand new concept for the multinational company. 

 

 

A lot of evidences have shown that management innovation could enable a multinational company to enjoy some competitive advantages. Actually, the GM Company has already taken the management innovation which is known as the G-form (Ashoka, 2006).  Besides, Toyota has also adopted the method of management innovation as lean production. Though researches have shown that these management innovations are closely associated with some of the cultural and institutional factors, the Ford Motor is indeed one of the multinational companies. By management innovation, the Ford Motor can at least narrow the gap between itself and other competitors in the automotive industry. 

 

 

In addition to these, the Ford Motor itself is actually qualified for management innovations (Andrew & Samantha, 2006). On the one hand, the Ford Motor is operating its cross-border businesses in an international context which will inspire it to create a lot of management innovations. On the other hand, the complex domestic and foreign market situations also require the Ford Motor to make new management innovations so as to keep itself up to date, both in information and technologies. Actually, only by doing in this way can the Ford Motor promises itself a better company in the future. 

 

Being one of the multinational companies in the automotive industry, the Ford Motor has gone through many years of development, during which it has both ups and downs. Nowadays, as globalization is progressing, a lot of companies are going international and competition has become more and more fierce (Debra & Colin, 2010). The Ford Motor has expanded its business into both developed countries and the emerging markets. On the whole, it has gained huge success. However, it also has some space to get itself improved, among which management innovation appears as a good idea.

 

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