Delivering quality service and meeting expectations to survive in the mesh of large and small industries within the world financial market is a huge task and requires well thought out strategies in conjunction with the tools and resources to follow these strategies. To get itself identified and become a forerunner in the international markets is a massive task. There is an enormous amount of competition prevailing in this sector.
Let us first understand the pillars for setting up a business and managing its scale for success.
- Any business intervention requires two modes of transactions- buying labour and capital and selling raw materials or finished goods or services.
- When you try to identify the resources that can help realize your labour and capital demands and thus you’re drawn towards finding out the plausible destinations most suited for your business; also the market that can offer you the capital you may require. It helps you determine the country you can find your niche.
- Another important aspect you cannot overlook is the country’s social and political climate. You may try setting up a business in your home country or other developing countries; it depends on how comfortable you are with setting up a business there provided all the factors are aligned properly.
It all comes down to the feasibility of the five contexts structure essential for operating a business efficiently. Let us discuss the five contexts structure:
- Social and political milieu: The political system of a country has its affect on the productivity of its goods and services, labour and the capital market. The political societies around the world displays a wide spectrum e.g., socialism, communism, fascism, conservatism, liberalism etc. China is an essential market and has its impact on the world market. As per law, China (socialist society) doesn’t allow its labourers to form unions and thus no fight for wages’ increase. At the social viewpoint any nation would be divided into different segments i.e. division based on linguistics, region, religion etc. These parameters also impact the competitive spirit of foreign investors. A particular company/ business will find its own field of operation depending upon predominant characteristics it displays attracting the majority of crowd in that region. If you think that you do not exhibit all the characteristics to succeed in your business stint in any region, you can always join hands with another company which already has a stronghold in that region.
- Openness: There are countries which foresee a good future in building relationship with multinational companies and entertain foreign direct investment from such companies. Sometimes the term “open” can be fallacious. As there are countries which appear to be open in welcoming foreign investment however they may actually take a rigid stand, e.g. China. On the other hand, there are other nations, e.g. India, which is called a closed economy, but has always been receptive towards the ideas on foreign investment.
- Product markets: Delivering your products to the target consumers is a task. The target consumers belong to the middle class category and delivering products to this consumer section requires efficacy and information from reliable sources to outperform their expectations.labour. Many big firms face the absence of efficient managerial staff to coordinate with the training staff. The number of business schools, training colleges etc. that has burgeoned since the past few years may have tried to push skills into the working class, but the managerial seats are not getting occupied to the extent, the firms would expect.
- Capital markets: The developing countries lack in producing efficient results within the capital and financial markets. The developed nations operate with the help of intermediaries like credit rating agencies, merchant bankers etc. which is one area the developing nations are not good at. Due to this lack of sophistication, transnational companies find it difficult trusting their brother companies in these nations following the local laws.