International entrepreneurship and innovation Essay

International entrepreneurship and innovation - Essay Example It makes life comfortable for a lot of people but the strength of Cochlear Property is that it is a unique technology which cannot be easily replicated due to the fact that the company has a patent right to the technology. The second factor responsible for the success of Cochlear Property is the Australian governments policy of encouraging pharmaceutical and medical research entities. This provided the much needed capital which was used to get the company to move to a high pedestal in its operations and attain a sustained level of productivity. The fourth element of the success of Cochlear Property is the fact that the company has been able to penetrate specific markets. This is because it is a specialised product that is suitable for deaf people in different parts of the world. The ability to get the products to consumers makes the company solvent and keeps it going. Risk-reward trade off refers to balancing entrepreneurial risk for rewards in the form of profits or revenues (Mankiw, 2012). Cochlear has a technology that is unique, distinct and very much in demand amongst a particular niche of the markets around the world. However, the risks relate to the challenge of financing. Hence, financing risk was the main and central risk that faced Cochlear Property. The main risks involve the internationalisation of the company through the acquisition of funds. The low capital and the the need for internationalisation came with the challenge of raising funds and this had the inherent risk of destabilising the company and its capital structures as well as its going concern status. Acquiring funds from sources that proved to be extremely expensive meant the company would pay too much money to finance their debts. This will mean too much interest to be paid at different points in time and this could cut down profitability and lead to the collapse of the company. On the other hand, equity financing meant the risk of opening the door

International Business Research Paper Example | Topics and Well Written Essays - 1000 words - 2

International Business - Research Paper Example As per Avon's global strategy it is imperative to sell directly to individual consumers and the product's brand names can be changed in accordance with the cultural environment of different countries but the global brand name will be their primary identification. Avon allows every branch or subsidiary to set its own competitive prices in response to their local market conditions and the inter-country transfer of learning, resources and practices. 1. Your reading assignment for this unit describes different marketing orientations. Discuss the applicability of each to Avon’s international operations. Production, sales, customer, strategic marketing, and social marketing are the most common marketing orientations. Avon uses a mix of customer, strategic marketing and social marketing orientations in its global marketing strategy. Avon is basically a customer oriented company which allows product modifications as per country-specific or customer-specific requirements. As a part of its social marketing campaign to support women, Avon started its social awareness programs like fighting against domestic violence and breast cancer. Avon also introduced insect-repellent skin creams in South American countries. The company also took an innovative step in its distribution method in China to appropriately implement its strategic marketing orientation. 2. Why is Avon so much more dependent on its foreign operations than on its home (U.S.) operations? The strategy of going global was based on a primary fact that there will be more chances of profitability if you could access more customers. The basic reason of exporting is to increase the profitability of business either to explore new markets or to get rid of local heavy competition. Avon had both. The selling model developed by Avon that is in accordance with the nature of their products is not much suitable for the women in United States. As a large number of women are engaged in full time jobs, it will be difficult to access them through direct selling model. 3. Discuss socioeconomic and demographic changes that could affect Avon. Avon has a specific sales model that is line with its business model and the nature of products it is selling. However in order to make the business profitable, it is necessary to understand the socioeconomic and demographic trends of the country. In United States, the availability of women is a major issue. Avon needs part time sales force to implement its sales model effectively with a low labor cost. The unavailability of women affects the volume of sales because there will be fewer candidates willing to take the part time sales representative job and also there will be fewer women to meet those representatives to buy the products. 4. How might a global recession, such as the one that began in 2008, impact Avon’s operations? Going global is a risky decision as the economic recession can affect the profitability of a global company more than a local company . Some portion of operating cost of global operations is fixed in nature and can not be avoided like legal formalities of each country. Global recession also affects the purchasing power of customers and they are now more focused on the usability of the products they purchased. In this situation, companies are focusing on modifying their business strategies to deliver products with more functions with an economic price in order to satisfy the