- Several more esoteric motivations, beyond the traditional ones of sales and profits, also can motivate an entrepreneur to go global. One of the more predominant motivations is the desire to establish and exploit a global presence. When an entrepreneur goes global, many company operations can be internationalized and leveraged. For example, when going global, an entrepreneur will establish a global distribution system and an integrated manufacturing capability. Apple Computer has done this well, establishing solid profit margins throughout the established supply chain. Establishing these gives the entrepreneurial company a competitive advantage as they not only facilitate the firm’s successful production and distribution of present products, but also help keep out competitive products. By going global, an entrepreneur can offer a variety of different products at better price points.
- STRATEGIC EFFECTS OF GOING GLOBAL
- While going global presents a wide variety of new environments and new ways of doing business, it is also accompanied by an entirely new set of wide-ranging problems. Carrying out business internationally involves a variety of new documents, such as commercial invoices, bills of lading, inspection certificates, and shippers’ export declarations, as well as the need to comply with an entirely new set of domestic and international regulations.
- One major effect of going global centers around the concept of proximity to the firm’s customers and ports. Physical and psychological closeness to the international market affects the way business occurs. Geographic closeness to the foreign market may not necessarily provide a perceived closeness to the foreign customer. Sometimes cultural variables, language, and legal factors can make a foreign market that is geographically close seem psychologically distant. For example, some U.S. entrepreneurs perceive Canada, Ireland, and the U.K. as being much closer psychologically, due to similarities in culture and language, than Mexico, which may be closer in distance.
- Three issues are involved in this psychological distance. First, the distance envisioned by the entrepreneur may be based more on perception than reality. Some Canadian and even Australian entrepreneurs focus too much on the similarities they share with the U.S. market, losing sight of the vast differences, which exist in every international market to varying extents, need to be taken into account to avoid costly mistakes. Second, closer psychological proximity does make it easier for an entrepreneurial firm to enter a