There's an unfortunate stigma for business in the Middle East and North Africa as being unstable and high risk. That clouds the view of many business leaders, thus ensuring that they miss out on great opportunities in emerging markets in the region. Now is the time to reconsider investment there.
In the coming years, the Middle East and North Africa (MENA) region may become the most important developing economy for global opportunities.
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Conventional exporting strategies tend to rely mostly on global and national markets, however as globalization continues to change the international business arena and markets, larger cities have become an important actor. These “Global Cities” may be the ticket for your product or corporation’s first export initiative. As corporations have adapted and changed with globalization, so now global strategy evolves from traditional market analysis or strategies to include large hubs for international trade or potential clients. The US government creatively identifies initiatives to promote economic development through export promotion and assistance, to highlight one relevant to the topic, the Global Cities Initiative is worth taking a look at. This Exchange includes 28 US metropolitan areas engaged in a two phase planning process aimed at creating integrated export and foreign direct investment plans (Brookings, 2017). Utilizing initiatives like these where local metro government and the federal government may assist, is one way to add a competitive edge to your global strategy. GSCS will assist in identifying opportunities available to your particular firm or product.
This restructuring of the role of large metropolitan areas will give small business distinct advantages going forward. With the initiatives to bring in Foreign Direct Investment (FDI), and increase exports, small business may be able to capitalize on global as well as local partnerships for funding to establish export opportunities and increase network capabilities. Likewise, the economies of nation states will be slightly altered, granting some importance to local metropolitan areas which can narrow down the search for networking opportunities from then national to the city level. With this type of specialized market strategy, businesses can hone in on the exact contacts, markets, and opportunities that will boost their export revenue and give them competitive advantage based on specialization macroeconomic principles. This will essentially create more efficient markets in the sense that highly specialized products or services can target their specific markets at metropolitan level.
For further help or assistance with these concepts and information on how to take your corporation to the next level, contact GSCS and let us do the heavy lifting.
Also check out our Go Global Cruise where concepts like these will be expanded on, and opportunities for more one on one sessions made available to tailor your strategy for your product and service to have the highest impact globally. For only $25 you can reserve your seat today.
Brookings. (2017). Global Cities Initiative: The Exchange. Retrieved from www.brookings.edu: https://www.brookings.edu/global-cities-initiative-the-exchange/
As social enterprise continues to develop as a more normal frame of reference for business activities, it becomes very evident that the social impact can be accomplished on a global scale with high return on investment. As corporations are sprouting up to assist farmers in the “fair” trade industry or when firms include donations, or even investments (i.e. micro-finance) to entrepreneurial activities, today’s corporation has unprecedented opportunities to make an impact on developing economies. Even when major corporations are solely focused on profits, they can have a major impact on global development. The benefits of Foreign Direct Investment for the host nation, can be substantial. When foreign corporations invest, not only do they provide capital which can contribute to a nation’s capital formation, they also provide technology transfers, knowledge and skill transfers, and employment to the local economy. Not to mention there are many green technologies that are emerging and being used to generate great profits while narrowing the global carbon footprint. These items can not only bring large sums of revenue back to the Multinational firm, but likewise can potentially provide great benefit to the host nation. Of course, if the Multinational firm is only extracting capital and not keeping substantial amounts of its investments and capital in that nation and currency, then there are potentially negative consequences. Therefore, IF the firm desires to have a social impact they will need to incorporate some sort of Corporate Social Responsibility, or at least maintain a working knowledge of the impact their frim is having.
Global Strategy Consulting Services (GSCS) is committed to social enterprise and having a positive impact on developing nations. As a result, GSCS has partnered with the International School of Djibouti (ISD) to provide resources as available for the development of this new international school. The Djiboutian economy is heavily dependent on its services industry and education and development of human capital is the key to unlock the potential growth for its economy. As Djibouti is a French colony, it has not established a primary education system in the English language which hinders its ability to grow and work in the international trade language. The lack of resources and nearly 60% unemployment rate cripples the ability to grow at any substantial rate. Therefore, if education is able to be provided in English and people are able to engage in the global market, thereby attracting foreign investment, sending their children to western universities, and conducting business in the trade language, then Djibouti’s economy may take a turn for the better.
GSCS will donate 10% of profits to the ISD to assist in the development of the school project. Likewise GSCS would like to invite you to also make a donation to assist in the development of this amazing project.
Donations can be made through the partnership of a US non-profit, Resource Exchange International (REI), that is assisting the ISD in its development. The REI website has a drop down menu under specific projects that designate the International School of Djibouti- Djibouti. If you click on the link below the ISD will be located on the left hand side of the page in the drop down menu.
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Also, check out our “Go Global” Growth cruise! This global strategy education event hosted on the Norwegian Sky cruise ship will donate 10% to the ISD.
Expand your Global Reach!
As the world continues to become more globalized, the opportunities for small business owners are extraordinary. Exporting for the small to medium enterprise (SME) is not only the trend and undisputed reality of globalization, but has become necessary for ensuring survival and success. Although other options exist for reaching foreign markets such as investing abroad and manufacturing while hopping over tariffs, exporting is by far the most attainable for the SME. Despite the resources necessary for export in terms of financial, managerial, and organizational, exporting is accessible both to the large firm and ever increasingly to the small alike (Majocchi, Bacchiocchi, & Mayrhofer, 2005). Although it is disputed whether the size of the firm will determine success for export, one thing is virtually undisputed that experience is a crucial variable influencing a firm’s ability to export. This is where GSCS can assist to get behind the power curve while training internal expertise. Research demonstrates that a positive relationship exists between export intensity and firm size by number of employees meaning the larger the size of the firm the more resources it has, it can (obviously) export with greater intensity. However, when comparing firm size by volume of sales, the relationship was negative. The numbers also suggest that firm age, meaning experience, is a major player (Majocchi, Bacchiocchi, & Mayrhofer, 2005). With these realities, the small firm should not shy away from exporting, but instead should realize the implications of acquiring the necessary resources. This research as well as the sheer number of small businesses that are already entering global markets compared to large firms indicates that it can be done and even done more often for the small firm and that it is not entirely impossible when compared to large firms.
According to the Small Business Administration
When small businesses look to export, they can increase sales and profit, reduce dependency on domestic markets, and stabilize seasonal fluctuations. After all:
Given the firm data of the benefits of exporting, small businesses should look to begin and start planning at an early stage.
Global Strategy Consulting Services is glad to assist with the initial steps of exporting, our FREE global scan will give your company a clear idea of 15-25 markets that your company could begin looking at. We use trade statistics, export data, and your product information to give you a printout of exports entering other markets with the same or similar products as yours for the last 5 years with a percentage of increase or decrease with the last two years. (Contact us for your FREE global scan!)
Our market analysis will go much deeper on specific countries and with a flat rate of $1000.00 this becomes a very cheap way to gain a lot of knowledge about your top market choices. We will also give you a free 1 hour consultation to assist in the steps necessary prior to the market analysis.
Our “Go Global” Cruise will give you powerful insights on exactly how to start your internationalization initiative with decisive action steps.
What are you waiting for, contact us and let’s get started today!
Delehanty, P. (2015, December 1). Small Business Key Players in International Trade. Retrieved from www.sba.gov: https://www.sba.gov/sites/default/files/advocacy/Issue-Brief-11-Small-Biz-Key-Players-International-Trade.pdf
Majocchi, A., Bacchiocchi, E., & Mayrhofer, U. (2005). Firm Size, Business Experience and Export Intensity in SMEs: A Logitudinal Approach to Complex Relationships. International Business Review, 719-738.
SBA. (n.d.). Explore Exporting. Retrieved Jan 12, 2017, from www.sba.gov: https://www.sba.gov/managing-business/exporting/explore-exporting
Need a New Years Resolution? Take YOUR Company to the Next Level in 2017!
As managers plan for a new year, they inevitably look for new markets and growth opportunities. Don't let another year go by with missed opportunities! When small and medium enterprises begin export initiatives they unlock access to new revenue streams and diversify their risk in their own domestic market, all while continuing to grow their market share on both fronts. Small businesses account for the bulk of exporters in the U.S. and with many local state and government initiatives to stimulate exports, GREAT opportunities continue to be available to the small business owner.
As we approach 2017 one macro-economic reality will be glairing to the U.S. business owner: stagnation. The U.S. GDP will only moderately continue to grow with its 2-3% growth in the coming year. Likewise, many other developed nations are facing stagnation to moderate growth in the coming future. Great Britain leaving the E.U. is a perfect example of how developed nations are looking for new policies to break the cycle. However, in the developing world growth is raging. India is assumed to grow between 7 - 8% while other developing nations such as Egypt are projected between 3 - 4% growth. As oil-dependent economies are shifting from oil based economic GDP growth to non-oil GDP growth only more opportunities are on the horizon. Saudi Arabia alone is projecting to grow in non-oil GDP by 2-2.5%.
Managers will do best to have an open mind, maintain a wide view of markets both global and domestic, and keep all options on the table. Fear of global markets and taking on risk (which can be managed or mitigated) will only hurt the small to medium enterprise in 2017. The domestic U.S. market is a great place to keep the status quo with its moderate growth and natural unemployment, the economy should be fairly healthy and a stable place to maintain revenues. However, if a company is ready to expand to the next level and take on global markets, it will only increase opportunities and make 2017 the best year ever.
Make 2017 your business's year to go global! GSCS is here to help, check out our Go Global Cruise to jumpstart your global initiatives!
Kirk Galster, M.S, M.B.A. is an international business services professional. With his extensive experience and background in International Studies, Law, International Business, and Economics he is a great asset to any international management team.