An Austrian company's tale of groth, globalizition and decline Essay

An Austrian company's tale of groth, globalizition and decline - Essay Example 3). Auer went into matured markets, including Egypt, Germany, Italy, and the United States. Hungary might be considered a more of a developing, or emerging, market, which is in line with where the world market is going, in that â€Å"most of the world’s growth is expected to occur in today’s emerging markets† (Cavusgil, 2002, p. 1). The factors in choosing these markets include competition, service costs, market characteristics and uncertainty (Davidson, 1982, p. 85). Based upon what you know about Auer Waffeln’s international expansion into a variety of foreign markets, can you identify distinct stages or phases in the entry process? What are the decisions that must be made at each stage? According to Johanson & Wiedersheim-Paul (1975), there are different stages for a firm when they decide to internationalize, and these stages represent successively higher degrees of internationalization commitment (Johanson & Vahlne, 1977, p. 23). When firms go internat ional, each additional market commitment will happen in incremental steps (Johanson & Vahlne, 1990, p. 211). The firms go through these stages, from a low degree of international involvement in Stage 1 to a high degree of international involvement in Stage 4 (Phing & Au, 2001, p. 163). The first stage is where there are no export activities. The second stage is that there is exportation via agents or independent representatives. The third stage is where an overseas sales subsidiary is established. The fourth stage is overseas manufacturing/production units (Johanson & Wiedersheim-Paul, 1975). With his entry into the Middle East, Waffeln conducted direct exportation of his products. This was the first stage of his entry into the market, and one of the biggest decisions that needed to be made when conducting the export business is how to circumvent, so to speak, the unique cultural challenges that exporting directly to the Middle East presents. Cultural challenges is one of the major barriers that internalizing firms face, and it is necessary to understand the cultural differences between the firm and the clientele (Copeland & Griggs, 1985, p. 52). Cultural â€Å"shapes business practices and processes in widely varying ways† (Caslione & Thomas, 2002, p. 24). Negotiating these cultural differences is considered to be one of the most important skills for the international manager (Brooke, 1986, p. 225). Cultural competency is one of the most important factors in gaining a competitive edge (Elashmawi, 2001, p. xvi). How managers interpret and respond to strategic issues is dependent upon the surrounding culture (Becker, 2000, p. 90). Culture can be spread across six different cultural dimensions – how does the society look at the nature of people; how does society look at the relationship between a person and nature; how does society look at the relationship between people; what is the primary mode of activity in society (accepting status quo or chan ging things to make them better); what is the conception of space in a given society (are meetings held in private or public); and what is the society’