Year: 2020

Globalization and e-commerce have all contributed to a recent influx in international trade. What used to only be attainable by large-scale businesses is now accessible to small companies and those in the business of resale. Products and services are often performed internationally at greatly reduced costs, making international expansion and production outsourcing a suitable option for businesses. But many people still don’t understand the benefits of global business in their industry, and even for those who do, they struggle to find where to start.

Export marketing is the practice by which a company sells products or services to a foreign country. Products are produced or distributed from the company’s home country to buyers in international locations. But there is a difference between products that are available to foreign countries and products that are specifically marketed to foreign customers. This where the importance of an export marketing plan comes in.

Businesses today are often doubling or tripling products by expanding to product sales on an international level. But you can’t assume that foreign markets will be as interested in your product as local customers. Cultural differences, shipping costs and transit time, politics, and international trade policies all contribute to a marketing communication barrier between suppliers and foreign buyers.

So why do you need export marketing? Simply put: Google translate is not enough. You need to know the buying behaviors, interests, and needs of your foreign customers. All of this can be addressed in an export marketing plan. An export marketing plan is created to address a specific strategy that can be utilized to make product both available and enticing to international buyers.

The only difference between an export marketing plan and a regular marketing plan is the location in interest. The same type of market research performed for locating an optimal domestic market must be completed on an international scale. Here is how an export marketing plan should be built.

1. Foreign Country Selection

The first and most obvious step in building an export marketing plan is selection of a country. While this is the “simplest” step, it is also the most crucial. Start by focusing on continents. Although every country is different, many cultural differences and buying behaviors can be attributed to continents as a whole. After selecting a continent, do some research on the top 3 locations of your preference. This should give you more insight into what country you should sell to.

2. Natural Conditions Research (Optional)

The relevance of this factor will depend greatly on the product you are selling. Information such as the weather, land size, environment, ease of mobility (mountains, roads, etc.), and various other factors will all contribute to the success of your international expansion. For example, selling perishable goods to mountainous regions where transport is difficult may mean your products will expire before they are sold.

3. Socioeconomic Research

This should go without saying, but your products must fit the socioeconomic demographics of the region you plan on selling to. Fashion clothing may be too expensive for certain countries in Africa or Asia. The quality of materials you build your product with may have to change in an international market in order to accommodate the benchmark prices and quality of goods in the foreign location.

Define first what class of consumers you plan on selling to. Lower-class, middle-class, upper-class, and businesses will all have different price point and quality expectations, and these may not reflect those of U.S. standards.

4. Competitor Landscape

This is the one place in which competition is good. International business and trade has existed for hundreds of years – any profitable international business endeavor that has a promising return has already been done. Thus, you can use the density of competition in a foreign country to disseminate whether or not it is a profitable industry to be in.

Make sure that your competition density research comprises research on local companies in the foreign country as well as international businesses. Just because there is a market for, say, tires in China doesn’t mean that there is a profitable market for foreign tire manufacturers to sell there. See if any companies in your home country are selling the same type of product or service in the country of question.

Global trade and international expansion offer can offer great returns to businesses. However, it can also mean steep losses and costs. Keep in mind: there is a major difference between making your products available to international buyers and marketing to specific international markets. Addressing the latter is your only chance at success in international expansion. Export marketing can help to do this.

Development an Export Marketing Plan

Every successful marketing plan begins with thorough market research. Your first market research project is usually the toughest because it’s all unfamiliar terrain. But once you have collected the data you need to predict how a specific type of product will sell in a specific geographic location, you can use the information over and over again as a guideline for exports of similar products. As you build your personal information database on global markets and learn to keep yourself up-to-date on developments in international trade, it will become less of a chore to determine where to take your product.

You will find that market research is a powerful tool for exploring and taking control of your global territory.

Here is a good way to get started and organized: Keep the research summary to one page, and break it into four manageable parts. The purpose of this exercise is to establish a broad scope of your research market analysis but not so broad that you overwhelm yourself. Try to begin with the end in mind: Where do you want to go and how will you know that you have arrived?

1. Explore the Top Three Overseas Markets That Appear to Have the Best Potential for Your Product or Service Offering

You can conduct market research online, meet in person with an international trade, or you can test your product or service by exhibiting at a local (domestic) trade show. Trade shows provide potential customers from all over the world without you having to analyze a thing. For example, if you sell hardware tools and exhibit at a hardware show, you might get a lot of interest from attendees from a particular foreign market, such as Australia. Then you know there must be a market there, for why else would these attendees be asking for information? From there, you can address those inquiries, learn as you grow, and conduct further research.

2. Analyze the Market Factors and Conditions in Each of the Selected Countries

Delve into each country further by reviewing cultural attributes, geographical characteristics, political stability, demographic characteristics, market size, and growth rates. The goal here is to conduct a sound assessment of a foreign market.

What might the barriers be? What makes it a good market to enter? How will the local culture influence the sales of your product or service offering?

Such in-depth market research information is necessary for sound marketing decisions, and it must be done with each new market entry.

3. Determine the Pros and Cons of Conducting Business in Each Market

Look at potential language barriers, legal restrictions, logistical challenges, and payment problems that might get in the way of doing business in a particular market. Include all relevant variables in your assessment.

Analyze your strengths and weaknesses in a selected market. Will your product or servicing offering be in the low, middle or high-end pricing level? Is there a similar product or service offering currently available in the selected market? If so, who is making it? Where are they based? Can you compete? Why would you? How would you? The more pros you have for entering a new market, the better your chance of success. If you can draw on the perspective of a native (better yet, an actual prospective customer) of the country where you are keenly interested in doing business, then do so. Nothing beats an on-the-ground assessment.

4. Select One Market and Get Going

Now you are ready to interpret your findings in light of the stated objective: Where do you want to go and how will you know that you have arrived? At this juncture, you should have enough data and experience (e.g., the trade shows) to decide which market is best for you to begin. Hold the other two country options for future market entry, and don’t go there until after you have proven success with the first overseas market. If the first selected market doesn’t work right away, say after six months or a year, move on to the second market, and so on. Don’t muddy the waters. You don’t want to do too many things at once because you might end up not doing any one thing right.

5. Final Note

The most difficult aspect of developing an export plan is determining the demand for a product or service offering in a foreign country. It’s one thing to know a product can be sold in a market – after all, that’s why you selected a particular market. However, it is a different ballgame when it comes to forecasting how much you can sell and over what timeframe. Assume that demand for a product develops in direct proportion to economic development in each country. This might be a useful way to think about it, especially when data might be unknown.

The import trade is referred to goods and services purchased into one nation from another. The word “import” originates from the word “port” considering the fact that the products are frequently transported via ship to foreign countries. Similar to exports, imports are also the backbone of international trade. Here, if the expense of a country’s imports is more than the value of its exports than the country has a negative balance of trade (BOT), which is also known as a trade deficit.

Every country import goods and services that the domestic country cannot manufacture, maybe because the country cannot produce effectively or cheaply like another exporting country. Few countries sometimes also import commodities and raw materials which are not available on their premises. For instance, many nations import oil they cannot manufacture it locally or cannot provide sufficient to meet the demand.

Objectives of Import Trade

1. To Speed Up Industrialization

Developing countries import scarce raw materials, capital goods and advanced technology required for rapid industrial development.

2. To Meet Domestic Demand

The goods which are in demand but are not available in the country are imported.

3. To Overcome Natural Disasters

During drought, flood, earthquake and other natural calamities country import food grains and other essential commodities to prevent starvation.

4. To Improve Standard of Living

Imports enable consumers in the home country to enjoy a wide variety of products of high quality.

It helps in improving the standard of living of masses.

5. To Ensure National Defence

The importer must get the receipt of credit from his concerned bank and send it to the foreign supplier.

Important Steps Involved in a Typical Import Transaction

1. Trade Enquiry and Sending Quotations

• The domestic buyer who wishes to buy the goods from the other country sends an inquiry relating to price, desired quality, terms, and conditions for the export of goods.
• The exporter sends a reply to the inquiry in the form of ‘Quotation’.
• The quotation is also known as ‘Proforma Invoice’ which contains information about the selling price, quantity, quality, mode of delivery, etc.

2. Procurement of Import License

Goods can be imported only upon the license, the importer requires to obtain an import license.

3. Obtaining Foreign Exchange

• The overseas supplier asks payment in a foreign currency.
• Payment requires the exchange of Indian currency into foreign currency.
• In India, transaction related to foreign exchange are governed by Reserve Bank of India (RBI) under the Exchange Control Department.

4. Placing Order or Indent

After the receipt of the ‘Quotation’, if the prospective buyer finds the information suitable to him, he places the ‘Order/Indent’ for the import of goods.

5. Obtaining Letter of Credit

The importer must get the receipt of credit from his concerned bank and send it to the foreign supplier.

6. Arrangement of Finance

The importer makes the finance settlements in advance to remunerate to the exporter when the shipment arrives at the destination.

7. Receipt of Shipment Advice

• After storing the consignment on the ship, the foreign supplier sends the shipment advice to the importer.
• The shipment advice includes data about the shipment of products such as:
• Invoice number
• The landing or airways bill date and number
• Name of the ship with date
• Port or Destination of export
• Classification of goods and quantity
• Date of the sailing of the vessel.

8. Arrival of Goods

The overseas supplier dispatches the Goods as per the contract.

9. Customs Clearance and Release of Goods

• In India, all the imported goods have to have a clearance from customs after they pass the Indian borders.
• When the ship arrives at the port, the importer has to obtain a delivery order/endorsement for delivery on the back of the bill of lading from the concerned shipping company.

Import is a very important function of our economy. It is one of the most regulated sectors of our economy.

Import Procedure

1. The initial step engaged in importing a product is to accumulate information about the nations and firms which send out the item required by the exporter. It can be accumulated from trade directories, trade organizations, and associations. The exporter readies a quotation otherwise called Performa Invoice and sends it to the importer.
2. The Importer Consults the export-import (EXIM) Policy in power, all together to know whether the merchandise that he/she needs to import are subjected to import licensing or not.
3. In the situation of an import transaction, the provider resides in a foreign nation and subsequently requests the installment of foreign cash. This includes the trade of Indian Currency into foreign money. The Exchange Control Department of the Reserve Bank of India (RBI) manages foreign trade exchange in India. According to rules, each merchant needs to secure the sanction of foreign trade.
4. The importer puts in an import request or indents with the exporter for the supply of merchandise. The request contains information with respect to cost, quality, quantity, size and grade of goods instructions with respect to packaging, delivery shipping, a method of payment and so on.
5. At the point when the payment terms concur between the importer and the overseas provider, the importer gets the letter of credit from its banker and forwards it to the overseas provider.
6. The importer arranges for money in advance to pay the exporter on arrival of goods at the port this empowers the importer to avoid huge penalties on the imported goods lying uncleared at the port for the need of payment.
7. The overseas supplier after loading the merchandise on the ship dispatches the “Shipment Advice” to the importer. It gives information with respect to the shipment of goods like receipt number, bill of lading/airway bill, the name of the ship with date description of merchandise and amount and so forth.

Furthermore,

8. After dispatching the merchandise, the abroad exporter hands over the different documentation like an invoice, bill of lading, insurance certificate of origin to his banker for their forward transactions to the importer when he receives the bill of exchange drawn by the provider. The acknowledgment of a bill of exchange by the importer to get a confirmation of delivery is known as the retirement of import documents.
9. At the point when the sent merchandise comes in the importer’s nation, the individual accountable for the merchandise conveys the officer in control at the dock or the airport about it. The individual responsible for the ship or airway gives the report with respect to import.
10. Imported merchandise are subjected to customs which is an exceptionally extensive process and includes a considerable time to complete. The importer more often than not appoints a C&F operator for completing these customs.

Essentially, the merchant acquires a delivery order which is otherwise called an endorsement for delivery. This order allows the importer to take to take the delivery of merchandise subsequent to pay the cargo charges.

Importer likewise needs to pay dock dues for getting port trust dues receipts for which he submits two duplicates filled in the form is known as “application to import” to the Landing and “Delivering Dues Office”. Subsequent to paying dock dues the importer gets back one copy of the application as a receipt which is called as ‘port trust levy receipts’.

At long last, the importer fills in a frame known as ‘bill of entry’ for appraisal of customs import duty. An inspector inspects the merchandise and gives his report regarding the bill of entry. This bill is then introduced to the port administration which on getting the important charges, issues the discharge arrangements.

Documents Used in an Import Transaction

Common documents required for import customs clearance procedures and formalities in some of the importing countries.

1. Bill of Entry

Bill of entry is one of the major import document for import customs clearance. As explained previously, Bill of Entry is the legal document to be filed by CHA or Importer duly signed. Bill of Entry is one of the indicators of ‘total outward remittance of country’ regulated by Reserve Bank and Customs department. Bill of entry must be filed within thirty days of arrival of goods at a customs location.

Once after filing bill of entry along with necessary import customs clearance documents, assessment and examination of goods are carried out by concerned customs official. After completion of import customs formalities, a ‘pass out order’ is issued under such bill of entry. Once an importer or his authorized customs house agent obtains ‘pass out order’ from concerned customs official, the imported goods can be moved out of customs. After paying necessary import charges if any to carrier Documents required for import customs clearanceof goods and custodian of cargo, the goods can be taken out of customs area to importer’s place.

2. Bill of Lading / Airway bill

BL/AWB is one of the documents required for import customs clearance.

Bill of lading under sea shipment or Airway bill under air shipment is carrier’s document required to be submitted with customs for import customs clearance purpose. Bill of lading or Airway bill issued by carrier provides the details of cargo with terms of delivery. I have discussed in detail about Bill of Lading and Airway bill separately in this website. You can go through those articles to have a deep knowledge about documents required for import customs clearance.

3. Import License

As I have mentioned above, import license may be required as one of the documents for import customs clearance procedures and formalities under specific products. This license may be mandatory for importing specific goods as per guide lines provided by government. Import of such specific products may have been being regulated by government time to time. So government insist an import license as one of the documents required for import customs clearance to bring those materials from foreign countries.

4. Insurance certificate

Insurance certificate is one of the documents required for import customs clearance procedures. Insurance certificate is a supporting document against importer’s declaration on terms of delivery. Insurance certificate under import shipment helps customs authorities to verify, whether selling price includes insurance or not. This is required to find assessable value which determines import duty amount.

5. Purchase order/Letter of Credit

Purchase order is one of the documents required for import customs clearance. A purchase order reflects almost all terms and conditions of sale contract which enables the customs official to confirm on value assessment. If an import consignment is under letter of credit basis, the importer can submit a copy of Letter of Credit along with the documents for import clearance.

6. Technical write up, literature etc. for specific goods if any

Technical write up, literature of imported goods or any other similar documents may be required as one of the documents for import clearance under some specific goods. For example, if a machinery is imported, a technical write up or literature explaining it’s function can be attached along with importing documents. This document helps customs official to derive exact market value of such imported machinery in turn helps for value assessment.

7. Industrial License if any

An industrial license copy may be required under specific goods importing. If Importer claims any import benefit as per guidelines of government, such Industrial License can be produced to avail the benefit. In such case, Industrial license copy can be submitted with customs authorities as one of the import clearance documents.

8. RCMC (Registration cum Membership Certificate)

For the purpose of availing import duty exemption from government agencies under specific goods, production of RCMC with customs authorities is one of the requirements for import clearance. In such cases importer needs to submit Registration Cum Membership Certificate along with import customs clearance documents.

9. Test report if any

The customs officials may not be able to identify the quality of goods imported. In order to assess the value of such goods, customs official may draw sample of such imported goods and arranges to send for testing to government authorized laboratories. The concerned customs officer can complete appraisement of such goods only after obtaining such test report. So test report is one of the documents under import customs clearance and formalities under some of specific goods.

10. DEEC/DEPB /ECGC or any other documents for duty benefits

If importer avails any duty exemptions against imported goods under different schemes like DEEC/DEPB/ECGC etc., such license is produced along with other import clearance documents.

11. Central excise document if any

If importer avails any central excise benefit under imported goods, the documents pertaining to the same need to be produced along with other import customs clearance documents.

12. GATT/DGFT declaration

As per the guidelines of Government of India, every importer needs to file GATT declaration and DGFT declaration along with other import customs clearance documents with customs. GATT declaration has to be filed by Importer as per the terms of General Agreement on Tariff and Trade.

Read More: https://indiafreenotes.com/international-trade-procedures-and-documentation/

The Indian IT industry has grown very rapidly in the last few years. The IT services exports has grown from $1,100 mn in 1996-97 to $12,500 mn in 2003-04. Nasscom-McKinsey has projected IT services exports from India to be $57 bn in 2008. There are a whole lot of interesting issues resulting from this growth. One of them is the evolution of the multinationals and the Indian IT companies. What makes it interesting is the fact that both have undergone significant evolution over the years. While the MNCs are becoming more localized in the Indian market, the Indian companies are fast adopting a global outlook.

Multinationals companies are the ones that are headquartered somewhere else and have an operation in India. Some familiar names include IBM, HP, Accenture, EDS and CSC. On the other hand, some of the Indian companies include TCS, Infosys, Wipro, Satyam and HCL. Let us take a look at how the two are placed vis-Ã -vis each other with their respective strengths and weaknesses.

Till about 2001, the two used to live in different worlds. The Indian IT companies did some on site body shopping, small low-end projects and some project work, done remotely. On the other hand, the global MNCs, till 2001, had a good going. They had pretty much a monopoly on things like outsourcing, Intellectual Property in IT industry, consulting, etc. They did a lot of big projects and had long-term relationships with clients. There was limited price competition between them as each one had its own niche. So, for the big projects there was hardly any competition for them and the margins were also high.

But,

Today if one looks at where the two are, the situation has changed quite a bit. While the Indian companies are increasingly enhancing their global presence, the global MNCs are increasingly leveraging India in world sourcing.

If one looks at the headcount of the top 5 Indian IT companies-TCS, Wipro, Infosys, HCL and Satyam-it is somewhere around 40,000 for the first three tier one companies and immediately followed by tier two companies at about 20,000 employees. This compares very favourably with anybody in the world. CSC has around 90,000 people, of which about half are dedicated to doing government work. So, on the commercial side, which is where the Indian companies are competing, CSC’s total staff is only about 45,000 people. Looking at their size in terms of number of people, Indian companies are ramping up very fast and growing. The growth in terms of headcount for Tata has been almost 30% over the last 3 years. This is where the competition is going to be.

Even though revenue wise they are much smaller when compared with the multinationals, that is also is growing rapidly. In terms of profits: the profits for the top 5 Indian IT companies last year grew at somewhere around 20-30%.

Furthermore, the Indian companies are now listed on the New York Stock Exchange and most of them are on Nasdaq. By having a listing there they are not only getting visibility but also access to low cost capital, as the cost of capital in the US is very low as compared to India. They are having phenomenal Price Earning (PE) ratios. The top tier companies are commanding the kind of PE that Silicon Valley startups command. Even in terms of market capitalization, the top Indian companies compare very favourably with anybody.

The Indian companies are not serving some small shops, but the best including the Fortune 50 and Fortune 100. Maybe, the relationships are at a lower level today, but it can be leveraged to get more business from them… They are also fast establishing global presence in terms of operations. These companies have been showing positive signs on the acquisitions front as well. TCS, Wipro, and Infosys etc. have made a lot of acquisitions of foreign companies in the last two years. But, the sizes of their acquisitions are still small when compared with the size of acquisitions that an American company with similar kind of market cap.

The Indian companies are expanding their global outlook and reach and setting up centers globally in the US, China, Japan, Malaysia, Czech Republic, etc. For instance, Infosys plans to have around 25% local staff by 2012, TCS is asking every employee to learn a foreign language and Wipro CEO’s main office is in the US. So, in another couple of years, we’ll have MNCs which are of foreign origin and MNCs which are of Indian origin.

Some of the key strengths of the Indian companies vis-Ã -vis the foreign MNCs is that these companies can take a longer term perspective as they don’t have as much stock market pressure as the typical American companies. Furthermore, in the West, every successful company piles up a lot of debt and that is how they are able to leverage and do acquisitions. Indian companies are not doing as many acquisitions and as a by-product of that have very strong financials. Another factor working in favour of the Indian companies is their flexibility, as they are not wedded to an approach. They are also investing for the future-in training and process maturity. By contrast, the multinationals have a short-term orientation, quarter-to-quarter focus, lack of much India experience, higher cost structure in India and higher sales cost.

However, the multinationals score over the Indian companies in terms of their size, financial muscle, and visibility. Even their relationships are typically at the CEO level, whereas the Indian companies’ relationships with customers are largely at the CIO or lower level.

Multinationals are now enhancing their local presence. Most understand the change in environment and are building and leveraging their India resources, using India as the main offshore option, scaling up offshore strength, doing acquisitions in India, pursuing local markets, providing end-to-end services from offshore, involving offshore in client facing roles and pricing aggressively. Many of them are also using profit center and direct selling approaches. Companies like IBM, HP, Accenture, CSC and even other IT MNCs like Keane, Perot, Convergys are increasingly ramping up their Indian operations in terms of their head count and customer base. India is becoming an integral part of their global sourcing strategy, they are promoting India in the large deals and are investing including in acquisitions. While initially they were tentative, these companies now understand that India is the name of the game and the good results are further reinforcing their strategy.

The net result of this evolution is that the differences between the Indian companies and global MNCs are getting blurred in the short term but the gap will widen in the long term. One can even expect three and possibly five Indian companies in the top 10 IT services companies in terms of profitability by the end of the decade, possibly in terms of revenue also. But the MNCs will certainly gain and remain strong in the longer term with their sheer size and ability to grasp humongous opportunities globally.

International corporations have several categories depending on the business structure, investment and product/ service offerings. Transnational companies (TNC) and multinational companies (MNC) are two of a these categories. Both MNC and TNC are enterprises that manage production or delivers services in more than one country. They are characterized as business entities that have their management headquarters in one country, known as the home country, and operate in several other countries, known as host countries. Industries like manufacturing, oil mining, agriculture, consulting, accounting, construction, legal, advertising, entertainment, banking, telecommunications and lodging are often run through TNC’s and MNC’s. The said corporations maintain various bases all over the world. Many of them are owned by a mixture of domestic and foreign stock holders. Most TNC’s and MNC’s are massive with budgets that outweigh smaller nations’ GDPs. Thus, TNC and MNC alike are highly influential to globalization, economic and environmental lobbying in most countries. Because of their influence, countries and regional political districts at times tender incentives to MNC and TNC in form of tax breaks, pledges of governmental assistance or improved infrastructure, political favors and lenient environmental and labor standards enforcement in order to be at an advantage from their competitors. Also due to their size, they can have a significant impact on government policy, primarily through the threat of market withdrawal. They are powerful enough to initiate lobbying that is directed at a variety of business concerns such as tariff structures, aiming to restrict competition of foreign industries. Some of the top TNC’s and MNC’s are General Electric, Toyota Motor, Total, Royal Dutch Shell, ExxonMobil and Vodafone Group.

A transnational is just another name for a multi-national. The fashion term transnational still does not remove the requirement for a country to report to a parent company somewhere; there will always be an ultimate parent. In a structure, any amount of subsidiaries will roll up through the group structure to a head office.

A transnational is just another name for a multi-national.

There can be many regional head offices in a structure. Companies are residents through the structure to the ultimate ownership of the company and where the parent files its tax returns.

There are many differences between TNC and MNC. Though they are both abbreviations, they both stand for two different things. TNC stands for transnational companies. MNC stands for multinational companies. Both of them operate in different countries. TNC’s does business in a variety of different companies.

Their companies are richer than many less developed countries. Some of these companies include BP, Amoco, and Nestle. Multinational companies operate in two or more countries that are different than their own. Examples of those companies include Acer and Adidas. TNCs offer foreign operations. MNCs will invest in other countries, but they do not offer or coordinate products.

In order to understand these two, it is important to know what they both mean. When you say TNC, this means transnational company. When you say MNC, this means multinational companies. A lot of people assume that TNC and MNC are the same, probably because they have a lot of similarities.

There are some differences, as well. For example, TNC is known to be some sort of enterprise or a large corporation that will have the ability to control its company even if the company is placed in a different country. MNC will also have some stores in other countries, but they will have no say if in case there are some differences with the items that are being offered.

TNC and MNC are often compared to each other because most people assume that they are one and the same. It should be remembered that MNC stands for the multinational company while TNC stands for transnational companies. Take note that both of these enterprises are known to offer their products and services outside their usual country.

For the multinational company, this comes with a home company plus the different available subsidiaries. A transnational company will not have subsidiaries but will probably have different companies that can be spread out in different locations. Multinational companies also follow a centralized management system, while a transnational company will not follow a centralized system.

TNC stands for Trans-National Corporation while MNC stands for Multi-National Corporation both have many similarities. Both corporations usually have their headquarters in one country, and they do business and operate in many other countries. The headquarter nation is known as the home country, and other affiliates are known as host countries.

The significant difference between these two corporations is that MNC usually has an investment in other countries but do not coordinate product offering. TNC has operations in foreign investments. It gives each foreign market its marketing power.

Organizational transformation is the process of transforming and changing the existing corporate culture to achieve a competitive advantage or address a significant challenge. It can be an exciting time for any organization. It is visible action taken by organizational leaders to move from the present to the future in order to achieve a specific outcome or benefit. It typically involves many, if not all, of the people in the organization and has the potential to refocus and reenergize the entire workforce.

The challenge for many organizations though is knowing their is a need for organizational transformation, but not being certain of what the corporate culture needs to be transformed to. For example, you may have formal mission statement and company values defined, but when it comes to having organizational leaders articulate the organizational culture in a clear, succinct way, they struggle.

Yet this is the first and most important step to achieving organizational transformation: understanding your existing culture. Here, we’ve broken down the difference between mission, values, and culture to help you get started. Once you can distinguish between these terms and clearly define your organization’s current culture, you will be able to move forward with confidence.

Mission

First, the mission or vision – two words that can be used interchangeably without problem. A mission is fairly straightforward: it is your organization’s reason for existing and the charter under which leadership operates. In other words, what purpose does it serve?

Values

Values are the principles by which the organization abides. For example, if the values include “empowerment” and “integrity”, then it’s likely that employees demonstrate respect for each other in their daily interactions, assume responsibility for mistakes, and hold themselves accountable for results. If values include “excellent customer service,” then a focus on the customer (internal and/or external) influences everything an employee does in his or her workday. While values are important for formally defining culture and influencing, remember that organizational culture is more complex than a few broad, sweeping words.

Culture

You can think of culture as your organization’s personality, as defined by the sum total of all behaviors of the individuals within that organization. The key to thinking about organizational culture is looking at how things are done. Those working in a culture may or may not be able to articulate exactly what the culture is, but they will convey it through statements like “Everyone here works long hours” or “We just seem to rely a lot on one another.”

Keep in mind that an organization’s written values may be aspirational and not an honest representation of its current culture. Closing the gap between an organization’s professed values and its actual culture is often the point of cultural transformation.

Defining Your Culture

If you want a complete, honest picture of your culture as it is now, it’s important to talk to employees at all levels of the organization. You’re looking for their honest opinions about what it’s like to work there, how they feel about the culture, the leadership, their own teams and divisions, and so forth. You may want to bring in outside consultants for this process, as they can offer not only expertise, but an unbiased perspective as well.

Here are a few different approaches you can take to gather feedback from employees about the existing company culture:

• Engagement Surveys: measure the mental and emotional connection employees feel with their jobs and their organization.
• Focus groups: this approach allows organizations to capture feedback on how individuals feel about their own department in relation to the culture, allowing the organization to pinpoint problems or areas of improvement.
• Meetings with high-potential employees: these employees typically represent key influencers in the organization and their feedback tends to be reasoned, well-balanced, and represents the best interests of the company. Their feedback is crucial to defining the current culture.
• Meetings with executives: an organization’s culture is a result of these executive’s leadership skills which makes their feedback vital in the definition process.

As you might imagine, having actual conversations with employees yields the best insights to your organizational culture. This process may unearth areas of dysfunction or other issues, but the more concrete information and examples you have, the better equipped you are to undergo a culture transformation that is successful.

Businesses face challenges every day what would make a business owner, executive, or manager think organizational transformation is necessary?

There are many symptoms. One symptom could be performance-related. If you see lags in quarterly or yearly reports, you may have a more significant problem on your hands. Another indicator could be culture-related. Is there an undeniably high turnover rate? Or maybe there are leadership-related indicators like a lack of employee training or poor communication. There are many tell-tale signs; these are just a few. Knowing what to look for and keeping a keen eye on those areas will provide insight into whether or not transformative change is required.

With the smaller, everyday problems that are relatively easy to attack, taking a page from Amazon, and implementing their “two-way door” approach could work. That technique provides freedom to try something out and, if it doesn’t work, you simply step back through the door, reset, and choose another way to tackle the problem. It’s a straightforward tactical implementation that will need evaluation to decide if the course pursued is working or if a reset is necessary.

The “one-way door” approach is far more complicated. This methodology requires a lot of planning, data, thoughtfulness, full attention from the whole team, and all-hands-on-deck collaboration. And, once you’ve stepped through the door, there’s no way back. There’s no reset button. This approach requires contingencies, technical work, and thorough data analysis. A good plan is vital, and everyone involved has to be onboard for it to work. This method requires restructuring, regular and transparent communication, high-risk investment, and laser-focused implementation.

It is not an easy task to give a comprehensive and complete definition of international marketing information system (IMIS), which would be easily understood at the same time.

Defining difficulties arise from the complexity of the aforementioned system, interwoven elements that make up the IMIS, their entanglement and complementarity with other activities in the enterprise, as well as understanding the role and importance of the IMIS. In order to understand properly the meaning of the IMIS it is recommended to start with the etymological analysis of the IMIS concept. The compound ʺinternational marketing information systemʺ will be briefly analyzed word by word ʺsystemʺ, “informationalʺ “marketingʺ while the adjective “internationalʺ is in brief content analyzed through the entire text.

It is important to understand correctly the meaning of the word ʺsystemʺ because it is the basis for not only a IMIS, but also any other form of organization. According to Efraim Turban, Ephraim McLean, and James Wetherbe (1999, pg. 40, 41) a system is a collection of elements, such as: people, resources, concepts and procedures, intended to perform an identifiable function or serve a goal. A system is separate from its environment by a boundary. The system is inside the boundary, whereas the environment lies outside. In short, the system is determined by elements, its tasks and purpose, as well as the limits that can be very abstract. Especially interesting are the systems that collect and process various kind of information. Information system (IS) of enterprise is defined as a set of human and technical means that, with a certain organization and methodology, perform the collection, storage, processing and disseminating to the use of data and information (Lazo Roljić, 1997, pg. 23). IS can be represented graphically by the diagram as follows:

International Marketing Information System refers to the system designed for regular collection of required data related to international markets and analysis. According to Samuel V. Smith, “marketing information system is an interacting, continuing future-oriented structure of people, equipment and procedures. It is designed to generate and process an information flow to aid decision-making in a company’s marketing programme.” The marketing information system is, thus, much broader than marketing research. Marketing research, in fact forms a part of marketing information system.

The functioning of the international marketing information system

For successful operation of a IMIS is necessary to exist three sub‐systems shown in the second figure. In the following text will be briefly analyzed each of the subsystems and connections between them.

Information components: Source of the required data is the basis of the work of any of information system. All data sources, from the point of origin can be divided into external, internal and other sources.

External data are: macroeconomic indicators, data on infrastructure, as well as data on market size. Data about macro‐economic situation in individual countries, regions or globally, could be only the secondary. The most complete such information can be found in the database of: UN, World Bank, OECD Economic Indicators, Eurostat and the like, as well as on the websites of other institutions that monitor such indicators. Data on market infrastructure can also be geographically structured.

A complete picture about same market could be obtained only by visiting that market, observing it and talking with customers and business partners, looking at shopping habits and the type of retail outlets, monitoring advertisements on electronic and print media, looking at weather conditions, geographical terrain, quality of transport infrastructure and the like.

Issues in the Data Aggregation Process: IMIS could not function ideally just on the basis of data collected. There are also some technical problems, for example: quality of data collected, data entry, constantly update the content of the data collected and the like. The quality of data collected depends on the possibility to make comparisons with data collected in other countries. This problem is usually related to the existence of different data collection procedures, as well as different accounting practices between countries and regions of the world. Data are presented in units of measure that can be quantitative, qualitative and monetary indicators (e.g. goodwill). Quantitative measures generally are not a problem.

However, monetary measures are subject to strong and rapid changes due to: changes in exchange rates, price fluctuation on stock exchanges or other markets, changes in fiscal policy of the observed countries, or due to changes in the ways of their calculation. Entering data procedures define the degree of similarity and type of data to be collected to be useful for the system. There have to be defined by whom and how to enter data within the enterprise, in order to make collection procedures more successful. Also, it have to be defined how to change data presentation to make them comparable. This is particularly important for data coming from external sources. Data issued by the UN or World Bank generally do not have mentioned problems because those data usually cover the entire world, and their parameters are either global or highly standardized for certain regions or countries. The problem is with a regional or national data. These problems are reflected in different ways of: collecting, sampling, systematization, generalization of data and the like, to the language of presentation. It is necessary to ensure that the system continuously collects new data and to processes them. The processed data are synthesized, in other words those processed data are the basis for drawing conclusions. New information should be compared with previous ones and, in the case of difference, investigate the difference and inform management. The system should be constantly maintained and serviced.

Application (tasks) of IMIS:

IMIS is used in performing the following four tasks: scanning the global environment to monitor trends and pinpoint those with specific implications for the geographical areas and product markets in which the company is involved, assessing how to reallocate resources and efforts across different countries, products markets and target segments so as to achieve desired rates of growth and profitability, monitoring performance in different countries and product markets through the world, and transferring ideas and experience from different

countries and areas of the world throughout the organization.

Feedback: Even if it is not shown in the previous figure, the importance of feedback should be particularly emphasized. Through the previous analysis of IMIS it is mentioned the importance of re‐entry of data into the system. The information flow in IMIS is continuous. This is a fundamental feature of the marketing information system that ensures the quality of marketing decisions. Based on the information collected and create through the IMIS, the company affects its environment. The environment reaction creates a new situation. New data from changed environment represents a new entrance into the system. In that way a company gets a feeling about the success of implemented decisions, and the effectiveness of an IMIS, which in turn should be constantly creating new, more favorable business conditions for the company.