Reaction Paper A company in a few short years becomes a well-known domestic enterprise. Since attracted international market, have not explored aware of the pros and cons of foreign markets, it has to enter the markets of other countries. I agree with the authors, it’s better to think more carefully and use of analytical tools to make accurate judgments and make the most important decision-making. The distance between the two countries can be revealed, along four basic dimensions: cultural distance, administrative distance, geographical distance, economic distance.
Each of these dimensions of distance encompasses many different factors, some of which are readily apparent; others are quite subtle. For example, cultural distance is including different languages, different religions, different social norms and different ethnicities. First of all, they are a U. S. company to develop new markets in China. The first face of is the language problem. Recruit more employee and the culture shock is necessary. The company will have to pay more time and money to training new employees.
They need to be understood as soon as possible the company's history, products and system. At the same time, keep in touch with the new employees, is better to obtain more important information from the local market and get faster of customer feedback information. In different cultural market, it is necessary to give the company repackaged. Let the locals a fresh advertising; redesign of the product; find a better spokesperson. For different races and cultures, it is very difficult to find their own position in different markets.
Secondly, Administrative or political distance is including colony, colonists link, common currency and trade arrangements. We can see this should be participating in the political problems. Sensitive issues between the various countries have different laws and national. Get along as a foreign merchant (or company), and the government is essential. Here must pay more attention to the relationship with the local government to respect its needs, interests, and it can get from you here. Need to be better dealing with environment problems.
Recruit more local employees as much as possible. Support everything about government policy reforms. Then, Geographical distance is including physical distance between the target country, size of country, access to waterways and oceans, and the internal terrain, transportation and communication infrastructure. For instance, affects the costs of transportation and communications, so it is of particular importance to companies that deal with heavy or bulky products, or whose operations require a high degree of coordination among highly dispersed people or activities.
Finally, Economic distance is between the wealth of the two countries and changes in the cost and quality of financial and other resources. Through each country's economic model and develop the company's long-term goal. Here is more important, must be based on the country's economic model and understand the long-term national economic conditions. It’s better to proper precautionary measures at any time. Give an example, the Chinese economy in 2010 due to the real estate bubble burst.
Lead to the market economy was turmoil. Mainland China appears all walks of life of small and medium-sized enterprise collapse phenomenon. It is instantaneous shrinking market consumption. Before this happened, to prepare evacuate the country or the market at any time, this can be a good loss control. In the conclusion, this article by the authors discusses the different types of distance will affect how many different types of industry, and how to great distance can change a specific company.