Aug 13, 2019 in Business

International Business Communication

International business communications is a branch of business studies that equips students, businesses and business leaders with excellent and effective communication skills that will enable them to communicate effectively globally irrespective of the inherent cultural differences. The 21st century has led to globalization and therefore borders and boundaries are today, a non-issue when it comes to conducting business. Businesses are getting clients from all over the world, and this makes real the possibility of dealing with international clients. As such, the possibility of encountering international business communication is has become ever so high. With increasing globalization, business persons need international business communications skills now more than ever.

According to Wild, Wild & Han effective application of IBC skills relies on the understanding that culture affects four key aspects international business communications. Culture will affect the structure of the business talk, the speaker, the audience, and participation. One importance of IBC is that it enables international managers, and business people overcome issues related to international business, barriers to communication being a major concern. Secondly, IBC enables one to identify, understand and appreciate other cultural differences and communicate in a manner that is in agreement with the local people’s culture.

Advantages of International Business Communication

As described above, IBC is key in helping businesses improve performance and become successful in their different global markets, both existing and potential markets.

Promise of Wider Market

Ever since globalization set in the 21st century, businesses have strived to expand their operations across borders, defying the rigidity that had been set by boundaries earlier on. The ability to do business with other countries irrespective of cultural differences is one of the major advantages of international business communication. The products and services provided by organisations are no longer constrained by geographic boundaries or nations that have the same culture and language as the organisation’s parent country. The trend today is towards global business communication whereby a person from New Zealand can purchase a company’s product or service just as easily as a person down the street would by the same product or service. In turn, the easy with which products and services are provided all across global markets will drive sales up and consequently lead to a higher generation of revenue. Higher sales also mean that the number of consumers is increasing, and this enables an organisation to increase its market share.

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A company that has benefited from increased market share as a result of international business communication is FedEx. FedEx realized that with globalization, the need for fast courier services would increase. To tap into this market, the company’s management decided to hire, train, and motivate hundreds of sales representatives who had the ability to speak different languages and represented various cultures. As a result, FedEx has become and is still is, one of the world’s leading courier service companies, second only to DHL Express.

Improves Cultural Education

It is worth noting that the core of international business communication is culture education. Doing business across borders is not an easy task as international managers have to grasp local cultures within a short period. Most companies have ended up failing in this aspect due to little or no research. Failure to learn cultures in the locality within which a company operates can lead to communication failure.

One communication failure example that was of epic proportions involves Best Buy, a well-known American electronics and entertainment retailer. Best Buy appeals to most Americans, but surprisingly the company has failed to make any form of headway in foreign markets. In 2011, Business Insider reported that Best Buy had failed in its European market as a result of a poor marketing strategy. The company’s management failed to realise that European consumers have different culture to their American counterparts. Specifically, Best Buy failed to learn Europeans preferred small shops to large stores; it was the market's culture. Best Buy, therefore, failed to make any sales as it did not take time to learn the region’s culture. This was a learning opportunity for them despite the fact the company had to learn the hard way. The same company again failed to perform in China for the very same reason, inability to learn Chinese culture. According to Shaun Rein, a China Market Research Group, Best Buy failed to realise that the Chinese market prefers differentiated product lines. The company also failed to adapt to the shopping preferences of local consumers.

McDonalds on the other hand, although an American company has its products consumed all around the world. In India for example, McDonald learned that the Indian culture forbids Indians from eating beef. Realizing that India was a potential market due to its high population, McDonalds decided to replace its beef-based Big Macs with lamb-based Maharaja Big Macs. The company appreciates and puts emphasis in learning and understanding cultures in all their markets. International business communication, therefore, gives businesses an opportunity to learn different cultures before beginning operations. Cultural education can best be achieved by conducting research and surveys on the market to learn what the local customers prefer and what they do not.

New Product Lines

Different markets have different needs, and demands and companies must be able to meet these demands if they are to remain relevant in an ever-changing business environment. International business communication, therefore, allows businesses to come up with new product lines for different markets, and this increases sales and market share. The case of McDonalds replacing its beef-based Big Macs with lamb-based Maharaja Big Macs is a prime example. Many may be of the opinion that these new products come with added production costs that may affect a business’ bottom line. This is however not the case and most of the time the costs are lowered depending on the availability of labour. In Asia for instance, production costs are relatively low, and this, therefore, doesn’t hinder the production of new lines of products.

This feat is only achieved in international managers understand international business communication as it will allow them discern the needs of a new market. Once this is established, the business embarks producing products that exactly meets the markets demands. The positive that comes with new product lines is that in most cases, countries found in a particular region or block, usually have similar cultures. For instance, Scandinavian countries have similar cultures as do Asian countries. Therefore, if a company through its international business communication produces a new product line for its Swedish consumers, there is the likelihood that the same product line will be consumed by consumers from Iceland, Norway, Denmark and Finland. This means that the company will not have to develop other new and different product lines for all these countries since their cultures are alike.

Disadvantage

Expensive

Despite its advantages, international business communication has its disadvantages. One disadvantage of IBC is that it is expensive to implement. Since international business communication requires learning and understanding different cultures, it is a must that a company conducts research and surveys, train its employees on different languages and cultural aspects, hire new and local employees. Additionally, in most cases, businesses whose products fail in a certain market as a result of their failure to learn the culture of their new market learn from such mistakes and implement correctional strategies. This may be in the form of developing new strategies or complete introduction of another product or service. There is thus a financial risk related to international business communication. A good example of how international business communication can be expensive to implement involves Wendy's, an American fast food chain. When Wendy’s opened its stores in Japan, it had carried out market research on the market and the country’s consumer culture. However, after opening stores in 71 locations in Japan, Wendy’s had to close all of them in 2009 due to poor sales. The amount of financing that went into opening its stores in 71 locations coupled with extensive marketing must have been extremely huge.

Summary

International business communication equips, businesses, business leaders and business students with effective communication skills that will enable them to conduct business effectively in a world that it constantly becoming small. IBC therefore, eliminates challenges brought about by international business issues. IBC, if properly implemented promises businesses a wider market and consequently increased market share. Secondly, it improves cultural education as businesses and business people strive to learn other cultures in their course of doing business. Thirdly, IBC leads to the introduction of new product lines which is a product of thorough market research. However, IBC is an expensive endeavor as wrong implementation will lead to losses considering the amount of investment that goes into research, hiring new employees and training both new and existing employees.

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