Question: What are barriers that businesses need to overcome in foreign countries? What are alternatives that businesses can utilize to prevail over these barriers?
Businesses working in foreign countries have numerous barriers to hurdle. Some of these are:
1) Customs regulations, tariffs and taxes (Hann, 2010)
These are imposed for various policy reasons, not the least of which is the requirement to raise revenue. In addition, national laws differ from one country to another and there are other barriers relating to language, culture and normal business practices in foreign countries.
Overcoming this barrier:
Hann (2011) suggested the use of the power of the regional government blocks in trade policy change. He said that elimination of customs barriers within the bloc, free movement of goods and services, free movement of capital and freedom of establishment for enterprises within the member countries has made it much easier for enterprises in member states to trade freely throughout the Union.
Mirkovic (2012) suggested utilizing access to networks and overseas partners - he said that industry bodies can help in this instance as can online community forums and news outlets. Strengthening SMEs' capabilities can also be achieved by creating clusters which bring together companies, universities, research and development and local public authorities. Sharing ideas, expertise, contacts and best practice is a great way to trade more internationally - knowledge is power after all.
2.) Political Chaos (Pokharna, 2001)
Statistically, you are more likely to face such a contingency in a foreign land especially if you set up a physical business entity.
3.) Foreign Exchange Fluctuation, Financial Costs (Pokharna, 2001)
Financial costs are an important aspect of business. One of the challenges of doing business internationally ...
The solution shows the different barriers to doing businesses in foreign countries and how to overcome them.