This essay aims at analyzing the argument that as a result of every business having the opportunity to become global because of the internet, environmental scanning of potential markets, and developing internationalization strategies, are no longer necessary for businesses glaring at internationalism. The posit ideates that simply advertising their goods and services on the internet is enough for businesses. The position of this essay is in opposition with the stated posit.
Inhaltsverzeichnis
Introduction
Globalisation, Internationalisation, and the Internet
The Internet and Internationalisation
Necessity of Environmental Scanning of Potential Markets
Why Environmental Scanning and Internalisation Strategy Might be Unnecessary in the Context of the Internet
Conclusion
Introduction
The internet, by linking millions of networks, people, and thousands of businesses, has created a single network of communication (Chirkova, 2011). This linkage has aided the globalisation of the business world.
This essay aims at analyzing the argument that as a result of every business having the opportunity to become global because of the internet, environmental scanning of potential markets, and developing internationalization strategies, are no longer necessary for businesses glaring at internationalism. The posit ideates that simply advertising their goods and services on the internet is enough for businesses.
The position of this essay is in opposition with the stated posit. However, both sides to the argument shall be observed, and with the support of analysis and the aid of well-grounded academic sources, a conclusive answer shall be deduced.
In this essay, globalisation and internalisation will first be defined, followed by the link between the internet and internalisation, and afterwards, the argument for the necessity of environmental scanning of potential markets in the context of the internet.
Globalisation, Internationalisation, and the Internet
Globalisation, according to Charles W.L Hill (2011), is the integration of historically distinct and national markets into one huge global marketplace.
Globalisation – which as propounded by some historians, came into inception in 1492 (O’Rourke and Williamson, 2002) – has been revolutionized many times by different technologies of various eras.
The term internationalisation covers a variety of things (Drilhon, 1993), and must not be confused for globalisation. Internationalisation refers to the increasing importance of international trade, international relations, treaties and alliances (Daly, 1999, p. 31). Hence, internationalisation encompasses international trade and relations, while globalisation incorporates all world markets into a single market.
Both these concepts permeate the context of cross-border relations, but their slight dissimilarities arise from the differing dimensions that define them.
The Internet and Internationalisation
The internet is the technology which has revolutionized globalisation and internationalisation the most, and has contributed significantly to the connection of markets all over the world. With 2.1 billion internet users in the year 2010 (Central intelligence Agency, n.d.), from a total world population of 7.9 billion (Central Intelligence Agency, n.d.), the internet is the largest network in the world.
It is precisely due to its vast coverage that the internet has become a platform upon which business, small and big, carry out international trades.
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Figure 1 (McKinsley Global Institute [MGI], 2011)
As depicted in the figure 1 above, when last calculated in the year 2009, the internet contributed 2.9 percent of total worldwide GDP (Gross Domestic Product). This supports the fact that online business is growing.
In Australia alone, it is forecasted that internet traffic will triple by the year 2017 (Ryan, 2013).
Therefore, every business does indeed have the opportunity to become global because of the internet.
Necessity of Environmental Scanning of Potential Markets
Environmental scanning is to analyse the signal of the new, and the unexpected occurrences in the world (Brown & Weiner, 1985; Morrison, 1992). Strategic intelligence is provided by environmental scanning, as a useful tool to determine organisational strategies (Hong, Glowacki, Shepard, and Rathgeber, 2008). Therefore, environmental scanning is a necessity in the business world.
When coming into the context of the internet, the concept of environmental scanning slightly loses its relevance. Nonetheless, its overall necessity is maintained based on certain factors.
The first factor, is the need to know where demand is most concentrated. In order to maximize profit, and realize gains as quickly as possible, environmental scanning is necessary to know what regions of the world would have greater demand for an organisation’s goods or service. For instance, a manager could choose to internationalise his/her business through the internet. After creating a website, it would be more reasonable to scan for potential markets. Knowing what country demands more for the goods being sold, a manager could proceed to market the products by advertising in forums and social networking websites most frequently visited by residents of the country.
Figure 2 below shows data on the amount of Australian internet traffic based on sections.
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Figure 2: Australian internet traffic by section (The Guardian, 2013).
A business seeking to offer world news service for a fee, would look at the data above, determine that a figure of 1,392,432 individuals who view world news monthly is sufficient for him/her to concentrate marketing in Australian internet forums and social networks.
Another factor that necessitates the performance of environmental scanning is security. It would be appropriate to accentuate the statement ‘connection of computer networks and organisational computer facilities around the world’ when referring to the internet. This statement alone carries many drawbacks.
The United States Secretary of Defense, Leon Panetta, once said “Just as nuclear was the strategic warfare of the industrial era cyber warfare has become the strategic war of the information era,” (Symantec Corporation, 2013).
The internet is full of cyber-criminals who are always attempting to break past websites’ security systems in order to steal consumer bank details, e-currency account details, and similar sorts of information. In the year 2012 alone, Symantec Corporation’s internet defense software blocked an average of 247,350 cyber-attacks per day (Symantec Corporation, 2013). Therefore, a business needs to scan the levels cyber-security threats which countries face, before it concentrates its products in any of them.
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