Critically discuss how language differences between home and host Essay

Critically discuss how language differences between home and host country can influence MNCs entry mode strategy - Essay Example However, these language barriers can have different effects on different entry modes. The extent of MNCs exposure to language barrier will therefore depend on their entry mode. Moreover, there are various literature examining the effect of formal institutions and informal institutions (mainly language) on entry mode choice. Although the effect of language on entry mode choice is relatively understudied, there exist studies that examine the impact of language on some of the entry modes separately. The rising level of globalization has become of immense importance currently. More and more firms commence to look to foreign lands to increase their businesses as the globe becomes more and more interwoven. To manage such operations across foreign boundaries has become of the biggest issues for international firms today (Egger, 2012). The international economy has formulated a business framework which needs firms to look past the traditional reasoning of the home market, and commence instead observing at businesses from a foreign global view. The technique a firm venture from their market to new foreign markets geographically is of immense importance for how best the firm attains its goals with their various businesses. Small and average sized companies, which have taken their choice to internationalize, need to grow into foreign markets face the setback of deciding on the best structural framework. There are numerous factors, which encourage firms to commence their operations in foreign markets (Feely, 2003). The most common include the hope for economies of scale, the experience curve effects outcome from an expanded level of outputs, and the reality of the existence of markets which are beneficial in the international markets which is not present at home. It can be believed that the developing in dissemination of information, progress in travel conditions, decrease in tariff issues and others have

Gold buying trends and investment in saudi arabia Research Paper

Gold buying trends and investment in saudi arabia - Research Paper Example These conditions illustrate market failure since the investors are not aware of the possible opportunities (Trivedi & Behera 2012). Real estate investment is the most preferred option among the Saudi Arabian investors in comparison to gold (Smith 2011). Such occurs since the interest rates are low, the environment has a higher liquidity, there is a population increase and the demand for housing is high (Kelly 2011). Moreover, the government does not have adequate housing projects, which indicates why investors venture on this opportunity of real estate investment. On the other hand, women depict a viable market for the gold since they create a strong demand for the commodity. Women need gold for gifts and jewelry they represent during ceremonies (Rivlin 2009). However, sudden increase in the price of gold makes women not to buy jewelry and focus on other alternative commodities. Nevertheless, it is anticipated that as the population increases, the demand for gold will increase. Since ancient civilization in the Hejaz area, Jeddah creates a unique gold market (Karunagaran 2013). This is because Jeddah has a sea port and acts as a main gate to al medina and Makah, which makes it a strategic market for gold on annual basis during the hosting of the pilgrims. Saudi Arabian Investors are also oriented on economic activities, which are related to mineral fuels. Such occurs since the country is involved with the exportation of mineral fuels (Middle East Monitor: Gulf 2014). Other investors focus on foreign direct and indirect investments because they regard such investments as lucrative in terms of the returns on their investments and earnings on profits. Their major focus of foreign investments is in the United Kingdom, Japan, United States, Germany, France and Switzerland (Erb & Harvey 2013). Investors favor other alternative investments instead of gold because they consider such investments to have low risks in comparison to gold trade investment.