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Lecture 05: Challenges and Approaches, EPRG Framework
In international business, there are four approaches called the EPRG
framework: geocentric, regiocentric, polycentric, and ethnocentric
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In the
regiocentric approach, a company finds economic, cultural or political
similarities among regions to satisfy the similar needs of potential
consumers
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International companies go through five
stages, starting with the domestic company, followed by the multinational
company, the global company, and the transnational company
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China is the
world's largest economy, and the US is one of the world's most populous
countries, with the largest trade blocs in the world at the center of a trade
dispute between China and the US
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The UK was the first to
blame the China-US trade embargo, but it has been the strongest of its
kind in the country
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We are worried about the US-China trade war going on, which may have
a very serious effect on the world economy, as evidenced by the rise and
fall of oil prices that have plagued the global market since 2007
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Despite neither being largely
dependent on the US or China, foreign laws and regulations stemming
from international business have presented a challenge, with different tax
systems, rates, and compliance requirements making accounting a serious
headache
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For example, many companies run to places like
Singapore and Hong Kong because of better policies
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Company must consider the cost to remain competitive while still
ensuring profit
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For instance, IKEA struggled initially in China
due to the local competitor cost of labor and production
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However, companies must also consider

several other factors, including communication difficulties and cultural
differences
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To navigate potential communication
problems, one must understand religious and cultural traditions, as well as
their emotions
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For example, Facebook is
banned in China, partially in preference for national social networks
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The Indian stock market is also not doing well, and the
US is struggling to keep up with the current trend
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It is crucial to understand the
political, economic, and social landscape of the countries in which they
operate
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The third type of enterprise is a multinational corporation (MNC) which
operates in multiple countries but is managed from one country
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These include the challenges faced
by international businesses, the stages of internationalization, and how
companies are becoming more and more international
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Coca-Cola is an integrated global
enterprise that links global markets at profit
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These challenges include learning from each other,
developing a new way of learning, and helping others in the process
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