American University Of Madaba AUM  

Finding International Business Partner Course: International Business Management

Instructor: Prof. Muhannad Al Rusan

Done By: Tareq Daoudi 120036

Contents 

Introduction: ............................................................................................. 3 

Problem: ................................................................................................... 3 

LITERATURE REVIEW ......................................................................... 3 

Four essential steps to successful partnering are: .................................. 3

Step 1: Plan your Strategy: decide what type of partner you need ..... 4

Step2: Seek and Select your Partner .................................................. 4

Step 3: Negotiate the Agreement ....................................................... 4

Step 4: Manage the Partnership. ......................................................... 4

But, Why it’s important to find an international partner? ........................ 4 

Conclusion: .............................................................................................. 6 

References: ............................................................................................... 7 

Introduction: In the last 30 years the technology and the communications sectors are evolved rapidly, so that break down the distances and make the world smaller. And it’s also decrease the time required to complete any interaction between parties.

Any fast changes will leads to instability, so the evolution of technology and communications sectors cause a lot of problems ,miscommunication and misunderstanding because of the differs of the cultures between people.

Problem: In the past Three decade the economical situation tend to be more dynamic because of the appearance and the rise of the Globalization concept. That leads the businesses to start thinking about expand their operations abroad of course to maximize the profits and to enhance the share holders’ wealth.

Of course it’s not a simple action can be taken without a strategic plan and an effective evaluation; because there is many barriers can destroy any operation want to be taken abroad such as the differences of cultures, exchange rate, regulation and taxation system.

For that it’s better to find a partner in the country what the company want to expand its’ business in to reduce the risk of failure, of course because the local partner will be more familiar with the aspects what mentioned above.

But how can we find an international business partner?

LITERATURE REVIEW Having defined my research questions I will now look at the available literature to find answers, and to further our understanding of the issue. I have organized my literature review thematically, and as such I divided my work into four different sub-categories each of which will be tackled individually.

Four essential steps to successful partnering are: Step 1: Plan your Strategy: decide what type of partner you need

Step 2: Seek and Select your Partner

Step 3: Negotiate the Agreement

Step 4: Manage the Partnership.

Step 1: Plan your Strategy: decide what type of partner you need 

Examine worldwide trends, opportunities, threats, competitors, other major players. From this review you will get a sense of:

· The most promising markets

· The most suitable products

· The niches they should fill.

Step2: Seek and Select your Partner 

Select your target region or country. Narrow the field. Select a region, focus on a few alternatives in the region. Prepare an evaluation matrix. This will help you eliminate risks and pinpoint potential opportunities.

Step 3: Negotiate the Agreement 

Visit the country. Visit early in the process and then visit often. Talk to your potential customers and partners. Find out why they would buy your products. Try to define some aspects such as:

Existing and potential demand, competing products, competitors active in the target country, your industry,infrastructure,regulatory,environment,taxation,currency,political stability, culture, and potential alliance partners.

Step 4: Manage the Partnership. 

Select your partner. Research possible partners, develop a short-list, and approach the short-listed companies.

But, Why it’s important to find an international partner? I prefer to share my personal experience about this issue. We have a family business operates in Amman, Jordan. We are distributers for foreign organizations for medical and pharmaceutical manufacturing. Many years ago, some customers from Saudi Arabia start demanding some of our products because they haven’t distributers for the products what they demanded, that encouraged us to expand our operations to KSA. We established an office there (after a lot of challenges and barriers). Start operations and the outcome were good but still not satisfied our expectations because we faced a lot of differences between Jordan and KSA about how the things can be done.

The worst experience what we faced was a PhD. Holder in one of the giant hospitals in Riyadh, he’s the head of the hospitals’ laboratory, so when we went to his office and met him he told us that he’s don’t need any extra new equipment to be installed in his lab, but he can make an order to buy our instrument ( cost approximately $ 200,000) and put it in the stock under one condition, which the condition is to prepare a full board vacation for him and his wife and his four kids to a five stars hotel for a month to Miami, USA! This was like a disaster on us, so we

decided to break down the deal; because one of the most important values in our company is the ethical issues, and it’s a bribe!

When asked our friends in KSA about this case, they told us it’s a norm, and most of companies in KSA in many fields are working in this way.

Our bad experience forced us to retreat and left the Saudi market, and this of course cost us a lot of losses either it’s money or efforts.

For that, if we asked our friends in KSA, or find a partner in KSA before moved there, definitely that will reduce the losses.

There is several questions must be answered before take any action about expand operations abroad or not:

Am I financially able to sustain an overseas expansion?

Expanding internationally requires a startup-like period that's longer than many entrepreneurs anticipate.

Do I need an international partner?

For many companies, it's critical to find a local partner when expanding overseas, Moore says. Partners can help facilitate sales, while keeping costs down for the home office.

Have I sized up the local competition?

Understanding your competitors abroad can provide insights into how--and whether--to expand. But many companies don't take time to figure out whether similar products and services are already available in a new market and what they would need to offer to compete successfully. Spending time abroad and speaking with potential customers can help to avoid costly mistakes.

Do I understand the cultural implications of the sales process?

Closing a deal abroad can be a vastly different experience than you're probably used to.

How will I need to adapt to the local culture?

Customize your product or service to meet local customers' tastes. At the very least, you will need to put your marketing message in the local language and make sure the meaning translates correctly.

Will I find the talent I need in another country?

If you decide to expand, finding local talent can be a challenge. Some countries simply do not have enough of the skilled labor companies may need. You also will be competing with established companies that know where to find talent and how to recruit local candidates.

Do I have the bench strength for international expansion?

You will need to assign one or two senior employees to your international effort. So, you need to determine whether you can afford to move people from their current responsibilities, as well as whether they bring--or can quickly develop--the necessary skills for overseas sales and marketing.

Have I built a solid foundation at home?

Make sure your business is stable on a day-to-day basis before pursuing overseas markets. For instance, you should determine whether your business could function well in your absence.

Conclusion: Finally, all businesses looking for achieving their goals, either if it profit or nonprofit organizations, for that it’s not acceptable move away from your track to goal. Strategic planning and pick the right part of your business equation is essential and important and not that easy thing to do.

In my opinion, the best way to establish an abroad business is by find the best partner plus involve a master team from your side to join the abroad establishment, because your expertise team will know how to manage and operate your processes effectively and efficiently.

By do this your performance will be increase in stability and will eliminate the risk of failures.

References: 1. http://www.entrepreneur.com/article/226517 2. www.forbes.com/sites/hsbc/2014/07/15/5-key-things-to-know-before-doing-business-in-

brazil/ 3. Article Name: How to find an international business partner? (Emma Henningsson,

Emma Rudén). (June 2007).