Nowadays, the companies are emphasizing on the importance of international business opportunities for their growth. The companies are developing their strategies to enter the foreign trade. The companies are having better understanding that international business opportunities enable them to earn more profit by offering products/services on international platform. There are a number of opportunities that companies can avail by making investment in an international location. The international business opportunities are shaping a bright future for the companies. In addition, there are certain risks associated with the international business opportunities. The company before entering into the international market need to consider those risks and also develop strategies to mitigate them (Kiss, Danis and Cavusgil, 2012). This essay is analysing the country of Latvia in order to demonstrate the concepts and theories of International Entrepreneurship. This essay discusses the potential issues associated with the international market by considering the real condition of Latvia [See Appendix 1].
This section comprises of weather, location and minerals exploration in the chosen country. The natural factors affect the life-styles of the people living in a particular area and it controls the economic activities of the area. The natural factors (weather, geography, minerals) provide favourable conditions to operate a business in one location (Aron and Jay, 2009) [See Appendix (2)]. The investors and company needs to get a better understanding of the location where they are planning to invest and start a business. The three major concerns considered by companies are location of the country, important cities in that country and boarders of that country. These concerns provide a general knowledge to the investors and companies that will help them to build a strong competitive edge. In addition, these factors will affect the operations of the company in that country (Autio, George and Alexy, 2011).The location of Latvia on world map provides this information that this country is located in Baltic region of North of Europe. The Riga is the capital city of Latvia. The neighbouring boarders are Russia, Belarus, Estonia and Lithuania. This country is having a coastal line of 498 kilo-meters. The Latvia is declared as the lowest population country in European Union with 2.22 million people (Marian, Nicole and Yee Kwan, 2011).
The geography and land features such as mountains, water bodies, deserts and plains have an impact on the nature of the business. The difference in land features indicates the difference in socio-economic conditions, political situations and cultural differences in different regions of the same country (Benjamin and Patricia, 2005). The topography of selected country is comprised of plateaus and plains. This type of landscape makes easy exchange among different locations. The transportation system can be improved in order to enhance the economic activity in that region. The cultural difference is very rare in Latvia as the people are following same beliefs, customs, traditions and language. The flow of same culture invites international business to invest in Latvia (Bruce, 2006).
In addition, the coastal line allows the sea to use as a transportation way. In this way, Latvia can be connected with the countries locating on the other side of the sea. The government of Latvia is offering the facility to use its coastal line for import and export activities to landlocked nation by charging fee. This will encourage landlocked countries to operate their businesses in Latvia so that they can avail sea for business activities. The water transport is being utilized as carrier for products in bulk which requires reaching long distance destinations. The daugava is the largest river that follows by Gauja and Venta River (Chris and Richard, 2006).
The weather conditions of a place have a strong impact on the economic activities. The country Latvia has four seasons winter, autumn, spring and summer. The weather conditions are supportive for the activities of trafficking. But, the winter season is extreme cold temperature because of the cold breezes from Russia. The winter season has snowfall which can slow down the activities of the business. Additionally, the month of June has heavy rainfall so the investors need to consider these weather conditions in order to start business (Marcus and Oliver, 2009).
Furthermore, the land of Latvia is rich in Barite, Dolomite, Peat, Limestone and good quality Clay. According to some geological surveys, the results show the availability of oil in some areas of Latvia. Currently, the government of Latvia is planning to invest on renewable energy resources such as solar energy, wind energy and biogas. The one factor to lack behind in economic development is the shortage of electricity. But the government encourages different countries to invest in the energy sector as it has potential (Mike, Paul and Deniz, 2007).
The control of country is in the hands of Saeima and it is a republican country. The country has stable political conditions in longer term. The performance of the government can be identified in 6 dimensions. The percentage ranking displays the better rating of government. In addition, the percentages are above 50 degree for all dimensions which defines the political stability of the government (Nicole, Patricia and Benjamin, 2011). According to the survey, Latvia has managed to place itself at 106th position in world with $32.2 billion Gross Domestic Production (GDP). Though, this amount indicated decrease in GDP from the results of year 2008 when GDP was calculated as $39.99. According to the statistics of World Bank, Latvia was considered as highest income country in 2009 but in 2010 the country ranked in middle income category (Nicole, Patricia and Benjamin, 2011).
The native population in Latvia is comprised of 60 % whereas about 27% of population is from Russia. The culture of Latvia is the amalgam of both regions, Latvian and Russian. The most practiced religion in Latvia is Christianity. The population follow all the beliefs associated with this religion. The national language of Latvia is Latvian which is followed by 58.2 % of population. There is a ratio of population around 37.5 % who speaks Russian language. Additionally, the Latgalian and Livonian languages are also under protection by law. The country is encouraging its population to adopt English language for its business and tourism activities (Paul, 2011) [See Appendix (3)].
Moving towards globalization forces, globalization can be characterized as "the inflexible joining of business sectors, country - states, and advances in a way that is empowering people, companies and country states to achieve the world more remote, speedier, more profound, and less expensive than any time in recent memory" (Mike, Paul and Deniz, 2007, p. 1015 ) [See Appendix (4, 5)].
In Latvia, globalization has some constructive economic outcomes, it advances development. Globalization has given new conceivable outcomes. In 2004, Latvia took part into the Europe's Union (EU), so that new exchange strategies could be opened. As indicated by the monetary information of the service, it can be seen that this nation has consented to twelve organized commerce arrangements with 29 nations. In 2009, nations which consented to unhindered commerce arrangement secured 89, 4% of Latvia's aggregate import and also 91.2% of aggregate fare. In year 2010, fare went up by 3 % than was in 2009. Financial aspects service has started to frame the traditions for an unhindered commerce with EU and has dropped traditions capacities (Svante, 2011).
Outside financial specialists were pulled in to contribute in Latvia. Confirmations demonstrate that financial exercises are developing year by year. For instance, FDI had expanded for 14% more than in 2006, trailed by abatement in 2009 on account of monetary decrease on the planet. Notwithstanding, there is a decent flag when outside speculator's enthusiasm for the Latvia economy has recharged with the monetary recuperation. A few financial specialists assume that FDI inflows will sum to 4-5% of GDP in coming years (Paul, 2011).
The globalization has influence on politics. After the presentation of national freedom, remote government offices were set up, different worldwide settlements were made, and Latvia joined European Union, North Atlantic Treaty Organization and other global associations (Mike, Paul and Deniz, 2007). Moreover, globalization influences the culture. There are two assessments about globalization on general public. One gathering of individuals says that gobalization is an immense opportunity to wind up a present day nation. It opens new chances and opportunities. On the other hand, globalization is a danger to the general public. It will change the first culture; have antagonistic effect on society, particularly youngsters (Shaker, Juha and JiFeng, 2005).
There are certain recommendations to improve the international strategies in order to increase the flow of international business activities in Latvia [See Appendix 5]. The higher level of education will enhance the understanding of globalization impact in terms of economics, politics and culture of Latvia. The following key points are required to consider for highlighting the importance of higher education. Such as the unpredictable issues in future can only be tackled if the people have better knowledge and techniques to develop improved strategies. The education will reduce the barriers in way of economic development such as poverty, diseases and conflicts. In addition, Latvia is considered as developed country so the people from under-developed countries can visit Latvia for education and business concerns. If the education system is developed and improved then it will also open new avenues of opportunities (Oviatt and McDougall, 2005).
At present, Latvia has good transport system such as city transit, highway system, seaports, air-crafts. According to the statistics the infrastructure of Latvia is on 55th rank among 139 nations around the globe. The government of Latvia needs to make an effort of improving transportation system in order to minimize transportation expense, on time delivery and to increase economic activity (Svante, 2011; Stephanie, Brett and Patricia, 2008). The importance of information technology cannot be ignored in terms of its role in improving business activities. With the help of advanced technology the company can run its off-shores offices in other countries. As discussed above, that Latvia has this potential of providing platform to landlocked nations to do business using seaports. With the help of advanced technology more investors will consider this location for their future business activities. The advanced technology helps the investors to monitor and control their off-shore offices without spending travel cost. The investors can utilize technology in terms of on-line conference calls, on-line training and online recruitment activities. The government of Latvia should consider the importance of advanced technology in terms of developing economy and meet the standards of international trade market (Shaker, 2005).
The international trade has increased in the economies around the world. The government bodies of countries are encouraging the international trade along with providing platforms to participate in the business activities. With the help of advanced technology, the authorities are introducing different systems such as risk-based analysis tool, electronic data interchange tool and single windows. These tools and systems help businesses to operate in different locations and also create a brand positioning in the minds of international customers. The trends of international businesses are being changed due to globalization. The analysis done in this essay is indicating that there is a potential in the land of Latvia. The government needs to consider different factors in order to increase the international trade activities as in turn it will develop the economy of the country. The globalization factors have a strong influence on the business activities. Due to globalization, the competition has increased in the market on national and international level. The entry barriers are increasing in the market so companies have to focus on their competitive edge in order to make a strong place in the market. The customers, nowadays, are more knowledgeable than ever. The companies have to focus on value driven products in order to meet the needs of customers. The government of Latvia has all the basic means to encourage an international trade on this land. The government needs to highlight the opportunities for international investors in order to increase the international trade.
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Mike, W., Paul, W. and Deniz, U., 2007. Internationalization of small and medium-sized enterprises (SMEs) and international entrepreneurship: A critique and policy implications. Regional Studies, 41(7), pp. 1013-1030.
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Shaker, A. Z., 2005. A theory of international new ventures: a decade of research. Journal of International Business Studies, 36(1), pp. 20-28.
Shaker, A. Z., Juha, S. K. and JiFeng, Y., 2005. Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation. International Business Review, 14(2), pp. 129-146.
Stephanie, A. F., Brett, A. G. and Patricia, P. M., 2008. International entrepreneurship and geographic location: an empirical examination of new venture internationalization. Journal of International Business Studies, 39(1), pp. 267-290.
Svante, A., 2011. International entrepreneurship, born global and the theory of effectuation. Journal of Small Business and Enterprise Development, 18(3), pp. 627 – 643.
Economies in Global Ranking to do Business
Latvia’s Indicators of Doing Business
Source: Doing Business Database
Areas of Achievements
Source: Doing Business Database
How Latvia and Competitor Economies Rank on Doing Business
Source: Doing Business Database
Time-line to Start a Business
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