The U.S. economy has recovered from the 2008 recession and has been growing steadily, albeit slowly, for the past 10 years. With few exceptions, its gross domestic product has also been climbing at the same gradual pace. Data analyzed by the Financial Times found that the U.S. GDP rose 2 percent in the first quarter of 2018.
Despite this continued good news, since the U.S. economy is relatively flat, many businesses are turning to international enterprise to drive profits. As such, there are several factors that global business management professionals should monitor constantly. Here are five factors that may impact your organization’s strategic business investments abroad.
1. Emerging Markets are Growing Quickly
While the U.S. economy may be in a late-stage cycle of economic growth, many other countries remain in the earlier stages. Despite the U.S. economy’s implications on global market strength, other nations are also putting up strong economic expansion numbers.
As Morgan Stanley pointed out, one of the key factors affecting emerging market (EM) growth is the stabilizing labor market. Many EM governments are now on a path to fiscal consolidation, creating a buffer to keep macro-stability standards constant and reduce the likelihood of collapse or other unexpected setbacks.
Not every EM is the same, however. Global business management professionals should weigh factors such as perceived financial stability, spoken language, cultural cohesion, and known or suspected government corruption levels before investing in the market.
2. Industry Leaders are Relying More on Data Analytics
Before the recent digital revolution, executives in leading organizations were praised for “gut” intuition and their ability to read and understand the limited data before them. As more devices become connected, however, the amount of available data continues to grow. According to Gartner data, an estimated 11.2 billion pieces of hardware will be connected to the internet by the end of 2018. That number is expected to climb to 20.4 billion by 2020.
Each of these devices generates information, but too much for traditional models to visualize. To combat this, and make all data actionable, technology developers have created data analytics programs that use advanced technologies such as machine learning and artificial intelligence to break down big data into digestible information.
According to Deloitte, organizations that properly leverage data analytics are able to spot global trends faster than their competitors. Data analytics can provide information in real time, letting organizations adjust on pace with the market itself. Data analytics can also be used internally, empowering enterprises with the tools to identify wasted resources and improve overall productivity.
3. Consumers Have Instant Access to More Product Information
Enterprises are not the only aspect of the global market to have access to more information; consumers are now increasingly connected. Pew Research Center data indicates that 77 percent of Americans own a smartphone. While this number tends to be lower in developing countries, global business management specialists must consider that consumers have instant access to information such as price, quality, and competitor information on any given product.
This places more pressure on companies to remain active online and to promote a positive brand image and product presence in every social arena. The constantly connected consumer not only has product information readily available, but also has instant access to trends, brands, and other companies. Customers are able to share their own experiences and hear the experiences of others on-demand via highly engaged social media communities and easily accessible news outlets.
4. Rapid Innovation Continues
Technology as a whole is moving rapidly. Innovations such as ridesharing and automated vehicle technology, for example, are reaching the market much more quickly than innovations of years past. Barriers that once took decades to overcome are now being tackled in years–like the issue of autonomous vehicles coexistence with pedestrians.
In the enterprise space, this perpetual sprint forward means that western companies can no longer automatically consider themselves at the forefront of technological innovation. In fact, the U.S. is not a leader in either manufacturing or service industry innovation, according to the Organisation for Economic Co-operation and Development.
With such rapid, global innovation, professionals must have robust business management skills that include the ability to identify and implement international technologies to aid businesses worldwide. Many industries take a rushed approach—believing that this pace is necessary to remain at the forefront. What it actually tends to do, however, is create holes and uneven production workflow, producing limited positive results and even leading to lost data or information.
While the speed of innovation is important, it is more vital that organizations understand where the market disruptors are coming from, why they are producing such an impact, and how the technology may better serve the enterprise.
5. The U.S. is Shifting Toward Isolationism
In past U.S. political landscapes, globalism has been a steady trend. The Trump administration, however, has thrown this reality into uncertainty. The administration has already implemented several tariffs, with more to be expected in the future. This, according to NPR, has created a noticeable effect in areas of the U.S. economy. Current talks of a trade war with China has also cast more doubt on international stability than was previously expected.
Additionally, the Trump administration has expressed its desire to alter existing international agreements. A Wall Street Journal article highlighted how the bottom lines of companies like Boeing and Airbus were affected when the administration left the negotiated Iran nuclear deal. Moving forward, it is unclear which, if any, other international agreements President Trump may decide to leave.
How Northeastern University Can Prepare You for Global Business Management
While certain international factors are beyond an individual organization’s control, you can prepare yourself for the demands of global business management with a Masters in Business Administration from Northeastern University’s D’Amore-McKim School of Business. Northeastern’s MBA curriculum offers in-demand concentrations for graduate students to choose from, including marketing, supply chain management, high technology management, and international management.
In Northeastern’s MBA program, you will gain the skills and expertise to manage an international organization that has resources and operations in multiple countries throughout the globe. The program’s immersive courses allow all students to study topics such as culture’s effect on strategy, structure, and systems, or an exchange rate’s impact on business growth.
With the proper business management and leadership skills acquired through the MBA program, you can increase your likelihood of success in an evolving international climate. To learn more about which MBA program may be right for you, visit our program page.