The Borderfree Option: Going Global Electronic commerce is changing the way comp

Question

The Borderfree Option: Going Global   

Electronic commerce is changing the way companies around the world do business. The Internet has opened up a whole new era of business opportunities, making virtual information, on any product from virtually any market accessible readily and inexpensively. Now, opening a website, whether you like it or not, means you are global. Consumers from anywhere and everywhere can go to your website and, when there, do business. Done well, enterprising companies can leverage cross-border e-commerce into powerful international expansion. Done poorly, a retailer wastes energy, effort, and equity.

Founded in 1999, Borderfree is headquartered in New York City. It has offices in Dublin, London, Tel Aviv, Toronto, and Shanghai. From these, Borderfree helps more than 200 retailers—such as Neiman Marcus, Lands’ End, and Harrods—conduct cross-border online sales in more than 220 countries that are transacted in 74 currencies. Borderfree, by linking customers and companies through tap-web and mobile platforms, helps consumers worldwide shop across geographies and devices while enabling companies to leverage their brand, inventory, and expertise. In 2014, Borderfree generated more than $125 million in revenue. It is paid by its clients based on a percentage of sales, generally up to 12 percent, that take place on Borderfree’s platform.

Questions - *must include a journal citation for each question*

1- What mix of ownership, location, and internalization advantages would encourage a company to hire Borderfree?

2- Borderfree’s clients expect it to be knowledgeable about the key markets in which they operate and to be able to advise on how to prioritize, budget, and compete. How does Borderfree make that happen?

3- Borderfree promises to help its partners drive international growth. What sorts of marketing and sales techniques help it do so?

Explanation / Answer

1. A company can be encouraged to hire Borderfree if it is offered the following mix of ownership, location and internalization advantages:

Ownership advantage: comparatively lower cost of operating business in the international market, efficient transportation systems, and better coordination of assets

Location advantage: proximity to geography and culture, larger size of market, and low operational cost in terms of land and manpower.

Internalization advantage: Borderfree provides the ability of operating wholly owned subsidiary to the company. Besides, the firm can internalize its trade secrets to get protection from market failures.

2. Clients of the company expects Borderfree to have knowledgeable about the key markets and wants advice in terms of budget, prioritization, and competing strategy. Borderfree can make that happen with the help of eMarketers who keep the company updated about the global trends, consumption patterns, and customer preferences across the countries in which it operates its businesses.

3. Marketing and sales techniques that enables Borderfree to help its partners drive international growth:

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