Green Energy and Environmental Services Co. W.L.L: Case Study

Subject: Case Studies
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Introduction

Throughout the globe, small and medium-sized businesses (SMEs) continue to play fundamental roles in economic growth and the provision of employment opportunities. In Qatar for instance, 96% of the country’s private sector businesses are SMEs (Hilmersson et al., 2021). Some of these have good potentials of entering new markets by becoming internationalized. One such company is the Green Energy and Environmental Services Co. W.L.L (GEESC). This is an environmental consultancy company with a keen focus on pre-designing, designing, and managing various projects on all energy, sustainability, and environmental perspectives (Kim, 2018). The company is currently based in Qatar but has the potential to expand its tentacles and operate in countries around the world. Part of the reason for this is that some of the services offered by GEESC are universal and are required in other jurisdictions across the globe.

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The GEESC provides Environmental Impact Assessments, Environmental Surveying, Marine Surveying, Environmental Site Assessment, Environmental Monitoring and Calibration, Environmental Modelling, Environmental Auditing, and Indoor Air Quality Monitoring. Others are Oil Spill Response Consultancy Services & Equipment, Source Emissions, Construction Environmental Management Plans, Waste Treatment and Disposal, and Contaminated Sites Rehabilitation (Hardaker & Zhang, 2021). In the wake of the climate change issue, the environmental consultancy industry continues to grow at exponential rates (Adeola et al., 2018). The need for sustainable development is rapidly gaining tract among many countries in the world. One noticeable trend in today’s building industries is to carry out comprehensive feasibility studies to establish the implications that respective projects would have on the environment. As a result, environmental consultancy companies have continued to emerge to fill this gap.

An environmental feasibility study can only be carried out by trained environmental experts. This implies that for such a company to thrive, it must employ highly qualified specialists whose expertise is recognized globally. Therefore, there is a high threshold in entry requirements for this type of business. Consequently, an environmental consultancy company such as GEESC has huge potentials to grow and become globalized. Indeed, there are various examples of professional firms that have successfully ventured internationally and are succeeded (Triwastuti, 2017). Companies such as Denmark’s Orbicon, the Netherlands’ Lievense, and Australia’s Elton Consulting have expanded their service coverage and global footprints and as a result, raked in new clients (Watson et al., 2018). This is an indication that internalization of business can lead to productivity.

By GEESC going global, it will also benefit from an elevated market position and building relationships with a new set of clients. Consequently, it will register increased revenue. Indeed, some of the leading global environmental firms witnessed a 2.8% revenue increase from 2019 to 2020 despite the global pandemic (She et al., 2020). This is an indication that there are numerous potentials in the global market that the GEESC can leverage if it opts to go global. Incidentally, most of the global environmental consultancy firms are from the West. However, the areas around the gulf experience some massive development projects that require vibrant environmental firms. This provides opportunities for GEESC to begin by considering its regional market first. However, the success of this will be based on several factors that determine the business’ internationalization strategies.

Market Entry Strategies

Globalization is no longer a trend but an important necessity for any business that wishes to remain competitive. There are many opportunities that GEESC will take advantage of if it decides to go global. It will gain access to new markets, expand its networks, and increase its revenue streams. Recent reports have pointed to the fact that 45% of SMEs who have ventured globally make more than 50% of their revenues overseas (Lojacono et al., 2017). GEESC’s performance in its Qatar domestic market is already impressive, implying that it is a step ahead of succeeding even on an international platform. New international customers create unique opportunities for the company to reinvent itself for the task.

GEESC is operating in an industry that requires constant renewal and reinvention. The firm is, thus, required to think globally if it wants to outpace the existing competition within the industry. Its growth strategies should include designing environmentally friendly products, a factor that will significantly boost its international expansion (Hardaker & Zhang, 2021). Several growth opportunities will be achieved if GEESC decides to go global as it will enhance its access for talent and customers.

One of the best strategies for accessing the global talent pool is through internationalization. GEESC will attract and acquire highly skilled personnel who will manage to drive its competency to the next level. Besides, by hiring from the global employment pool, GEESC will be better placed to gain the unique cultural norms of its overseas countries of operations (Glowik, 2020). This is in addition to the fact that most employees from emerging markets are less expensive as compared to those in Western or Middle East markets.

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It can sometimes be hectic for GEESC to find new customers especially with the rapid emergence of new entrants into the field of an environmental consultancy in Qatar. However, this situation could be reversed if the firm considers expanding globally. Additionally, many nations around the world are making efforts to ease the cost of doing business and attract foreign investors into their countries. As a result, there are various forms of incentives available towards the same (Chew et al., 2020). GEESC can take advantage of these incentives and expand its operations globally. An example of such incentives is the reduced taxes levied on international businesses.

It must, however, not be lost to GEESC and any other firm that wants to venture internationally that not all overseas markets are attractive. Similarly, it is not given that all businesses are adequately prepared to pursue global markets. Thus, it will be incumbent upon GEESC to only select markets that will guarantee the success of its forays. In doing so, the company will need to consider economic, social and cultural as well as political factors of its targeted overseas markets (Glowik, 2016). This is in addition to the market attractiveness and its individual capability.

GEESC is a service-oriented company that is primarily focused on offering environmental consultancy. This means that not all countries will be attractive to its activities. Indeed, many countries do not appreciate environmental consciousness and sustainability as important development concepts and will thus not be willing to incur any costs associated with environmental matters. GEESC will, therefore, refrain from entering such markets (Masiero et al., 2017). On the other hand, there are many more countries that prioritize environmental sustainability and have made it a mandatory part of their development initiatives. For these countries, the environment has a different meaning and occupies a central position in decision-making.

Nonetheless, embracing the concept of environmental sustainability alone is not the only consideration that GEESC should rely upon before deciding to go global. It will be important for the company to thoroughly study the economic potential of such countries. There are a lot of countries that claim to pursue environmental ideals but this is just in theory (Boddewyn & Peng, 2021). Once a company commits resources to invest in such countries, the reality dawns on them that the country is complicit in its field of operations. Hence, it will be significant for GEESC to keenly consider the viability of its target overseas market (Glowik, 2016). For instance, expanding to Canada will expose GEESC to a completely different set of the market as compared to moving to Uganda.

It will be significant for GEESC to study such national indices as per capita income and gross national product to give it a true picture of a country’s economic state. However, it will also be imperative for it to obtain data on the number of construction firms willing to incur costs on environmental consultancies. Therefore, in addition to a country’s economic stability and economic conditions, the ability of prospective customers to use the company’s services is also an important consideration.

GEESC’s marketing efforts in new countries can either be facilitated or hindered by cultural differences in such nations. The religion practiced, foods consumed, and languages spoken have huge impacts on the company’s success in new countries. For instance, a significant part of environmental consultancy involves advocating for the protection of spiritual sites and shrines. If GEESC will tailor its activities to reflect the cultural and social norms of its host country, it will most likely succeed in its global business (Glowik, 2016). To effectively adapt to a favorable marketing mix, GEESC marketers must be sensitive to the different socio-cultural settings of their target markets. This might involve completely reinventing its marketing mixes and adapting the host languages.

The GEESC will also find it necessary to understand the attitude of the people and the governments of the host countries it wishes to expand to before it decides to commit its resources there. Some key factors to consider under this include if the country has a history of having a frosty relationship with foreign investments. Countries whose industries are mainly dominated by foreign entities are more likely to rebel against them (Hilmersson et al., 2021). GEESC should not consider such countries as priority investment destinations. Nonetheless, if the markets are irresistibly attractive, the firm can devise ways of getting actively involved in activities that directly benefit local communities.

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Governments that are willing to support foreign investments are known through the provision of incentives and subsidies, streamlined procedures as well as the absence of bureaucratic processes. A country that enjoys political stability helps to encourage foreign companies to positively participate in its development (Schellenberg et al., 2018). GEESC will benefit by making a deliberate decision to access a country’s tax structure and other relevant legal procedures and systems before considering a given country for foreign investments (Paik et al., 2017). Indeed, many foreign businesses are experiencing endless interferences from the governments of host countries.

The GEESC will assess the attractiveness of a foreign market by evaluating its revenue potential, industry dynamics, market accessibility, and competition potential. The profit and revenue capacities of any market can be evaluated by looking at the initial investment level required for launching the operations, the period of gestation, the structure of the industry, and the number of obstacles needed to compete favorably in the market (Watson et al., 2018). These indicators can be found through studying the progress of companies in the same industry or the history of those that left or have thrived in the same market.

A market with rapid growth potential will be attractive to GEESC and justify its significant investments there. Besides, a market that does not have entrenched or with few competitors will be considered ideal by the GEESC. Such a market must also be able to embrace differentiated services such as engineering, physical planning, and building economics (Shen et al., 2017). It must also be noted that there are some countries with very poor terrains and also prone to natural disasters. In such countries, no major infrastructural developments are encouraged. They are, therefore, not ideal for consideration by GEESC.

Market Attractiveness
Competitive Strength High Medium Low
High
Medium
Low

The firm will also need to audit its capabilities and resources before deciding to go global. It must have a solid competitive advantage in terms of technology, manpower, and knowledge of the market. Significantly, GEESC must have specialist environmental experts within its ranks before venturing into foreign markets. It will not make much sense if it will rely on the expertise of foreign environmentalists to head its respective overseas initiatives (Kruesi et al., 2017). This calls for the company to always have employees with extensive global exposure who can guide its foreign incursions.

Theories

The GEESC’s entry into new markets will be guided by some theories and concepts.

The Uppsala Internationalization Process Model

This theory is drawn from the behavioral model of businesses that stipulates that internalization is a gradual process that a business does in bits. The business must first interconnect the foreign markets’ knowledge development and the resources that it possesses. This model is primarily based on two approaches: the psychic distance and the learning process. According to this Uppsala theory, GEESC will have to rely on three stages to successfully execute its internationalization plan. It must begin by acquiring relevant knowledge, then commit to performing the current activities. The market knowledge will help GEESC to make relevant decisions (Sugiyart & Ardyan, 2017). According to this theory, the market knowledge and resource commitment help in influencing engagement decisions and later performances of the business. It is the number of resources that GEESC is willing to commit to its prospective foreign markets that will determine the knowledge level. On the other hand, psychic distances include all those factors that influence the flow of information such as political systems, culture, and language differences. It will be instrumental for GEESC to start its internationalization process with sufficient psychic distance.

Network theory

According to this theory, a company wishing to invest overseas must adequately invest in relationship building. Networks are, thus, significant assets that an organization can leverage to carve a competitive advantage. In GEESC’s case, the best approach towards networking is to identify relevant firms in its intended host country such as real estate, engineering, and government agencies to first institute networks with (Zhao & Priporas, 2017). For instance, by partnering with a leading real estate firm, the company will benefit from knowledge dissemination regarding the relevant codes of practice as well as political and legal situations.

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Innovation Model

This theory stipulates that innovation is the process through which new products are adopted. It maintains that innovation occurs in every step with the number, mechanism, and choice being the only exceptions. There are five stages involved in this theory for it to be actualized. In the first step, GEESC is not interested in exporting its consultancy services and only does so as a response to the commands of the market. In the second stage, GEESC is prepared to respond to the dimensions of the market but makes no efforts in establishing foreign subsidiaries. This possibility occurs in the third stage but is actualized in the fourth stage where the psychological market is also closed. After confirming the possibility of establishing a firm in a foreign country, the company will need to adjust its operations to optimize the processes of the market.

Conclusion

Small and medium-sized companies are mushrooming daily and play a key role in driving up the economies of many countries across the world. As a result of their saturation in small corners of the world, a need arises for some of them to internationalize and seek new markets outside their jurisdictions. Overseas markets present many opportunities for SMEs in terms of accessibility to more customers, exposure to more human capital that can be procured cheaply, and revenue increase. However, as they expand beyond their geographical borders, the firms must do so with carefully planned strategic approaches. Every industry has its unique intricacies that must be individually examined and analyzed before making internalization moves. In addition to scrutinizing these factors, it behooves every firm to also consider the PESTLE analysis, the existing theories about foreign market entry modalities that had been advanced by earlier scholars can also help in providing relevant insights towards the same.

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