How Environmental Factors Influence International Communications Strategies

Various environmental factors can influence international communications strategies.  Translation services workers should be as aware of economic, social/cultural and political/legal influences in foreign markets as they are of those in their native or domestic ones.

A nation’s size, per capital income and stage of economic development determine its feasibility as a candidate for international business expansion.  Nations with low per capita incomes may be poor markets for Boston Translation Services but good markets for agricultural hand tools.  These nations cannot afford the technical equipment an industrialized society needs.  Wealthier countries may be prime markets for the products of many US industries, particularly those involving consumer goods and advanced industrial products.

Another economic factor that translation companies must consider is a country’s infrastructure.  Infrastructure refers to a nation’s communication systems (television, radio, print media, telephone service) and energy facilities (power plants, gas and electric utilities).  An inadequate infrastructure may constrain business plans to manufacture, advertise and distribute products and services.  Infrastructure must be evaluated even when considering an international venture in an industrialized nation.  For example, to ensure investment and access to oil producing fields along the west coast of Africa, the governments of several countries hired construction firms to build new roads, housing compounds, power production plants and cellular communication networks for the thousands of new workers and businesses that would be needed to work the wells and move the raw petroleum crude to a port for export.

Changes in exchange rates can also complicate international business that in turn affects the language translation business.  An exchange rate is the price of one nation’s currency in terms of other countries’ currencies; in 1985, for example, $1 could be exchanged for 3.5 German Deutschmarks or about 240 Japanese Yen.  During this period, West German and Japanese consumers and industrial buyers considered Houston Translation Services relatively expensive, while American consumers thought the services provided by foreign translation services firms were attractively priced.  Overseas sales of many U.S. exporters suffered during this period; some firms even withdrew from certain export markets due to lack of sales and profits.  By 1988, the dollar had declined significantly against these and other currencies in the face of huge balance of trade deficits ad world concerns of a possible recession.

Translation and Localization Consulting Firms Discuss Price Planning

There is little likelihood that the marketer will have the option of extending the same price into many foreign nations report financial analysts and translators working for a major economics publication.  These experts state that variations in tariffs, currencies and local competitive prices often mean that the price variable will often change from market to market.  In addition, high inflation exists in some areas of the world.  For instance, inflation in Argentina exceeds and annual rate of 11-percent which makes it among the third highest in the world.  Furthermore, manufacturers may not be able to control the margins and retail prices charged by the middlemen distributing or importing their products. Translation workers at a leading Chicago Translation Services company believe that international monetary exchange rates must be understood as well by translation and localization firms that work with manufacturers who seek to export goods.  Devaluation is a government act that decreases the value of the domestic currency relative to that of foreign currency.

In 1987, the United States dollar was devalued by 24-percet against the Japanese yen.  This action made the American dollar worth less than before, thus raising the cost of goods imported into the United States and decreasing American’s buying power.  However, devaluation made it more attractive for Japanese to import American goods because the yen could buy more American products.

To cope with these factors, the translation and localization consultant needs a full understanding of all of these influences.  Cost-based pricing may be more commonly found overseas because there are so many cost elements, including tariffs, intermediary margins and value added taxes.  However, such is not always the case.  In the past, some manufacturers have attempted to enter a market with a very low price to build market share or to simply get rid of excess inventory.  New York Translation Services that provide localization consulting often discuss dumping.  According to them, dumping is a colorful term describing the practice of pricing products sold in a foreign country for less than their comparable fair market value in the domestic market.  This is often illegal.  It is widely believed that Chinese manufacturers are dumping textile materials and consumer goods such as bags, shoes, men and ladies’ clothing, all types of electronics, phones, and generators into the Nigerian market.  This has greatly weakened the manufacturing economy in Nigeria and its ability to compete.  Research compiled by various economics groups suggest that Chinese products are being heavily subsidized for export into Nigeria.   These subsidies allow Chinese products to be sold at much lower prices than those being produced locally.