Virtual Corporations and International Marketing Strategy

Introduction to Virtual and Hollow Corporations

One of the fastest growing and most profitable investment opportunities open to international entrepreneurs today is the possibility of constructing entities known as virtual corporations or hollow corporations. Such companies are designed to capitalize on outsourcers' points of leverage in order to achieve greater efficiencies, lower costs, and access to resources, thereby increasing one's own competitive advantage. In other words, by constructing a hollow corporation and exploiting proximity to particular goods, an entrepreneur can act as an effective middleperson or distribution center without requiring substantial capital investment.

These are usually goods desired in another area of the world that are plentiful near one's own location but scarce elsewhere. Of course, the reverse is also true: one can import goods from abroad with the intent of facilitating their distribution to a section of one's own country where they are in short supply. Virtual corporations of this kind are structured specifically to exploit geographic and economic asymmetries in global supply and demand.

The Internet as a Global Marketing Tool

The Internet has made such hollow corporations — primarily constructed with the intention of importing and exporting goods — both easier to set up and far less expensive to advertise and promote. The Internet has also enabled these corporations to become more globally oriented. However, when setting up a company designed to market goods internationally through the Internet, a potential businessperson must keep several factors under constant consideration.

The simple use of the Internet can and will provide a low-cost opportunity for global advertising. But there must always be an acknowledgement that the regulations pertaining to different countries vary significantly. Despite the many individuals who might have access to knowledge through the Internet, not all will provide an entrepreneur of a virtual corporation with a viable market. The Internet's potential fluidity of information can therefore pose a danger as well as a boon, as agreements have the potential of being entered into too quickly. Ultimately, the potential investor must keep a cool head in the face of heightened opportunity. Additionally, individuals with whom one does business must be verified as reliable and trustworthy — something that is often difficult to accomplish across international distances.

Market Research and Competitive Analysis

A potential international marketer must survey similar companies in existence both on the Internet and outside of the World Wide Web. This must be done with an eye toward ensuring that the marketer is fulfilling an unmet need to import or export goods. Or, if a need is in fact being met by potential competitors, the goods being transmitted ought not to be priced at a rate that is less competitive than what the marketer is prepared to offer at the outset.

Can the goods this potential marketer is considering brokering find a market, and what sort of audience will those goods be targeted at? How much will it cost to target a particular country, and will international shipping rates not detract from the bottom line? The potential market for goods is critical because it must be assured that there is a stable demand for the product, or that such a demand can be generated over time. To determine this, the businessperson must have a thorough knowledge of the market that exists internationally for the particular goods he or she will be dealing with. Understanding international trade dynamics is therefore an essential prerequisite for any entrepreneur considering this model.