Book Report on "Xero Is an Online Accounting"

Book Report 10 pages (3409 words) Sources: 20

[EXCERPT] . . . .

Notably, this service is free, and was strategic because the company was aiming at responding to the vast consumer demands. The free service releases millions of small businesses and accounting experts from the confines of desktop accounting. In addition, it allows the consumers to migrate data from QuickBooks into Xero's cloud. This migration of data allows the consumers to easily transfer, promptly access, and manage large amounts of disparate finance data from a browser. In addition to an earlier argument, the Xero Payroll will make it easy for the customers to automate tax calculations, direct deposit, employee access options, and an electronic tax filing part (Bloomberg, 2014).

Managing Operations

Initially, the company had a handful of employees, which translated to negligent growth of the company because it had only 3,000 consumers. Therefore, the company had to re-look the way it carried out its operations. In addition, this called for shaping of the company's strategies, and it developed a platform where the consumers would communicate with accounting experts. This was an important strategy in managing the online operations because some customers will need support (Smith, 2013). Nevertheless, in an event a new customer was not proficient in using the accounting software or the customer had experienced some difficulties while using the software, they would inquire from the experts, through the online platform.

Most importantly, most of the company's experts were majorly accountants, who do not have essential managing skills. Therefore, the management opted to educate, recruit the accountants to gain proficiency on management issues. In addition, the company has hired experts who interact with customers to increase their book keeping efficiency, as an effort to manage their business operations. In addition, the corporation is in the course of developing a Small Business Advisory Group, which will help the company transform, and achieve sustainability through managing substantial operations. In addition, the company has a support team, management and a R&D team (Plenert, 2002), which are safe for investors that can execute many operations, which will help in the growth of the company.

Similar to other companies, the company has a hierarchical system of governance composed of a board of governors, directors, board members, and employees. The board is the final body, which is accountable for all choices made in the business. On the other hand, directors are responsible for keeping all the financial documents, which outline the financial position of the company. They also defend the assets of the company. Most importantly, the company has a set of rules, ethics and regulations, which the employees must follow, and work in accordance to the ethics. The chief executive is accountable for the high standards of conduct, although the firm does not have an official set of codes. Owing to this, all the stakeholders take part in managing the operations of the company (Xero, 2012).

Internationalization

The terms internationalization and globalization describe the change that occurs in the global political, social and economical context. In addition, the advancement in technology has led to a case where the globe is merging at a gradual pace. The internet has led to fast communications across the globe (IBS, 1976). This has led to development of the economy, which has separated the globe along economical lines (Reid, 1983). At some point in time, every company must face internalization. This may occur through many ways such as global mergers (Johnason & Vahlne, 1977), acquisitions and extending markets in an attempt to expand the global operations from local to a global level. Internationalization process has substantial advantages. However, in order to achieve internationalization, web-based firms face substantial challenges, which might serve as barriers to achieve global success.

Xero is a web-based company, and consumers expect it to launch an online international shop from its inception. This is so because the objective of Xero is to realize a substantial amount of audience through its only service channel, the online platform (internet). In addition, as global operations grow, and as interaction with clients intensifies, the company recognizes that it can expand its market via intermediaries. The intermediaries may serve as trust facilitators, content filters, translators and mechanisms for disseminating information. In order to achieve the aim of reaching a large audience, Xero has a peer-reviewed informative website, which has an enabled web-based communications, which further serves as a promotional tool rather as a means to generate revenue.

Issues in internationalization

Product Policy

Internationalization aims at reaching a large global audience, and the success of the product in such a target market requires the company to form a unique product policy. In this case, the firm should examine the essential features of the products and ensure that the features can meet the demands of the customers at a global scale (Grafers and Schlich, 2006). The Xero accounting software, initially had 3,000 users, but after some years, the mark had hit the 157,000 user's mark. This is a positive aspect and it shows that the software can reach a global scale.

In addition, the software has unique and customized features, which users find efficient in delivering the accounting objective. A typical example is the QuickBooks (R), which is the first ever feature developed in the software market, and its work is conversion. This feature allows users to migrate data, and manage large amounts of disparate finance data. However, there is a potential threat from new entrants, who might come up with advanced software with advanced features, which might have a good competitive advantage over Xero.

Company size and organization

There is a common perception that large companies have substantial resources (Barney, 1991). However, in practice, this does not mean that they would perform in international operations, when compared to small and developing companies (Bonaccorsi, 1993). Currently, companies are embarking into foreign global markets, especially for companies, for instance, Xero that deal with technological products. However, issues such as free trade agreements and creation of new information technologies have the capacity to decrease the significance of company size in the global market. Nevertheless, the quest to seek opportunities in the global market can become a significant challenge for Xero, mainly because it has not developed a global network.

Most importantly, the organization plays a crucial role in the success of international business operations. This is because if a company structures the firm in a way, which does not suit its business processes, it is possible that the company will not achieve internationalization. Notably, flexibility and encouragement for the employees are essential features that an organization needs in order to succeed in various types of markets. In the case of Xero, the organization follows a hierarchical approach, which prior studies suggest that they are not suitable for web-based organizations. Owing to this, Xero might fail to achieve the global market audience, unless the company adopts a process-based organization (Harris and Moran, 1996).

Financing Internationalization

The challenges of financing internationalization rely on the company's resources. The big firms are in good positions when attempting to finance internationalization. However, for a small firm, the negotiations for obtaining support may demand for substantial hard work. In addition, the entry mode and level of commitment to internationalization has the influence on the company in an attempt to finance internationalization (Barney, 1991). Nevertheless, foreign direct investment can influence the efforts to finance internationalization. Most importantly, Xero is a growing company, but the firm is yet to reach a level where it can build physical branches all over the world. The firm can achieve this if it merges, or takes part in direct investments, which will help the firm gain enough revenues to finance internationalization (Shapiro, 1999).

Conclusion

Xero is an online company, which offers software in the field of accounting. The company has showed great progress, and in future, it will develop into a world leader. Most importantly, the company has advanced its software by adding unique features, which will help the company to achieve internationalization. The company performs its business functions via certified accountants, joint ventures, but most importantly, through its support team. However, some of the issues that may hinder the success of the company include the threat of new entrants, who might come up with new accounting software, with customized features that may surpass Xero's software.

Nevertheless, the company is showing potential to become a global leader because in its annual reports, the company is making substantial revenue from the product. There are many positive reviews concerning the online accounting software provider, it is apparent that many customers find the software efficient and easy to use. There is no instance of fraud reported by customers, which is a positive move into attracting potential consumers and increasing the customer's loyalty. It is not yet clear whether its conclusive that the company has a comparative advantage, in the context of producing accounting software, but it is conclusive that the trend the company exhibits is one that will lead to growth of the company.

Most importantly, online-based companies employ innovative business… READ MORE

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