April jointly took a 30% stake in Japan Telecom(Weber 1). Concert never met the financial expectations of either company and incurred more debt than anticipated. They posted operating losses of $800 million annually over the past few years(Pappalardo 1). But mounting losses and dropping sales caused each company to search for a way to end the venture. So in October 2001, they finally pulled the plug on Concert. With few exceptions, each company is taking back the assets it brought to the venture. AT&T is keeping the Concert frame relay in Asia, and it's also taking over BT's interest in AT&T Canada(Pappalardo 1). AT&T is forgiving a $200 million loan it made to BT and is assuming BT's debt in the Canadian division. BT will retain its customers and networks in Europe and the UK. Concert customers will be transferred to either AT&T or BT, but they won't see to many changes.There are many early warning signs for when a company is experiencing difficulties. A decline in sales, lower profit margins, sustained losses, increased debt, a highly leveraged balanced sheet, negative working capital and reduced cash flow are overt signals of financial distress(Zwaig 1). Concert had many of these warning signs but continued to conduct business. Primarily two problems hamper companies. The first is inexperience. Companies going global face the problem of "unknown unknowns"-they don't know what they don't know. Any one or more of numerous differences in international markets can trip them up. Second, being typically smaller firms, perhaps in the $50 million to $250 million range in annual revenues, they lack the resources to deal properly with potential problems(Monti 1).One way to succeed in international business is to start out with a strong competitive advantage, such as loyal customers, superior products or services, more effective business systems, assets and resources, partners, and so on. The company can then use these as an a...
