Question

It can be said that global expansion does hold value as a corporate business strategy for many reasons. One reason that was outlined in the article Foreign entry, cultural barriers and learning was the ability to take advantage of lower labor costs while exploiting the same experiences along different cultural business parameters (Barkema, Bell and Pennings, 1996). Although there are cultural differences that can result in a cost to the company, there are more benefits to utilizing similar business strategies that work in a foreign nation. Another benefit to global expansion as a business strategy is that it leads to a lower resource commitment (Gollnhofer & Turkina, 2015). Sometimes due to the risk of global expansion, businesses will choose to keep their higher resource commitment, but companies that have chosen to expand have been able to see benefit using this method.

One of the barriers that presents the most difficulty on foreign trade are tariffs, which affect all businesses no matter the size (Fliess & Busquets, 2006). To overcome these barriers, a SME would need to invest much time and be fully committed, which can be a deterrent for many. Another barrier is that countries tend to give more protections to large corporations as opposed to smaller business because they are viewed as more significant and have more political power (Lee & Swagel, 1997). This could present difficulty for businesses when considering global expansion. Knowing that their product or service will not be priority ahead of time could discourage a business when considering expanding their products or services globally. Other barriers would be items like foreign customs procedures and being mindful of various regulations that are imposed on trade.

OPEN A DISCUSSION FROM THIS ASK QUESTIONS AS WELL.

Answer 1

Global expansion as said in article above sunmarizes factors which affect this strategy like tarriffs and customs and political power used by large corporation to manoeuvre and navigate protectionism policies by foreign countries .

However small firms face major wrath of such framework.

The article however does not cover other major external factors which hinder global expansion and some of these include :

1. Ecosystem and technology development being low
2. Stringent FDI and Corporate Taxation laws
3. Retrospective Taxation and High Compliance costs
4. Multiple approvals for Mergers and Acquisition
5. Stringent exit barriers.

The article also must discover various other questions which form the base for investment decisions as follows:

1. How to enhance global expansion of startups in emerging economies?
2. How to streamline and converge accounting standards when expansion takes place?