Question

Pros and cons of Harley Davidson expanding into the overseas motorcycle market in 2007?

Answer 1

Pros:

• Exposure to products and services in the global market is the most obvious reason for overseas expansion. This is particularly attractive to companies in less developed economies and market sectors that have limited expansion. Regions such as the European Union can offer rapid growth opportunities in the new market with an open market approach towards member countries.

• Opening branches abroad to attract new consumers and build business awareness will improve brand recognition. For example, access to the market, such as the European Union, can lead to a large increase in exposure, especially for established market companies.

• It is a common practice for companies to export manufacturing to countries that have lower costs for work and infrastructure. The US or European company can deliver significant cost savings and efficient pricing of goods, for example, onshore manufacturing of goods in some Asian countries.

• Companies with an established overseas client may wish to establish regional technical and administrative support customer service centers. Setting up a proprietary service center in a foreign region allows an enterprise to overcome the differences in time zones and reduce response delays.

• Various countries provide free trade zones to facilitate investment in transportation, storage, and manufacturing facilities by international companies. For example, the United Arab Emirates has a free trade zone and a corporate-friendly tax system that provides easy access to the Near East, with no prior ownership.

Cons

• Facing immigration rules for long-term jobs, the challenge of setting up a branch, and hiring employees can be overwhelming. Expect rigorous government scrutiny of company registration as well as work permit applications for all managers and employees enrolled.
• In most international markets, such as the European Union or Southeast Asia, cultural and language differences exist in each country and there are distinct, perhaps unknown business laws.
• Entering new markets can be complicated. When it grows in a new market, a company must adapt to the rules of the country and operate accordingly. The rules can vary greatly from your country of origin. Therefore, it is important to work with the right people to ensure that they are compliant and that the right business processes are in place from day one.

• Regardless of whether you want to expand over the long term or test only one area, all prices and expenses need to be planned and that is. Building infrastructure, developing a company, and paying local employees can be very expensive and time-consuming.

  The government of each nation functions differently. You may also have to appoint lawyers, local tax services, and foreign HR consultants to comply legally and in compliance. Furthermore, sustained costs are necessary for the successful operation of the company.