Question

6. The Corporate Planning Department of a US company is considering an international expansion strategy. What factors should this firm’s managers consider when determining the degree of international involvement that would be appropriate? (20 Points)

Answer 1

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The company's managers will consider following considerations before making an international expansion decision:-

Market size to which the organization wishes to appeal. The size of the market is larger, the impact will be greater. For markets with enormous potential, the company can consider opening a fully owned subsidiary or developing strategic partnerships. If the market is small but growing, exports or franchising would be good.

An awareness of the target market by the business and cultural similarities between the home country and the target market.

Favorable conditions that could help establish the company's presence and strategic position. Such incentives can be in the form of economic strategies, business-friendliness, reduced operating costs, and other unique tactical benefits.

Potential risk assessment that a business may encounter. The risks can be in the firmness of the local government's political instability, natural disasters, armed conflicts, lawlessness or uncertain foreign business policies.

The nature of the product and its long-term market demand scenario.