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Companies engage in international for a variety of reasons, but the goal is typically company
growth or expansion. Whether a company hires international employees or searches for new
markets abroad, an international strategy can help diversify and expand a business.
1. any companies look to international markets for growth. Introducing new products
internationally can expand a company's customer base, sales and revenue. For example, after
Coca-Cola dominated the U.S. arket, it expanded their business globally starting in 1926 to
increase sales and profits.
3. Some companies go international to locate resources that are difficult to obtain in their home
markets, or that can be obtained at a better price internationally.
4. Companies go international to broaden their work force and obtain new ideas. A work force
comprised of different backgrounds and cultural differences can bring fresh ideas and concepts
to help a company grow. For example, IB actively recruits individuals from diverse
backgrounds because it believes it's a competitive advantage that drives innovation and
benefits customers.
for example when Honda set up shop in Ohio, some other Japanese auto parts
companies also moved to Ohio to continue supplying Honda
some Asian companies (selling in to the U.S. market) have moved manufacturing
and assembly operations from the southern U.S. to exico where pollution and
labour regulations are not so restrictive as in the U.S.
costs of production at home increase, forcing the company to find a cheaper place to
produce
a chance occurrence
sometimes a company goes international for the most simple reason, the CEO went
some place on vacation and thought it would be a good place to do business, or a
friend made a suggestion to a senior executive about an opportunity, so the
company seizes on it to do something
you would be surprised how often it is chance occurrence that causes someone to
get on a airplane and go somewhere - and, keep in mind, most int'l business is done
by companies with less than 50 people
Companies who are proactive in international business are, in most cases, better positioned than
companies that simply react. If you simply react you might make a mistake and not do things
properly because you are stressed for time, money or manpower.
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access to resources which may save on shipping or processing costs
producing inside newly created political or regulatory boundaries (such as free-
trade zones or multi-lateral groupings of countries like the EU or ASEAN)
a launch an offensive into a new market before competitor does (eg. like -epsi into Russia,
before Coke)
a incentives
sometimes the host government will offer special tax breaks to entice an investment
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