Question

List the five reasons companies choose to compete in international markets. Then, describe the pros and cons for the five entry options.

Answer 1

The primary reason companies choose to compete in international markets are:

1. They want to have the market for themselves before their competitors do

Advantage

The actually have a competitive advantage over its competitors

Disadvantage

May incur lose in the process as they are the first to take the risk of going global.

2. The product or service offering of the organization is expanded and actually reaches more people.

Advantage

The product actually reaches to more people and gets established in the global market

Disadvantage

The product may fail and the organization's reputation will be affected throughout the global and domestic market

3. More profit in products depending upon the economy of he nation they are doing business.

Advantage

The organization gets recognition as a brand and earn more profits depending upon the brand

Disadvantage

The organization always will have a huge pressure on them to do good because they know that one failure means that they are out of the competition.

4. The organization can target bulk business

Advantage

More and more products gets sold this way

Disadvantage

May not work out as per our expectation and the organization may experience over stock.

5. The brand value is increased and the organization may be globally accepted as a brand.

Advantage

Once and organization has a global presence it actually helps the organization even in the domestic market as well

Disadvantage

A failure means that the international doors may get closed for the organization and that may even affect the domestic market.