Question

1 Show the main variables that a company should consider when deciding whether to expand abroad and where to do so. We provide specific examples of a company you know that is still local or national and which country or countries could expand.

Answer 1

Ans: Following are the main variables that a company should consider when deciding whether to expand abroad and where to do so:

1. Legal and regulatory barriers: For conducting business in foreign markets it is mandatory to look into local laws and regulatory guidelines.
2. Foreign govt. stability: The stability of the local govt. and its authority is very important for eg. Need to review currency exchange rates, access to needed resources and materials, communication and transportation network, Govt. policies, access to capital, employment laws, and tax laws.
3. Economic condition: It is essential that the local country's economic stability should be maintained in order to expand business in a foreign country.
4. Market scenario: Perform a market study to understand the market's personality, economic feasibility, market trends, financial cost patterns, and market forecasts.
5. Need to review Intellectual property rights and trademark protection laws in a foreign country in order to recognize and protect the business proprietary needs.
6. Culture: It is very important for the business to understand the local culture so that it can serve its products and services as per the needs and desires of society. The understanding local market is extremely important for overseas business.
7. Labour laws: it should be flexible and skilled, semi-skilled labor should be available.

Example :

Like, Green toys company has a local company in the US It cares about raising sustainability and manufactures 100% recycled materials and toys. All Green Toys products are packaged in recyclable cardboard. Now if this company wants to expand its presence in foreign markets It should focus on the above factors to make it successful worldwide.