Question

Choose an organization/company that does not currently do business globally (outside of their home country).

What opportunities would international expansion give this organization?

List 2 – 3 strategies the organization might use and analyze the benefits and risks associated with each strategy.

Justify, why in your opinion, international expansion is or is not a viable strategy for them.

Answer 1

A company that I have selected is ‘Bridgepoint Education Inc.”. The company is in the business of providing innovative solutions for students that will advance their learning and re-engineer their learning experience altogether. The company owns two universities – Ashford University and University of the Rockies. The company does not do any business outside USA.

International expansion would provide several opportunities for this company. First of all the company will be able to access new markets. International expansion will allow Bridgepoint Education to enter new territories and reach more consumers. This will help them to expand their top-line as well as bottom-line in the long run and add more value for the stakeholders. Secondly the company will be diversify and hence de-risk its business model.

The strategies that Bridgepoint Education can use are making a Greenfield investment and by going in for a horizontal investment in the form of a merger and acquisition. The benefit of Greenfield investment is that it will enable the company to expand its capacity. The company can start new universities in different countries. The risk is that Greenfield investments have high gestation period and can lead to cost overruns.

The second strategy is to go for a horizontal investment in the form of a merger and acquisition. Bridgepoint Education can acquire and buy other companies in this field to augment their competitive strength. The risk associated with this strategy is that an acquisition can fail in some cases and this may dilute the brand equity of Bridgepoint Education.

In my opinion international expansion is a viable strategy for Bridgepoint Education. This is because the education market across the globe is a thriving market and in fact is the only business that is insulated from the economic conditions of boom or recession.