Question

You have been asked whether your organization should expand from selling its products only in North America to selling its products in Europe as well. What information would you want to collect? Who would you want to discuss the idea with before making a decision?

Answer 1

Following information will be of use in determining whether the organisation should remain confined to the North America or expand to Europe.

(i) The demand of company's products in Europe. There must be a sizable and sustainable demand.

(ii) Cost of expanding to the Europe. Whether or not the company has the resources and capailities to serve the Europen customers just as they do it in America. They should be able to do it on sustainable basis.

(iii) Feasibility of venture. Does it make economic sense to sell in Europe. How is the competitive scenario and strength of competitors. Do the company has a strategic competitive advantage over them. Are the governments' policies favourable for those products.

(iv) Nature of products. Is there a stable and consistent demand. How the future holds for them.

(v) Inherent risks involved in the process. Has the company got enough buffer to deal with those risks.

(vi) Cultural compatibility between the two markets and their influence on future sales potential.

The idea must be discussed with the head of the international business division, who would be able to tell more about feasibility, head of operations, who is in better position to tell about operational capabilities and head of strategy, who will be able to tell more about the current strategic issues with the company and whether it is the right time to go ahead with such change.