Question

The decision to globalize operations is very complex and not without risks. Choose a company that has not yet globalized and answer the following:

• Describe how would you decide if the best option was to expand globally
• Analyze the benefits and risks of globalizing for the company you chose.

Answer 1

Solution:

We consider the example of a company called Flipkart which is owned by Walmart. The company is not yet globalized and operates in a single market, which is the Indian market. The company is the largest e-commerce company in the Indian market and competes for the neck to neck with Amazon India. Let us look at the outlook if Flipkart decides to expand beyond the Indian market and globalize their operations.

The decision to expand globally can come after a detailed assessment of the company. To expand globally the very first thing we need is a lucrative market for our business. Hence, the company will first need to find a lucrative market for their business and then move further in the assessment. If the company has a target international market then we must assess the company for the required capital and resources for expanding the operations internationally. Also, the company should have supply chain capabilities to meet the demand in foreignmarket and be able to serve the consumers in foreignmarkt effectively without droping their quality standards. Also, the market potential of the foreign market is very much essential to understand before expanding globally.

The benefits of expanding globally outweigh the risks associated. There are several risks associated with expanding globally but we do have an oportunity to assess the risk and then choose to decide on expanding globally. Hence, the risk, however big is controllable and hence the businesses offten take the risks to expand globally because the benefits are huge such as increased revenues and profits, increased brand awareness, wider scope of business, iverall diversification of the busines sover multiple different market. These are some of the crucial benefits of expanding the business globally.

Hene, these are the benefits and risks associated with expanding the business globally.