Question

Briefly explain the importance of international expansion as a viable diversification strategy.

Answer 1

Answer 1) Well whenever a company wants to expand its business or grow their market there are two possible options one of the is market penetration which means the company needs to go deep into the market, spread product or services in every corner of the country whereas second one is to make international presence which in other words sound like international expansion. So with this international expansion companies get the opportunity to build a good brand image and a good goodwill in the market. Looking from a viable diversification strategy international expansion is very important because at times it happens when the companies product or service will reach a mature stage in a specific region and in such cases company sales will decline and if looking from a futuristic view the company will not grow so to ponder all these situations companies do international expansion just like what MG Motors, Kia Motors are doing in Indian markets as of now. These companies saw in India there is a gap between SUV’s and compact cars so these companies introduced their Compact SUV’s as their introductory product if they would have done it with sedan or hatchback they would have failed. So if a company is internationally expanding the most important thing from a viable diversification view is to understand and read the market, because without correct diversification from other companies offering it won’t be possible to survive in a market. Along with this viable diversification strategy says that companies diversify from there market because of growth opportunity related to it, companies can grow from billionaire companies to trillionaire companies just by expanding only if a company will stick to one country this might not be possible. The biggest example of this is Samsung and Apple in today’s era theses brands are available in every corner of the world.