Global expansion in the business market is becoming a revolutionary game changer. In today’s modern world, the people are used to having everything at their fingertips, including instant access to international purchases. In order for this to be achieved, businesses need to consider whether or not the transition to a global market is beneficial for their company or not. Of course, global expansion is not the only way for a company to grow. It does, however, allow for the company to increase their market and therefore allow their product to be sold to more people, resulting in higher profits. Naturally, there are many benefits, and drawbacks, to global expansion. This report outlines three major areas of concern for businesses when they decide to expand globally, and discusses the pros and cons of these areas as it pertains to expanding.
Introduction
Overview
Sometimes, business need help deciding whether or not global expansion is something that would benefit their company. The purpose of this report is to outline, in depth, three key components that should be considered when a business is thinking about global expansion. These components include: the cost it would take to expand globally, the effect that the expansion would have on American jobs, and the cultural barriers that the business is likely to face.
Background
Businesses usually begin to consider to expand within the global market, when they are in need of growth and new developments. A company can only grow so large within their domestic area before they need to consider international soils for further growth. The need for growth can occur one of several ways. Usually, it occurs when they are needing a new area to introduce their market, because their current market is already familiar with their products. There are, however, usually some characteristics that the company possesses beforehand, that would make them a good fit to begin thinking about global expansion. These traits include (but are not limited to): possessing an innate global bias, favoring the web, working with the right partners, valuing opportunity, knowing their metrics, taking international strategy seriously, etc. (Kelly, 2015). So what does all of this mean? Basically, if the company possesses these characteristics before they actually expand globally, they then possess the correct foundation to have a higher chance for success within the global market.
Once a company has decided to take the first step in looking into global expansion for their business, they then need to weigh out all of the challenges that they will face and determine whether or not these challenges are beneficial to the company’s risks. This report is choosing to focus on the challenges of cost, cultural barriers, and the effects that the expansion will have on American jobs. These challenges are all going to mean different things for different businesses and it is important that they are each discussed thoroughly, before deciding whether or not global expansion is a good fit for the company.
References
Kelly , N. (2015, March 06). 7 Traits of Companies on the Fast Track to International Growth. Retrieved January 10, 2017, from https://hbr.org/2015/03/7-traits-of-companies-on-the-fast-track-to-international-growth
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