Discuss the primary factors that motivate companies to expand | BA 611 Organization Theory | Campbellsville University

Discuss the primary factors that motivate companies to expand internationally.

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Discuss the primary factors that motivate companies to expand internationally.

1. Culture

The cultural difference can be crucial   to consider when expanding globally. Understanding the culture and it needs come to play when expanding internationally as the businesses cannot ignore the needs to the new market, the community and what they value. It would be neglecting to underestimate the effects of cultural differences. The businesses need to invest a considerate amount of time and energy to pursue an overseas venture to be able to achieve their business goals and get a share in the local market. 

2. Legal and regulatory barriers

Legal and regulatory barriers can be a big barrier for the business who are expanding in international markets. This can be due to the sensitivity of the product that is planned to be served, the regulations of the current government, and the business’s flexibility around navigating around these factors.

It is very crucial to invest time and budget on legal counsel before even planning to expand overseas. It could be seen a costly action; however, it would be more expensive to expand in a new market and not being able to sustain the business. 

3. Foreign government consideration

In addition to legal and regulatory barriers, the economical flexibility and the stability of the local government play a big role in the success of the international business. Here are a few aspects to consider are:

• Currency exchange rates
• Access to needed resources and materials
• Communication and transportation options
• Government assistance programs for businesses
• Immigration and Employment Laws

4. Business case

It is important that the services of the business respond to the challenges of the new market. To be able to make this judgment, here are some of the strategies to consider:

• Perform a market study to understand the market’s personality, economic feasibility, market trends, financial cost patterns, and market forecasts
• Do a financial feasibility study to determine if the move makes financial sense
• Look into Partnership and liaison relationship development to get the know-how on the local market and the consumer behavior

Reference:

Abner, B. (February 2015). 4 considerations before taking your business international. Retrieved from https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2015/02/considerations-for-taking-your-business-global.html