4.6 Entering & Operating Internationally

Why consider infrastructure before entering a foreign market?

• Includes roads, transport + communication

• Good infrastructure → easier production/distribution

• → lower costs + easier delivery

• → potentially higher sales

Why consider ease of doing business?

• Rules/regulations may make establishing a business difficult

• Consider credit, property registration + contract enforcement

• Difficult setup → operational delays → delayed sales

Why consider disposable income when entering a country?

• Higher disposable income → greater purchasing ability → likely more sales

• Lower income → potentially slower sales growth

• Consider income trends to assess future growth

How can exchange rates affect international operations?

• Exchange rates can fluctuate significantly

• Stronger currency → imports cheaper

• But exports more expensive for foreign customers

• Businesses should consider historical currency trends

Why consider political stability before entering a market?

• Instability → corruption/lack of law enforcement/crime

• Can cause disruption to trade

• → greater investment risk

• Stable government/economy → generally lower risk