International Business & Ethics Flashcards

Drivers of International Expansion (1)

• Increasing Foreign Market Demand:
  • Companies expand internationally to meet customer needs in foreign markets.
  • This can also involve following existing clients as they globalize their operations.
• Seek New Markets & Growth Opportunities:
  • Companies seek new markets when domestic markets become saturated, limiting growth potential.
  • International expansion offers new horizons for business growth.
• Need for Resources:
  • Access to specific resources, materials, or talents not available in the home country drives international expansion.
• Cost Reduction:
  • Lower labor, production, or operational costs in foreign markets can be a strong motivator for international expansion.

Drivers of International Expansion (2)

• Diversification:
  • Diversifying business operations across different regions reduces risk by minimizing reliance on a single market.
• Competitive Pressure:
  • Companies expand internationally to remain competitive, especially if competitors are already benefiting from overseas operations.
• Government Policies & Regulations:
  • Incentives such as tax breaks, grants, and eased regulations offered by foreign governments attract international businesses.

Forces of Globalisation (1)

• Technological Advancements:
  • Advancements in the internet, communication technologies, and transportation facilitate international business operations.
• Liberalization of Trade and Investment:
  • Reduction of trade barriers, tariffs, and restrictions promotes international trade.
• Market Integration:
  • The formation of regional trade blocs and agreements, such as the European Union, simplifies trade among member countries.

Forces of Globalisation (2)

• Convergence of Consumer Demand:
  • Increased consumer awareness of global brands and products leads to similar demand patterns across different regions.
• Global Competition:
  • Companies face competition from both local and international players, intensifying the need to expand globally.
• Mergers and Acquisitions:
  • Global mergers and acquisitions enable companies to quickly establish a presence in foreign markets.
• Economic Factors:
  • Fluctuations in economic conditions across countries drive businesses to seek more stable or lucrative opportunities elsewhere.