Tell me some reasons why to internationalize.
- Seek opportunities for growth through market diversification
- Earning higher margins and profits
- Gaining new ideas about products, services and business methods
- Better serve key customers that have relocated abroad
- Being closer to supply sources, benefit from global sources advantages
- Gaining access to lower-cost or better-value factors of production
- Develop economies of scale in sourcing, production, marketing and R&D
- Confront international competitors more effectively or to avoid the high competition in the home market
- Invest in potentially rewarding relationships with a foreign partner
Which are the 4 risks in international business
- Country Risks
- Currency (Financial) Risks
- Cross cultural risks
- Commercial risks
Can you specify cross-cultural risks?
- Cultural differences
- Different negotiaton patterns
Can you specify commercial risks?
- Weak partner
- Competitive intensity
- Timing of entry
Can you specify currency (financial) risks?
- Inflationary and transfer pricing
- Foreign taxation
- Losses because of exchange rates
Can you specify country risks?
- Unstable political system
- Unfavourable laws and regulations for foreign firms
- Government intervention