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The reason behind going for international market varies from one company to another.However, most firms pursue internationalization because domestic market has become inadequate because of the economies of scale and multiple opportunities that are available in the foreign markets .There are many entry modes that companies can use to join foreign markets but all these modes can be categorized in two broad modes.
Businesses with overhead costs can have the excess cost cut down in countries that have relatively deflated currencies as well as low cost of living.
Most business in the United States finds it relatively cheaper operating in countries that have free trade arrangement with U. One way in which internationalization help companies reduce the cost of doing is business is through reduced labor costs.
Internationalization is achieved through very different ways .
There are those companies that take part through exporting their products to foreign countries and continue to strengthen their home market.
Companies that are interested in going international usually look for those markets that have a low cost of leaving as that makes it cheaper hiring employees in such countries.
There are those companies that consider going international when in the financial crisis.
Globalization; Internationalization; Franchising; Direct export; Greenfield investment; Adaptation; Licensing Internalization has been of great interest to nearly every company.
There is no single and universally accepted definition of internationalization but from an economics point of view, it is defined as the process where business gets more involved in the international markets.
Some adopt a highly aggressive approach which includes acquiring firms, coming up with alliances, embrace joint venture or just establish their subsidiary.
All these entry strategies differ in regards to the risk associated with each, control, level of resource commitment and return on investment that internationalization promises.