International Strategy.

Nowadays, companies want to expand as much as possible. This is shown by the increases in the number of product lines, and the expansion to new geographical markets. However, does it really make the company better off to expand? In other words, is a bigger company a better company? The concept of economies of scale plays an important role in answering this question. Economies of scale is “the effect on average costs of production of different rates of output, per unit of time, of a given commodity, when all possible adaptations have been carried out to make production at each scale as efficient as possible” (Silberston, 1972). Consequently, the higher the output, the lower average costs per product. However, does this reduction in average costs make the company a better company?

In industries that are capital and research intensive such as the computer industry, efficiency requires large if not very large-scale operation. For such industries, the main source of scale economies is new product development costs or new, cheaper ways of production costs; spreading those huge costs over an increased number of units result in increased efficiency and in the end lower costs for end users/consumers.

With the global trade network more integrated, according to Pearce and Robinson (2009), firms tend to enter foreign market to gain more profit due to the maturity of domestic market, excess capability, and potential purchasing power in foreign market. Therefore, as a firm has already achieved success in its domestic country it might consider enter a new market. Before it operates in a new market, it has to consider

There is a tendency for international corporate-level strategies to be substituted for global marketing strategies; namely, multi-domestic strategy to concentrated marketing, global strategy to standardized marketing, and transnational strategy to differentiated marketing. However, the borderline lies as the former focuses broadly on firm’s operations while the latter narrowly involves factors within the marketing mix that directly influences the customer behavior. Although this distinction is used to promote accuracy across the paper, there will be

The Rapid Change of International Business is international transactions that have substantial operations in more than one country. International exposure and experience allow companies to build a brand in other markets, cultures, and customs. The globalization of International Business are direct investments to export and import goods, foreign, domestic control and to advance competition with other companies. International business gives employees opportunities to broaden their horizons to consider learning the business from a foreign point of view through technology, cost, and political resources from a foreign point of view (Bethel, 2011).

Before making an international move, though, it is of benefit to figure out commonplace reasoning companies infiltrate the international business field. Sodden Domestic Corporation leaves limited opportunities for organisations to snap up applicants. This drives them to look abroad for advanced consumers and markets. For example, establishing countries can offer an abundant opportunity for new revenue causes. Discovering resources or constitute partnership

According to Isobele (2008), in the book, International Marketing Strategy, International Marketing is defined as the movement of a firm’s marketing strategy that uses one or more marketing mix decisions across national boundaries. It involves the firm in establishing manufacturing or production facilities around the world and coordinating marketing strategies across the globe. Where the marketing activities of an organization include activities, interests or operations in more than one country and where there is some kind of influence or control of marketing activities from outside the country in which the goods or services will actually be sold. Sometimes markets are typically perceived to be independent and a profit center in their own

Global business is especially complex due to the the globalization of markets. There are significant cultural differences between countries and regions, sometimes there are even multiple cultures in a single country. However, businesses must learn new innovative ways to transcend distance and culture because if they do not their corporations will never grow. Expanding to foreign countries can provide a business with millions of new customers. In order to increase business, businesses must globalize. Luckily enough, this is becoming easier since trade barriers are starting to dissolve and communication to most parts of the world today are basically instantaneous. There are many ways a company can decide to expand internationally. One of

This report aims at providing an overview to the challenges posed to organizations that are intending to extend their operations into both the regional and global markets. A major reason why most organizations fail in the pursuit of globalization is not necessarily due to the strong competition experienced by other established multinationals but rather the lack of foresight on the bottlenecks present in participating within these markets. As such, they fail to incorporate means of solving or going around such

External economies of scale occur when the cost per unit depends on the size of the industry but not necessarily the size of an individual firm (Krugman et al, 2015) they are most likely to arise when firms operate in the same region.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

International market entry is important because it enables an organization to increase its output and attract new customers. By expanding the customer base and the scale of production, the business will be able to achieve economies of scale. That is, the organization can be able to reduce the average cost per unit of production when the level of output is substantially increased (Stephan and Roin 28). After international expansion, cost advantages and higher profit be obtained through bulk purchasing, enjoying high turnover rate and paying lower interest rates on loans.

It can pass the costs of R & D and production costs over a larger volume of production and thereby reduce the unit cost total. The global scale permits huge economies as the benefits of scale taken from the experience in one market are developed in others.

Managers are looking to globalize operations, developing new markets for their products for better strategic business outcomes. Consumers have better access to a greater variety of goods and services and competition to reach to the new markets with the right product is getting stronger among businesses. Globalization also gives businesses better access to a global workforce, enables them to tap into international raw materials and financial resources. As the world economy is fast becoming a single interdependent system, businesses have competitors, customers, employees from anywhere in the world.

In today’s world there is a widespread trend of global expansion, the borders between markets have become more and more diffused. The number of firms expanding abroad is increasing and internationalization has become a necessity, not only to further a firm’s growth, but also to better handle international competition in its home market.