Global Expansion

Global Expansion

Juanna Stafford

American InterContinental University

MGMT 405
Individual Project 1

                                        Abstract

When planning to globally expand a business you may encounter many issues. Some issues maybe political and some may economic.  In this paper I will be discussing how these issues affect the expansion of a business globally.  I also will explain the importance of and implications of each issue with as the company propose to expand to France. Then I will discuss how other companies have handled expansion issues.

                                        Global Expansion

        When a company is seeking to expand globally and increase their trade, they must understand that there certain challenges involved. Some issues can be economic, political, social, or cultural. In order to ensure that the expansion of the company will be beneficial, they must understand the overall growth opportunities involved such as profitability, innovation, and human resources.

        Many companies are opposed to current business practices such as outsourcing and several of other international business practices.  They believe that by expanding your business to international locations, you lose focus of the goals set in place for their home location. Also for political reasons, when companies begin trading in other countries they lose their customer base. In the past companies that have been involved with human rights abuse have received a large amount of bad publicity and in worst cases lost business. They will also need to be familiar with the country labour laws so that they can build a strong labour force. They will need to be knowledgeable of the language of potential language barriers, so getting translators who can effectively communicate with members of the team is very important.  The culture of the country will also have a great impact on the growth and development of the paint business because of the competition face in the new environment.

        When it comes to economic issues, it’s important for any business who is seeking to globally expand to discuss their expectations for human resources and their skills. They need to be thoroughly trained and knowledgeable about what it takes to manufacture the goods or/ services for the business. These types of training will take time and money to locate individuals who will take the company to the next level. When conducting trade internationally you must be familiar with their trade laws and additional financial responsibilities such as taxes.  Understanding the international legal complexities can be very difficult. To ensure that the business is being compliant, you’ll need to ensure that you seek proper legal advice to avoid paying any fines or penalties. Overseas tax rates and tariff on imports and exports can be high. So they will need to account for these extra costs when budgeting for the expansion.