International Business Expansion

International Business Expansion

Robert R. Cannon Jr

Argosy University

ENG101 BLC –  Composition I

August 12, 2016

Owning a business these days is not an easy thing to do. In order to run a company there are a lot of things that must be known and a lot of things that must be considered. One of these things is whether or not to take a company overseas or to stay local. Is it better for a company to expand rather than stay local? Some would say yes, others would say no, but in all actuality it is absolutely better for a company to expand rather than to stay local. There are many reasons why a company should broaden its customer base and expand not only within its own country but internationally. The main reasons why a company must expand internationally are for the economic benefits, the ability to learn from market leaders in their industry, and the ability to help support a foreign country.

        Amazingly, current projections suggest that, within a few years, the total dollar value of trade across national borders will be greater than the total dollar value of trade within all of the world’s countries combined (Creative Commons, 2012).  Given this projection it is safe to say that no matter the size of the business, big or small, every company in the world is affected by international trade. So whether a business is thinking about going international or they have no ambitions to do so, they are expanding internationally without thinking about it. By selling product that are made out of this country or the country in which the business is located, that business is broadening its reaches and customer base, and is being affected by international business.

        The key to a successful business is making the decision to expand internationally.  So, the decision to internationalize a business in a certain country is of strategic importance and should be developed following a thorough study of all the factors that can influence the activity of the company and the risks to which it is subject. (Militaru and Zanfir, 2014). There are many factors in which one must look at when deciding to internationalize a business, and those factors contain mostly benefits.

        Economically speaking, the decision to internationalize a business is one that, once made by company management, can be a very beneficial one. Although the United States enjoys the largest economy in the world, it accounts for only about 5 percent of the world’s population, and Selling goods and services to the other 95 percent of people on the planet can be very appealing, especially for companies whose industry within their home market are saturated (Creative Commons, 2012). By expanding a business internationally, that business is opening up to a larger customer base, which in turn is opening up that business to higher sales of products or services in which it produces. Those products or services in which the company sells may be set at a certain price in the United States, but in other countries the export markets are not as competitive and the prices that are set in the United States do not apply to those other countries, which in turn brings the business higher profits.