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ASSIGMENT # 1
ZOHAIB JAVED SATTI
MBA-7
Why companies want to be a global ?
MORE CUSTOMERS.
Likewise, a small home market usually means customers are short
supply. Which in turn affects
a companys potential for growth. Simple math here really: Bigger
market = more customers.
The United States has roughly 4% of the Worlds population (and
itsshrinking every day). Indiahas 17%, China has 19%, and Southeast
Asia as whole has 9% (these are all growing every day).
ACCESS TO A LARGER TALENT POOL.
Steve Jobs told President Obama that he needed 30,000 skilled
engineers but he couldnt findthat many in the U.S. When you expand
internationally youll have access to greater numbers of
highly educated professionals, skilled workers, and unskilled
laborers.
MORE PROFITS.
Not only will you increase the number of potential consumers of
your product or service, but you
may also be able to extract higher margins. When exporting
products your costs will
undoubtedly change, but its been shown thatconsumers in
developing countries will pay-up foraccess to high-quality and
well-branded products.
RESOURCES
Some companies go international to locate resources that are
difficult to obtain in their home
markets, or that can be obtained at a better price
internationally.MORE EFFICIENT.
Its no secret thateconomies of scale are what made the largest
companies of this erathink
Walmart and Apple. When you increase your output via
international expansion, you can oftendo so with lower variable
costs.
The importance of this is three-fold:
o You can increase your margins
o You can offset exporting costs with your decreased production
costs
o
You can keep your prices more competitive in your home
country
faster and create better products.
Exporting your products will instantly expose them to consumers
with different tastes, opinions,
and ways of interacting with the world around them. The
knowledge gained will serve your
company welleither by providing new insights about your current
domestic offerings
or sparking ideas for new products that can serve both
markets.
http://articles.businessinsider.com/2011-10-24/tech/30315512_1_obama-administration-president-barack-obama-manufacturing-engineershttp://www.liefinternational.com/blog/international-marketing/quality-vs-cost-in-developing-countries/http://dividendmonk.com/7-companies-with-unrivaled-economies-of-scale/http://dividendmonk.com/7-companies-with-unrivaled-economies-of-scale/http://www.liefinternational.com/blog/international-marketing/quality-vs-cost-in-developing-countries/http://articles.businessinsider.com/2011-10-24/tech/30315512_1_obama-administration-president-barack-obama-manufacturing-engineers
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DIVERSIFICATION
Some companies go international to diversify. Selling products
and services in multiple countries
reduces the company's exposure to possible economic and
political instability in a single country.
ITS THE FUTURE
International expansion will soon be standard operating
procedure for all but the smallest of
ventures.15 years ago it was the rare, forward-thinking company
that had an online presence. It
was unheard of for all but the largest companies to sell
products online. Now almost every
company has some kind of online store.
First-mover Advantage
The first-mover advantage is basically getting into a market and
gaining all the benefits of being
first. For instance, youll able toquickly gain traction in a new
market by being first. Anotherbenefit is youll get early adopters
on board easier since theres no one else competing for their
attention.
Small Home Market
Finland for example is a small country with a population of
approximately 5.5 million. And
while it has experienced great success with games like Clash of
Clans and Angry Birds
