The Process of Expanding a Business into a New Region #2 - 550 Words

The Process of Expanding a Business into a New Region #2 (Essay Sample) Content: The Process of Expanding a Business into a New Region[Authors Name][Universitys Name] The Process of Expanding a Business into a New RegionBusinesses that expand into international territories may be single-unit, single-product and with the aim of targeting single markets. Contrarily, others may be multiunit companies that engage in the manufacturing of numerous products for diversified markets. Either way, undertaking complete internationalization incorporates the commitment of resources and continuous monitoring of business activities before total internationalization and integration. Three elements remain important in determining whether a business expanding its activities into a foreign market will succeed or not. These include the extent of foreign market devolution, the amount of resources committed to expansion activities, and information about the target market (Sadi, 2014). To achieve the best out of an expansion, a firm should scan both its internal and exte rnal environment, assess its financial strengths and weaknesses, and carry out strategic planning before choosing the most suitable mode of entry into the targeted market.A successful and comprehensive scan of external business environments may require the firm to review its current external environment against the targeted foreign environment. Considering the laws that govern business activities, market characteristics, taxation, expected competition, and the existence of cultural diversities would help the firm in knowing how to approach the market (Hamilton Webster, 2012). Most importantly, perform a comparative analysis between the current and the targeted external environments. It is also through this process that expanding firms identify inherent opportunities and risks existing in the target market. On the other hand, reflections on the internal environment may also assist the company to know its true financial position and management abilities. Both the internal and externa l evaluations are important because the results of the inquests assist in making decisions about products, competitive offers, and resource requirements (Brooks Weatherston, 2012).The next two steps involve assessing financial abilities and selecting a target market. While selecting the target market, the firm must ensure that it settles for a location with minimum risks and costs, and maximum expenses. Such a location should have a minimal number of competitors. Even in cases where they are many, there should be a strategy that guarantees clear competitive advantage (Sadi, 2014). The most considered factors include establishment of infrastructure, distribution of target consumers, presence of financial institutions, and political stability. Nonetheless, before deciding on the market, the firm should know the extents of its financial and resource ability. Such information encompasses current scale of economy, production capacity, and unit costs involved (Hamilton Webster, 2012). T he center of production and control plays a major role in determining the mode f entry. Depending on it, the firm can choose whether to start by producing locally and exporting or producing in the target markets (Tielmann, 2010). At the second level, the firm can carry out exports from a local office, establish a distribution office in the target market, or franchise such services to other businesses. The choice on whether to use intermediaries or establish ventures depends on the amount of resources and level of preparedness. Lastly, a business can choose t...