Entering new markets opens the possibility of increasing revenue and/or decreasing the costs of goods sold, thereby increasing profits. It may also allow a company to follow its existing customers abroad, attack competitors in their home markets, guarantee a continued supply of raw materials, acquire technology or ingenuity, diversify geographically or satisfy stockholders’ desire to expand.
Choosing the mode of entry
For many companies, going global may be a matter of survival: there may simply not be enough domestic demand to keep them in business.
Selecting a mode of entry into a foreign market is among the most crucial strategic decisions a company can make. Weighing all factors and choosing the proper method can result in huge competitive advantages or it can cripple the organisation.
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