REASONS WHY COMPANIES JOIN INTERNATIONAL MARKETS
Business
conditions are changing and companies opt to branch into international markets
in order to adapt to the changing conditions and take advantage of
technological improvements. The various reactive and proactive reasons that are
making companies to go international include:-
Domestic
markets have become saturated and there is increasing pressure for companies to
raise sales and profits. Most companies have high sales and profits targets and
for them to achieve these targets, companies have to move
out of their domestic markets.Domestic
markets tend to grow at a slower pace and for companies to achieve high growth
rates they choose to go into international markets.Technological
changes .Some businesses are conducted online reaching many people globally and
if such companies realize that they have a huge customer base in a certain
country, they branch their business in that country in order to meet the
customer needs.In
some cases companies are forced to move into international markets when their
competitors have done so, so that they can maintain a market share. If the
competitor goes alone into the international markets, the competitor will
definitely plough back some of the earnings from its international operations
to the domestic market, making it difficult for companies which didn’t go into
international market to operate even in domestic markets.
Some
companies also decide to move internationally so as to become a trusted brand. This
help to increase company’s accessibility because most customers look at an
international brand assuming can be more trusted.
Going
international also help to increase innovation. By extending the customer’s
base internationally help to generate new ideas of new products that meet needs
of the customers globally.
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