International marketing chapter 7

Running head: INTERNATIONAL MARKET 1 International market Mohammed Aloyuni 05/11/2020 CSUSB INTERNATIONAL MARKET 2 Chapter 7 L.O. 1 – The primary reasons companies choose to compete in international markets. There are several reasons why companies choose to compete in international markets or rather focus on expanding their business activities outside its domestic market. Some of these reasons comprise of gaining access to the resources and capabilities that are being located in the foreign markets. Most of the companies consider this because it is cost-effective. This reduces the cost that the company would have incurred, probably through importation or rather an exportation. This also increases the probability of having a low cost of production due to the availability of resources (Thompson et al., 2013). Additionally, gaining access to new customers is another reason as to why the company's focus on competing in international markets. Through international marketing, the company will be able to develop and increase its chances of growing and possibly increasing its returns, given that there are several customers internationally as compared to domestically. Another reason is due to low opportunity costs (Thompson et al., 2013). Most of the companies that are looking to expand internationally focus on gaining access to the untapped market, which they have not exploited already. They prefer purchasing products at a lower cost and selling them at a higher price. L.O. 3: The five major strategic options for entering foreign markets There are five significant ways an organization or, rather, a company decides to participate in a foreign market. The primary alternative is keeping up with the production processes locally and sending out their products to foreign markets. Another subsequent choice INTERNATIONAL MARKET 3 would be for an organization to vend its accrediting to foreign organizations so they could generate and sell their organizations' products and services abroad (Thompson et al., 2013). The third choice is partnering and grouping up together with an already existing business so that they can be able to consult and understand ways of dealing with external impediments in the market. The fourth alternative is for the enterprise to go into a worldwide market to utilize a diversifying methodology, which is a business that might simply open up any place it would be generally effective. Concisely, the fifth choice is buying an already existing business and assuming control over its activities.' Chapter 8 L.O. 1: When and how business diversification can enhance shareholder value Successful diversification of a company requires that a company passes through the three assessments of corporate advantage. To start with, they should check if the business to be entered offers an appealing asset that would help with development, benefit, and income. Furthermore, an organization must ask itself, by broadening will this offer new potential to its current organizations just as to new and future tasks (Thompson et al., 2013). One basic approach to diversifying an association is by acquiring an existing company, rather than propelling new activities without any preparation or from scratch. Finally, an organization should ensure the expense of section into this new remote market is not so high as to meddle with potential benefits. L.O. 3: The merits and risks of unrelated diversification strategies. The companies that utilize this diversification strategy technique regularly often wind up procuring another business to enter another industry. Unaffiliated divergence by a business depicts a wide enthusiasm for a scope of ventures.