Companies are expanded within outside markets

Question

Why are companies within outside markets expanded?

Answer 1

A company may choose to enlarge outside its domestic market for any of the four main reasons:

i. To gain access to new consumers – Expanding into outside markets offers potential for enhanced revenues, benefits, and long-term enlargement and becomes an especially attractive choice when a company’s home markets are grown-up.

ii. To achieve lower costs and improve the firm’s competitiveness – Many companies are driven to vend in more than one country because domestic sales quantity is not big enough to completely capture learning curve effects or manufacturing economies of scale and thereby considerably increase the firm’s cost-competitiveness.

iii. To capitalize on its center competencies – A company may be capable to leverage its competencies and capabilities into a position of competitive benefit in outside markets as well as just domestic markets.

iv. To spread its business risk across a broad market base – A company extends business risk by operating in a number of various outside countries rather than depending totally on operations in its domestic market.